Do three Americans really have more wealth than half the country?
It’s a claim made by the runner-up for the 2016 Democratic nomination for president, Bernie Sanders.
"The three wealthiest people" own "more wealth than the bottom half of the American people."
What we found is the wealth lead enjoyed by the three billionaires is even larger than what Sanders said.
Before we dig in, an important note about the nation’s wealth gap:
Many Americans make a good income, have some savings and investments, and own a nice home; they also have debt, for a mortgage, credit cards and other bills. The result is, even some people with relatively healthy incomes, as well as many poorer people, have a negative net worth.
To back Sanders’ claim, his campaign pointed us to a November 2017 news article in Forbes. The business magazine reported on a study published that month by the Institute for Policy Studies, which the article described as a left-leaning think tank in Washington, D.C.
The study, which advocates for reducing wealth inequality, also gained news coverage from USA Today and The Guardian. And its authors wrote opinion articles about it for Newsweek and the Los Angeles Times.
The study used data from Forbes’ 2017 ranking of the 400 richest Americans; and data for the rest of the country from the 2016 Federal Reserve Survey of Consumer Finances, which the study says has become widely accepted as the most comprehensive government dataset documenting household wealth. PolitiFact has also relied on this Fed survey in our wealth fact checks.
The first finding the study reported was this:
The three wealthiest people in the United States now own more wealth than the entire bottom half of the American population combined, a total of 160 million people.
Those individuals and their source of wealth are, according to the study:
1. Bill Gates, Microsoft: $89 billion
2. Jeff Bezos, Amazon: $81.5 billion
3. Warren Buffett, Berkshire Hathaway: $78 billion
That’s a total of $248.5 billion. The wealth of the bottom 160 million was $245 billion, the Institute for Policy Studies' Josh Hoxie told us. That’s a gap of $3.5 billion.
Hoxie, a former a aide to Sanders, also pointed out that the wealth of the three billionaires has ballooned to $330 billion, according to Forbes’ latest estimate.
We don’t have an updated estimate for the bottom 160 million American, as the Fed survey is done only once every three years. But Hoxie said it’s nearly impossible that the wealth of Americans at the bottom has grown nearly as much as that of the three billionaires.
For the 160 million people at the bottom of the scale, by the way, the study used the net worth figure reported by the Fed and then subtracted automobiles and other "durable goods" such as electronics, furniture, and household appliances, from that figure.
Subtracting durable goods from net worth "offers us a more accurate depiction of household wealth as these items are not easily sellable and neither appreciate nor hold constant their value," the study says.
More fact checks on wealth inequality
Michael Moore, in 2011: "Just 400 Americans -- 400 -- have more wealth than half of all Americans combined." True.
One Wisconsin Now, in 2013: "The Walton family, which owns Wal-Mart, controls a fortune equal to the wealth of the bottom 42 percent of Americans combined." True.
Starbucks, in 2015: "White people control almost 90 percent of the nation's wealth." True.
The study’s methodology is sound and its conclusion cited by Sanders is accurate, according to Abdur Chowdhury, an emeritus economics professor at Marquette University in Milwaukee, and economics professor Emmanuel Saez, director of the Center for Equitable Growth at the University of California, Berkeley.
As an aside, we’ll note that Saez also said Sanders’ claim is "somewhat meaningless."
"The meaningful thing to say," Saez told us, "is the bottom half of the U.S. families owns essentially no wealth on net, because debts cancel out whatever small assets they may have, on average."
Sanders says: "The three wealthiest people" own "more wealth than the bottom half of the American people."
The wealth of Gates, Bezos and Buffett exceeded that of the 160 million at the bottom of the scale, according to a 2017 study. And more recent estimates indicate the wealth of the three has since grown dramatically, widening the gap even more.
We rate Sanders’ statement True.
YouTube, video of Tammy Baldwin campaign event, July 14, 2018
Email, Bernie Sanders campaign spokesman Warren Gunnels, July 16, 2018
Interview, Institute for Policy studies director of Project on Opportunity and Tax Josh Hoxie, July 18, 2018
Institute for Policy Studies, "Billionaire Bonanza — The Forbes 400 and the Rest of Us," November 2017
Email, Duke University public policy professor Christina M. Gibson-Davis, July 16, 2018
Email, University of California, Berkeley, economics professor and Center for Equitable Growth director Emmanuel Saez, July 17, 2018
Email, Abdur Chowdhury, emeritus economics professor at Marquette University, July 18, 2018
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