[quote=gandalf]
As for the upper four quintiles, wealth distribution has shifted dramatically away from the middle quintiles and towards the upper quintile over the past 30 years. Labor hours per household have increased and household incomes remain stagnant. Explain the relative increase in wealth in the upper quintile? Income, no?
[/quote]
Could the savings rate and today’s generation of I want it and I want it now mentality exacerbated this distribution? Rich people will always be able to buy all the luxury stuff they want and they can afford it easily. However, today, you have a lot of middle class people trying to look rich or just want those luxury things now. Which in essence, reduced the cash they have to invest to make more money. I see more and more luxury things being bought by the middle class. If they would save more, in due time, they would become wealthy, but we all know the American way is to have our things and to have it now. So, yes, income has only risen in lock step with reported inflation, but spending habit does a bigger number on wealth creation. We all know it’s not how much you make, but how much you spend that really matter.
Another example of our spending habit is in the housing market. People of past generation would wait and save for a down payment before buying their first house. But now, you have people going out, buying the biggest house the bank is willing to let them with 0% down, etc. Then they complain they don’t make enough. How about spending less, so that you actually have $ left over to save.
