Les Leopold's report on Alternet that the United States is only 27th in median wealth per adult (h/t @papicek) is getting lots of well-deserved notice. But his article, based on the October 2012 Credit Suisse Global Wealth Databook, missed a big point. (I missed it, too, when the 2012 edition came out.)
As I reported last July, the 2011 Global Wealth Databook estimated that U.S. median wealth per adult was $52,752. But by 2012, the figure had fallen to $38,786, a decline of 26.5%. This is, obviously, a huge number. Moreover, mean wealth per adult had grown by 1.0%, from $259,796 in 2011 (revised upward from $248,395) to $262,351 in 2012. This represents a substantial increase in wealth inequality in the United States.
What could have caused such a sharp decline in median net worth? It's hard to tell. The 2012 Databook does not give information for median debt per adult, only mean debt. Moreover, it does not publish updated information for median wealth for 2011, only for mean wealth. Thus, it is impossible how much, if any, of the change is due to data revisions. On the other hand, if the 2012 measurement was taken relatively early in 2012, it may have reflected the dip in home prices, a major component of middle-class wealth, as reflected in the Case-Shiller national home price index. Moreover, declining median wealth is not an isolated phenomenon, though it is less severe in other countries, as the table below shows.
Country 2011 Median Wealth 2012 Median Wealth Change
Australia $221,704 $193,653 - 12.7%
Belgium $133,572 $119,937 - 10.2%
Canada $89,014 $81,610 - 8.3%
France $90,271 $81,274 - 10.0%
At the same time, there's at least one example of an even sharper swing, Denmark, which Leopold appears to have missed. According to the 2011 Databook, median wealth was $25,692; in the 2012 Databook, it was $87,121, an increase of 239.1%! And this came at a time when mean wealth per adult fell 14.1%.
Do I believe this? Probably not. So it seems possible that the U.S. decline might be measurement error. Even if that's the case, the main point both I and Leopold made remains true: the wealth of the U.S. middle class is surpassed in a substantial number of countries around the world.
I'll be updating this post as I get more information.
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This article originally appeared at Middle Class Political Economist. Copyright 2014.