It’s no secret that America’s rich are getting richer. But there’s another, more obscure trend driving income inequality in the U.S.: The aging population.
According to a new report by the Congressional Budget Office (CBO), Americans ages 65 and older were the only group that grew their median wealth between 1989 and 2013. During that period, the median family wealth for households headed by someone of that age group increased 67 percent, to $211,000.
Meanwhile, the median wealth for people between the ages of 50 and 64 declined 15 percent, while those between the ages of 35 and 49 saw their median wealth drop 40 percent to $58,000. Those under the age of 35 saw their median wealth drop around 23 percent, to a mere $10,000.
Americans have always accumulated more assets as they age. But the process has accelerated in recent years, as student debt and weak job markets have hurt the younger generations. At the same time, older generations have benefited from recovering housing prices and improving stock markets.
Pew Research Center came to a similar conclusion in 2011, when its study of Census Bureau data noted the wealth gap between generations had more than doubled since 2005.
The numbers “call into question one of the most basic tenets of the American Dream,” said Paul Taylor, a co-author of the Pew Center analysis, at the time — “The idea that each generation does better than the one that came before.”
Also in line with the findings of prior studies, the CBO report concluded there’s a widening income gap between the top earners and the rest of the population.
Wealth for the top 10 percent grew 54 percent between 1989 and 2013. That compares with a 4 percent increase for those in the middle and a 6 percent decline for the bottom 25 percent.