According to a new report from the nonpartisan Congressional Budget Office, the Great Recession had a particularly potent effect on increasing wealth inequality in the United States.
While wealth did grow for the bottom half of the country's wealth distribution from 1989-2007, it grew slower for the bottom half than it did the upper half. After the recession, the bottom half experienced a disproportionately large decline in wealth.
For families in the 26th-50th percentile of the wealth distribution, the wealth decline caused by the recession offset any gains seen from 1989-2007.
The report reads, "For those families, increases in home equity and in financial and other assets contributed to rising wealth between 1989-2007, and conversely, losses in home equity and in financial and other assets after 2007 contributed to the decline in average wealth over the period."
For families in the 51st-90th percentiles of wealth distribution, the value of their home equity declined by 31 percent from 2007-13, while their financial assets declined by 8 percent.
Those losses were larger for families in the 26th-50th percentiles. Home equity declined by 44 percent, while financial assets declined by 34 percent.
Still, the recession did decrease wealth for all income groups in a way that no one had recovered from by 2013, according to the most recent available data.
While the share of families in debt only grew from 8 percent in 2007 to 12 percent in 2013, average indebtedness grew by 60 percent, from $20,000 to $32,000.
Some important context from the report: "Some of the growth in family wealth, particularly before the recession, can be attributed to the aging of the population and to rising educational attainment among all age groups: Older or more educated people tend to have more wealth than their younger or less educated counterparts."
The typical family in 2013 headed by someone aged 65 or older had more wealth than the equivalent family in 1989. But families headed by someone younger than 65 did not see the same growth in wealth. Put simply, someone past retirement age today probably has more wealth than someone who was at that point in 1989. But those who are younger than retirement age probably have about the same wealth or less.
Median wealth grew from 1989-2013 for families headed by someone with at least a bachelor's degree, but it declined for all other families.
It's also important to note that the data presented here are a snapshot of the families in a given wealth percentile at the given time. It does not track families as they rise or fall between percentiles.
It's reasonable to think that, given the increase in wealth for families headed by someone at retirement age, many families moved into higher wealth percentiles in the past decade despite the Great Recession.
For example, a family may have started in the bottom 25 percent of the wealth distrubtion in 1989, moved into the 26th-50th percentiles in the 1990s, moved into the top half in the 2000s and then seen their wealth decline because of the Great Recession. But such a family would still be better off in 2013 then they were in 1989.
Jason Russell is a commentary writer for the Washington Examiner.