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“Older Americans are 47 times richer than young” …

…is the title of an article in CNNMoney.

CNNMoney is “A Service of CNN, Fortune & Money.”

I have been thinking a lot about this article on CNNMoney since it appeared online yesterday. Mostly, because news people are not especially good at analysis (they don’t have the time) and ESPECIALLY because one of the Myers-Briggs Judging types, who tend to RUN things, might not TAKE the time to analyze the data before “jumping to a conclusion” and “robbing” the Baby Boomers (further). :-)

The article states (and I quote):

“According to analysis by the Pew Research Center released Monday, younger Americans have been left behind as the oldest generation has seen wealth surge since the mid-1980s.

While it’s typical for older generations to hold more wealth than younger ones who’ve had less time to save, the gap between the two age groups has widened rapidly.

In 1984, households headed by people age 65 and older were worth just 10 times the median net worth of households headed by people 35 and younger.

But now that gap has widened to 47-to-one, marking the largest wealth gap ever recorded between the two age groups.”

Even CNNMoney :-) thought of the obvious thing – that people tend to accumulate wealth and possessions during their lives and that younger people will have LESS. What puzzled me is that the income of the bottom 99% of income earners (hmmm… where have we heard about THEM lately? :-) ) has remained VIRTUALLY STAGNANT (up just 8%) since 1980! Meanwhile, the uppermost 1% (and 0.1%, and 0.01%) of income earners have done very well for themselves, thank you! :-)

For the heck of it, let’s assume that BOTH the Pew Research Center and the Time Magazine article in 2007 are accurate.

How do we reconcile the two observations?

Maybe, the best way is to start by restating the title of THIS blog entry, which is also the title of the CNNMoney article, and to think about the time period involved (early 1980s onward):

“Younger Americans are 47 times POORER than OLDER Americans!” :-)

CNNMoney says that in 1984, households that were headed by people aged 65 and older were worth just 10 times the median net worth of households headed by people 35 and younger. Well, let’s assume Pew Research is right. It doesn’t matter much – all of those people are dead now. :-) Baby boomers may have inherited their “wealth.” The article goes on to state that households headed by adults 35 and younger (i.e., BORN in 1974 or later) had a median net worth of $3,662 in 2009, which marks a 68% decline in wealth compared to the same age group 25 years earlier.

In 1980, things were starting to get BAD for the financial “upward mobility” of 99% of Americans (see above). In 1984 (nice year, and book),  the YOUNGER Americans that Pew is discussing were 10 years old or younger! These young folks were IN GRADE SCHOOL when things started to “go south” for 99% of Americans! At least their parents, the Baby Boomers, had a chance to earn a little money (and maybe buy a home – almost always a good investment) BEFORE the “ladder rungs” of upward mobility were REMOVED by the uppermost 1% of income earners. But as we shall see below, we are not even talking about Baby Boomers in the “wealthy” group of the Pew study….

CNNMoney goes on to state that over the same time frame (1984 to 2009) households headed by adults ages 65 or older (i.e., BORN in 1944 or EARLIER) have had their wealth (significantly, NET WORTH, NOT INCOME) rise 42% to a median of $170,494.

OK, even I am not 65 (or older)! :-)

So, we are talking about a group of Americans who got to take advantage of the “boom” times of the 1950s and to invest in homes, property, and possessions BEFORE the income stagnation for the lower 99% of income earners set in, in 1980. These folks were 36 or older in 1980 and 40 or older in 1984! Their income has been virtually stagnant since 1980, if they are in the “bottom 99%” (unless the Pew folks ALSO sampled folks in the top 1% of income earners, which would REALLY SKEW the net worth of the older folks)! :-)

Significantly, THERE ARE NO Baby Boomers in Pew Research’s “older group!” The first Baby Boomer, Kathleen Casey-Kirschling (born in Philadelphia on Jan. 1, 1946, at 12:00:01 AM) signed up for Social Security by taking early retirement at age 62 in the middle of October 2007! She would not have been 65 by 2009, so no Boomers were in Pew Research’s study! (Note added November 09, 2011: WHY did Pew Research skip over the Baby Boomers, considering groups of Americans both BEFORE and AFTER? I’ll let you answer that one for yourselves.)

So what do we have left?

The Pew Research study first considers an irrelevant (for the purpose of comparison) group of (now dead) Americans. :-) Sorry… I loved some of them, too!

The… let’s call them “comparatively wealthy” :-) Americans in the study are pre-Baby Boomers, many of whom came back from World War II to boom times in the U.S. with their “GI Bill” and great opportunity for prosperity. They bought homes, which appreciated greatly BEFORE upper mobility in America was virtually HALTED for (the lower) 99% of Americans in 1980 (coincidentally, :-) the Ronald Reagan [look, I know that he is a saint to some people in California, but facts are facts] administration).

Meanwhile almost ALL of the Baby Boomers and ALL of the younger folks have reached adulthood during a time when OPPORTUNITY and upward mobility for the bottom 99% of income earners in America have virtually EVAPORATED, as the result of income stagnation.

Yes, I understand the Pew Research Center results now. See what numbers can do if you don’t think about them long enough. :-)

If any politician seeks to use the Pew results to FURTHER PENALIZE Baby Boomers or the generations of Americans after them, who have had virtually no upward mobility their entire adult lives, I think that we should reward such a politician by voting him/her out of office or not voting him/her in, in the first place.

“Occupy” the voting booths!

-Bill at

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