The paper focuses mainly on how the middle class fared in terms of wealth over the years 2007 to 2010 during one of the sharpest declines in stock and real estate prices. The debt of the middle class exploded from 1983 to 2007, already creating a very fragile middle class in the U.S. The main interest here is whether their position deteriorated even more over the “Great Recession.” The paper also investigates trends in wealth inequality from 2007 to 2010, changes in the racial wealth gap and wealth differences by age and marital status, and trends in homeownership rates, stock ownership, retirement accounts, and mortgage debt. 

The period covered spans the years from 1983 to 2010. The data source is the Survey of Consumer Finances for years 1983, 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. By 2010, we will see what the fall-out has been from the current financial crisis and associated recession and, in particular, which groups have been impacted the most.

There are seven specific issues addressed in the paper. (1) Has the inequality of household wealth risen over time, particularly during the years from 2007 to 2010? Preliminary evidence suggests a spike in net worth inequality from 2007 to 2010. (2) Has median household wealth continued to advance over time or has it fallen, particularly from 2007 to 2010? Preliminary results suggest a 30 percent or so drop in median wealth over these three years. (3) Has the debt of the middle class increased over time, especially during the last three years of the current decade? (4) What are the time trends in home ownership and home equity and what has happened, in particular, from 2007 to 2010? (5) Have the rate of stock ownership and the value of retirement accounts risen over time, especially at the end of the current decade? Preliminary indications are of a sharp drop in pension wealth from 2007 to 2010. (6) How have time trends in average wealth, household debt, the home ownership rate, home equity, stock ownership, and the value of retirement accounts varied by age group? (7) What are the time trends in average wealth, household debt, the home ownership rate, home equity, stock ownership, and the value of retirement accounts for different racial groups, family types, and educational levels?