Young and Old: The Latest Income Gap

      As if we don't have enough stories about further economic stratification, it now is emerging that the wealth gap between the young and old is " stretched to the widest on record, worsened by a prolonged economic downturn that has wiped out job opportunities for young adults and saddled them with housing and college debt. "

    

    "The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater than a household headed by someone under 35, according to an analysis of census data released Monday."

    "While people typically accumulate assets as they age, this wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation."

    

    http://www.cnbc.com/id/45188794

     This bodes very bad for the state of the economy. By definition older Americans-or of any economy-are expected to have more than younger. But the idea that it has changed this much since 2005 shows just how disconcerting the future is for our economy right now.

    "The analysis reflects the impact of the economic downturn, which has hit young adults particularly hard. More are pursuing college or advanced degrees, taking on debt as they wait for the job market to recover. Others are struggling to pay mortgage costs on homes now worth less than when they were bought in the housing boom."

     "The median net worth of households headed by someone 65 or older was $170,494. That is 42 percent more than in 1984, when the Census Bureau first began measuring wealth broken down by age. The median net worth for the younger-age households was $3,662, down by 68 percent from a quarter-century ago, according to the analysis by the Pew Research Center."

    "The 47-to-1 wealth gap between old and young is believed by demographers to be the highest ever, even predating government records"

     I quote in detail because the numbers are so stark, making very clear that the American Dream that the older generation could count on is over. For now, at least, this is so. 

     "In all, 37 percent of younger-age households have a net worth of zero or less, nearly double the share in 1984. But among households headed by a person 65 or older, the percentage in that category has been largely unchanged at 8 percent."