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U.S. is minting most of the world's millionaires
NEW YORK (Kim Peterson/MoneyWatch) -- America is sprouting millionaires faster than any other country, a new study shows. But at the same time, the middle and lower classes are falling farther behind.
The U.S. had the highest number of millionaire households in the world last year, with 7.1 million, according to a report out Monday from the Boston Consulting Group. The country, propelled by the stock market's double-digit returns, also minted the most new millionaires, at 1.1 million.
Coming in a distant second is China, which surpassed Japan to report 2.4 million millionaire households. While Japan was third in millionaire count, its number dropped to 1.2 million from 1.5 million as the yen fell 15 percent against the dollar.
Overall, the total number of the world's millionaire households rose to 16.3 million last year from 13.7 million in 2012, the report says. That's about 1.1 percent of all households globally.
The wealthy in the U.S. are getting richer -- and expanding their numbers faster than most. But here's the problem: The ranks of the poor seem to be expanding as well.
It's a little early to get concrete numbers for 2013 for comparison, but the signs of growing lower classes are there. A national survey from late 2012 shows that more Americans are identifying as part of the lower-middle or lower classes. A third of all adults said they were in those classes, an increase from 25 percent in 2008, according to the Pew Research Center. Researchers said they were struck by the vast number of young adults who say they had moved into the lower classes.
It's not much better for the American middle class, either. After a long period of being the most affluent middle class in the world, the U.S. middle class has been surpassed by Canada's, The New York Times reported this year. And the poor in many countries in Europe now earn more than poor Americans.
The median annual household income rose to $52,100 last year from 2011, according to a study by two former Census Bureau officials. But it was still $3,400 lower than it was in December 2007, when the recession officially began, The Times reports. The lower-income classes had the steepest drops in income.
If you look at the big picture, the U.S. is doing well. It continues to be the world's richest large country if you consider things like per capita gross domestic product, The Times reports. But those numbers don't show the whole story. Much of the income and wealth gains in the U.S. are going to the richest Americans, while the lower classes continue to slide.
It's a sensitive subject in America, which may be one reason why economist Thomas Piketty's new book on income inequality has become such a hot subject lately. He told CBS MoneyWatch that the gap between rich and poor has reached "spectacular" heights in the U.S.
Indeed, a paper presented earlier this year at the National Bureau of Economic Research said that the U.S. has become just as unequal as England during the "Downton Abbey" era a hundred years ago, MarketWatch reports. America's richest today get a bigger chunk of the wealth than the likes of Lady Mary and the Earl of Grantham did in 1920s England. And our poor get less of the wealth than Carson the butler.
Former U.S. Treasury secretary Lawrence Summers took on the issue earlier this year, writing in The Financial Times that the share of income going to the top 1 percent of earners has soared while real wages remain stagnant. Summers suggested the U.S. should close tax loopholes that are exclusively for the wealthy and look at more ways to raise the incomes of the poor and middle classes.
"It is ironic that those who profess the most enthusiasm for market forces are least enthusiastic about curbing tax benefits for the wealthy," he wrote. "Sooner or later inequality will have to be addressed."
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