American wealth is accumulating with the older generations and each younger generation is worse off, by Phillip Longman, Washington Monthly
Adam Rifkin stashed this in Rich people get richer.
Long but great article about transfer of wealth to the older generations:
America is experiencing unprecedented downward mobility.
We miss that those Americans who were middle-aged in 1979 have, as a whole, seen their standard of living rise sharply compared both to their own previous experience and to that of their counterparts in the previous generation. So, for example, when people who were forty something in the late 1970s became fiftysomething in the late 1980s, their income and net wealth were not only higher than they had been ten years before, they were also far better off than fiftysomethings had been in the 1970s. And as retired seventysomethings today, not only have most seen their personal income net worth hold even or even continue to rise, they are also way better off financially than were seventysomethings in the 1990s. For this birth cohort of Americans, dramatic upward mobility, not stagnation, has been the norm.
The other big trend is what has been happening to each subsequent younger cohort of Americans, which is basically the opposite. Start, for example, with the twentysomethings of 1979. They had a lower real income in 1979 than twentysomethings did in 1969. And as fiftysomethings now, they not only make less money than they did when they were fortysomething, they are also far worse off as a whole than were the fiftysomethings of 2005. This generalization applies to white members of this cohort and even more so to those who are African American or Hispanic.
Today’s fiftysomethings may be part of the first generation in American history to experience this kind of lifetime downward mobility, in which at every stage of adult life, they have had less income and less net wealth than did people who were their age ten years before. Yet these mid-wave Baby Boomers shouldn’t feel too sorry for themselves. That’s because, as we shall see, they were far better off as twentysomethings than were subsequent cohorts of Generation X twentysomethings, and especially better off than today’s Millennials.
These vastly different economic trajectories experienced by today’s living generations are basically unprecedented. Throughout most of our history, inequality between generations was large and usually increasing, to be sure, but for the happy reason that most members of each new generation far surpassed their parents’ material standard of living. Today, inequality between generations is increasing for the opposite reason. Though much more productive and generally better educated, most of today’s workers are falling farther and farther behind their parents’ generation in most measures of economic well-being.