Debt Ownership Society

Labor, Politics, The Economy

A recent compendium and analysis of U.S. labor market statistics, the State of Working America, has some interesting data that is relevant to the passing of the new bankruptcy law. Bush is eager to promote the bill as good for poor people, but the statistics show a society divided between those who own assets and those who own debt:

The rich are asset heavy, especially with respect to financial assets (those which yield income), and debt poor, while the opposite is true for those with the lowest incomes. In 2001, the richest 1 percent of households owned 44.8 percent of all common stock (excluding stock owned through pensions); the poorest 80 percent owned 5.8 percent. This suggests that the poorest 10 or 20 percent own a minuscule share of stock. Even including stocks held through various pension arrangements, in 2001, those households with yearly incomes less than $15,000 held 1.1 percent of all stocks, while those with annual incomes equal to or greater than $250,000 owned 40.6 percent of all stock. Debt, on the other hand, bears down most heavily on the poor. In 2001,** debt service payments made up 40 percent or more of yearly household income for 27 percent of those households with less than $20,000 in income**. For households with yearly income between $90,000 and 100,000, the percentage was 2 percent. Of the former group, 13 percent were sixty days or more late paying their bills; for the latter group the rate was 1.3 percent.

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