No, Poor People Don’t Inherit a Lot of Money

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


I had a doctor’s appointment this afternoon, so I missed the twilight session of the Benghazi hearing. When I got home, it was 8 pm on the East Coast….and the hearing was still going on. Yikes. I assume I didn’t miss anything, did I?

Anyway, while I was in the waiting room I was browsing The Corner and came across the graphic on the right. It struck me as peculiar. The bottom income quintile in America gets 43 percent of its wealth from inheritance? Even granting that these households don’t have much wealth to begin with, that really didn’t seem right.

There was a link to a piece by Kevin Williamson that turned out to be two years old—which is something like two decades in blog years. Still, I was curious, and I had nothing else to do while I waited. So I clicked the link. Here’s what Williamson says:

For the top income quintile, gifts and inheritances amount to 13 percent of household wealth, according to research published by the Bureau of Labor Statistics….Meanwhile, inherited money makes up 43 percent of the wealth of the lowest income group and 31 percent for the second-lowest. In case our would-be class warriors are having trouble running the numbers here, that means that inherited money on net reduces wealth inequality in the United States.

This is pretty misleading. I tracked down the BLS report, and it turns out this 43 percent figure is only for those households that inherit anything in the first place. But as you might expect, a mere 17 percent of low-income households report any inheritance at all. If you average this wealth across all low-income households, inheritance accounts for about 7.4 percent of the wealth of the entire group. If you do the same thing for the top earners, inheritance accounts for about 4.9 percent of the wealth of the entire group.

So….7.4 percent vs. 4.9 percent. When you compare entire groups, which is the right way to do this, there’s not very much difference between the two. And in a practical sense, the difference is even more negligible. If you run out the numbers, the wealth of the bottom group increased from $56,000 to $63,000 per household. Big whoop. Conversely, the wealth of the top group increased from $7.2 million to $7.6 million. That’s a nice chunk of change. In a technical sense, the low-income group got a bigger percentage increase, and income inequality has been reduced. But in any normal human sense, $7,000 is such a tiny amount that it doesn’t matter. In a nutshell, rich people inherit a lot of money and poor people don’t.

I’m not really sure what the point of being misleading about this is, since Williamson’s main themes in the linked piece are (a) rich people don’t get most of their money from inheritance, and (b) rich people are mostly married and work a lot of hours. Those things are both true, and there’s no real reason to toss in the other stuff. All it does is provide grist for other people to make misleading graphics later on.

Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate