One in Four Households Have No Net Worth
A study conducted by the Economic Policy Institute has found that the wealth destruction caused by the Great Recession has led to nearly 25 percent of American households now with a net worth equal to or less than zero.
Net worth, the value of one’s assets minus one’s debts, is an important calculation in determining wealth and financial stability. And unfortunately for millions of Americans, it is a calculation that does not favor them as this number increased from 18.6 percent in 2007 to 24.8 percent in 2009.
By the end of 2009 the bottom 20 percent of the nation as a whole had a negative net worth, completely erasing gains made in the 1990s. This statistic is the most compelling of all to prove that the policies of “free” trade have been a complete failure for the vast majority of Americans.
Our erroneous trade policy has only plunged the middle and lower classes into poverty, while helping the wealthy become richer, exacerbating income inequality in the U.S. In 2009, the wealthiest 20 percent of households controlled 87.2 percent of all wealth, up from 85.0 percent in 2007. The top 1 percent controlled 35.6 percent of all wealth, up from 34.6 percent in 2007.
With an economy predicated upon consumer spending, which now accounts for more than two-thirds of GDP growth, it is apparent that more and more households have been forced to turn to debt to survive. This is a direct result of our misplaced faith in the housing, financial and service sectors, while leaving industry to wither on the vine.
In order to provide good jobs for hard-working families, and restore upward mobility to America, we must end our disastrous trade policies that have made it impossible to produce goods domestically. While the president focuses on doubling our exports, it is our vast amount of imports costing us American jobs. If the U.S. government would embrace trade policy that made it possible for U.S. companies to produce goods here for consumption by U.S. workers, we could begin to undo the damage wrought upon our economy.
However, embracing the status quo, will only lead to more of the same. More off-shoring, more job losses and more families that lose wealth and fall into poverty. Without action, there will be no change, whether it is something as simple and easy as sending a letter to your local paper, calling up one of your elected officials to voice your opinion, or even sharing these articles with your friends and family, doing anything is far more valuable than doing nothing.