America’s middle class became poorer and more economically insecure during the Great Recession, as household wealth concentrated in the hands of the rich, according to new Federal Reserve data about the recession and its aftermath. The latest Survey of Consumer Finance data covering the years 2007 to 2010 are yet another reminder that addressing the economic insecurity of the nation’s middle class must be the top priority for policymakers.
In the following chart we depict the rising financial insecurity of the American household in two ways: the share of nonretiree households 25 years old and older with no or negative wealth, and the share of these households with an emergency fund (commonly defined as nonretirement financial assets, equal to more than three months of their income).
The percentage of families with no or negative wealth rose to 32.5 percent in 2010—up from 19.2 percent in 2007. Likewise, the share of these households without sufficient emergency funds dropped to 32.4 percent in 2010, down from 37.5 percent in 2007.
MORE: Middle-Class Economic Security Declines as Wealth Concentration Increases | American Progress.