In the US, the wealth and income inequality largely remained static since the second world war ending 1945, until the financial crisis of 2008. While the income inequality did not rise much, there was a steep ascent in the wealth inequality after this financial crisis. This can be attributed to several factors as studied by researchers from the University of Bonn in Germany. To understand this, they first undertook a data warehousing operation collating all information in the HSCF (Historical Survey of Consumer Finances). This enabled them to understand that one of the major reasons for the then disparity was nature of holdings the then middle-class and the top ten percent had prior to the crisis. The former mostly had housing assets, while the latter owned stocks. When the housing bubble collapsed in 2008, the middle classes lost their wealth but the top ten percent saw an increase in their asset value thanks to the almost immediate stock market recovery. There is also a racial aspect to this. A lot of these losses were suffered by the Black community whose income levels remain half that of their white counterparts, similar to how it was back in the pre-civil rights era of the 1950s.

Source:https://hbr.org/2018/09/research-how-the-financial-crisis-drastically-increased-wealth-inequality-in-the-u-s?utm_medium=social&utm_source=twitter&utm_campaign=hbr

Uploaded Date:26 September 2018