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Fed Chief Rips Widening Gap Between Rich, Poor Americans

  • VOA News

Federal Reserve Chairman Janet Yellen speaks during a conference on economic opportunity at the Federal Reserve Bank in Boston, Oct. 17, 2014.

Federal Reserve Chairman Janet Yellen speaks during a conference on economic opportunity at the Federal Reserve Bank in Boston, Oct. 17, 2014.

The head of the U.S. Federal Reserve voiced alarm Friday over rising economic inequality in the United States, questioning whether the growing disparity between rich and poor is compatible with the American ideal of opportunity for all.

Janet Yellen, in an address on economic opportunity, said trends in recent decades show the U.S. income and opportunity gap is approaching its widest point in nearly a century.

She cited data showing the average income of the top 5 percent of American households rising 38 percent between 1989 and 2013. She said household income for the remaining 95 percent grew less than 10 percent during the same period.

She also described the widening gap in overall wealth as even more stark. She said the average net worth of the bottom 50 percent of American families -- more than 60 million households -- was $11,000 in 2013. Adjusting for inflation, she said that figure is 50 percent lower than in 1989.

She contrasted those figures with data showing the real net worth of families in the top 5 percent jumping from $3.6 million in 1989 to $6.8 million last year.

Yellen did not directly address the U.S. economic outlook or monetary policy in her speech to Federal Reserve officials in Boston.

She instead focused on four areas she described as "building blocks for opportunity." She identified those components as early childhood education, affordable higher education, business ownership and inheritances.

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