At this point, it is important to remember that these people did not disappear from the ranks of the poor because they became worse off. The data include those with negative wealth, so if they became worse off they would still be in the database. Therefore, the decline in the number of those with low wealth must be because they became wealthier, rising up into the ranks of those with higher wealth.
In short, every wealth class became better off. As the Fed study puts it, "Over the period from 1989 to 2001, the SCF data show that the distribution of wealth shifted up broadly in real terms -- another way of saying that in absolute terms there were fewer poor families and more families who were wealthier."
The percentage of all families with a net worth greater than $500,000 has been especially rapid, rising from 10.1 percent of all families in 1989 to 14.8 percent in 2001. The Fed attributes much of this growth to the aging of the Baby Boom generation, which moved into its peak earning years over this period. And with retirement facing them in the near future, members of this generation are also saving and investing more heavily, a task made easier by the fact
that for many their children are now out of school and on their own.
Looking at all families headed by someone ages 44 to 55, only 11.8 percent have less than $5,000 saved, while 20.3 percent have at least $500,000. Almost 70 percent of Baby Boomers have of net worth of at least $50,000.
The Fed study also looked particularly at African Americans and found that they, too, shared in the general upward trend of wealth and asset ownership. In fact, their wealth grew faster than that of whites between 1989 and 2001, with the ratio of white wealth to black wealth falling from 18.5 to 6.4. Forty percent of African Americans now have middle class levels of wealth -- between $25,000 and $250,000 -- very close to the 43 percent of whites with such wealth.
It seems that a rising tide really does lift all boats.