Federal Reserve Board survey data on wealth certainly imply that it is getting harder and harder to succeed in our economy.
Steve Roth has created some great charts using this data, which is based on surveys done every three years beginning in 1989. The chart below looks at the median real (or inflation adjusted) household net worth by the age of the head of household. Each line shows the real net worth of a household headed by the relevant age group. In other words it allows us to compare the real net worth of a representative household headed by a 35-44 year old in 1989 with the real net worth of a similarly representative household headed by a person of the same age range in 2013. We are not looking at the fortunes of the same household as its head ages, but rather at households at different periods to see how age cohorts have fared over time.
The chart shows that households, with the exception of those headed by people 65 years and older, were worse off in 2013 than they were in 1989. For example, the representative household headed by someone 35-44 had far less wealth in 2013 than the representative household headed by someone from the same age range had in 1989.
The following chart makes it easier to see such trends by focusing on changes over the period 1989 to 2013.
When a line falls below 100 it means that the representative household in the specific age grouping was poorer that year than it was in 1989. It is striking that many household groupings grew poorer over the decade of the 2000s, years before the 2008 crisis, when our economy was supposed to be the envy of the world.
The growth in inequality might be one reason this immiseration has been missed. While the representative household defined by the age of its head might be growing poorer over time, a small number of households in each group might be enjoying ever greater riches, thus possibly confusing people about the nature majority experience.
The next chart looks at changes over time in the mean: median ratio for the different household groupings. The greater the ratio, the more inequality within the household grouping. Inequality within all household groupings, except those headed by someone 75 years or more, has grown over time. The real standout is the household grouping headed by those 35-44 years of age; while the income of the typical household has been falling (see the chart above), some of its members have really been hitting it rich (as illustrated in the chart below).
In sum, while wealth does grow with age, trends strongly suggest that the American experience is moving in reverse. Households with similar aged heads are growing poorer not richer over time.