Bernie Sanders says Walmart heirs own more wealth than bottom 40 percent of Americans

FYI: Today verified a tweet by Sen. Sanders which said, “Today the Walton family of Walmart own more wealth than the bottom 40 percent of America.” Sanders has also made this statement as a witness before the Senate Judiciary Committee’s Subcommittee on the Constitution, Civil Rights and Human Rights on July 24th – RELEASE, VIDEO.

Vermont Sen. Bernie Sanders, an independent who caucuses with Democrats, tweeted a startling statistic to his followers on July 22, 2012: “Today the Walton family of Walmart own more wealth than the bottom 40 percent of America.”

Sanders speaks and writes frequently about wealth distribution in the U.S., a hot-button issue among liberals and a rallying cry of the Occupy Wall Street Movement.

The Waltons, of course, are members of the proverbial 1 percent. But are they really sitting on that much wealth? We decided to check it out.

First, what is wealth?

In economics, wealth is commonly measured in terms of net worth, and it’s defined as the value of assets minus liabilities. For someone in the middle class, that could encompass the value of their 401(k) or other retirement accounts, bank savings and personal assets such as jewelry or cars, minus what they owe on a home mortgage, credit cards and a car note.

It does not include income — what people earn in wages. For that reason, someone who earns a good salary but has little savings and owes a lot of money on their house would have a negative net worth.

In fact, because so many Americans invest in real estate to buy a home, middle-class wealth has been one of the biggest casualties of the housing-driven recession.

From 2007 to 2010, typical families lost 39 percent of their wealth, according to the Federal Reserve’s Survey of Consumer Finances, done every three years. In 2007, the median family net worth was $126,400. In 2010, it was $77,300, according to the survey.

Where the Waltons fit in

Six members of the Walton family appear on the Forbes 400 list of the wealthiest Americans. Christy Walton, widow of the late John Walton, leads the clan at No. 6 with a net worth of $25.3 billion as of March 2012. She is also the richest woman in the world for the seventh year in a row, according to Forbes. Here are the other five:

No. 9: Jim Walton, $23.7 billion
No. 10: Alice Walton, $23.3 billion
No. 11: S. Robson Walton, oldest son of Sam Walton, $23.1 billion
No. 103: Ann Walton Kroenke, $3.9 billion
No. 139: Nancy Walton Laurie, $3.4 billion

That’s a grand total of $102.7 billion for the whole family.

Sylvia Allegretto, a labor economist at the Center on Wage and Employment Dynamics at the University of California-Berkeley, compared the Waltons’ cumulative net worth with that of the overall population, as cited in the Survey of Consumer Finances. (She used the Waltons’ wealth from 2010, which was valued at $89.5 billion.)

Allegretto found that in 2007, the wealth held by the six Waltons was equal to that of the bottom 30.5 percent of families in the U.S. In 2010, the Waltons’ share equaled the entire bottom 41.5 percent of families.

That 41.5 percent represents nearly 49 million families, notes Josh Bivens at the left-leaning Economic Policy Institute. While median family wealth fell by 38.8 percent, Bivens wrote, the wealth of the Walton family members rose from $73.3 billion in 2007 to $89.5 billion in 2010, or about 22 percent growth.

Other analysis

At Forbes, source of the richest 400 list, Tim Worstall wrote a response to the Waltons wealth claim. He did not dispute the accuracy of the statistic but offered some broader perspective.

“Wealth is always more unequally distributed than income,” Worstall wrote. “By the way, it isn’t even true that all of those households with zero or negative wealth are what we would call poor, either. It’s entirely possible to have no net assets while having a good income, even a high income. All you need to have is debts higher than your assets: something that will almost certainly be true of anyone with student debt and fresh out of college, for example.”

He added: “If you’ve no debts and have $10 in your pocket you have more wealth than 25 percent of Americans.”

Bivens, for good measure, calculated the comparison of the Waltons vs. all Americans after removing households with a negative net worth — those that drag down the overall average and make the Waltons’ advantage look greater. He found that the Walmart heirs’ $89.5 billion “is still equal to the combined net worth of the bottom 33.2 million families (about 28.2 percent of the total).”

Our ruling

Sanders tweeted that “the Walton family of Walmart own more wealth than the bottom 40 percent of America.”

The statistic correctly compares the combined net worth of the bottom 41.5 percent of American families with the six Walton family members. We think the additional points — that many people with a negative net worth are not necessarily poor and that percentages about wealth distribution can be deceiving — are important and interesting. Nevertheless, Sanders’ claim is solid. We rate it True

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  • As usual, Sanders is spouting statistics that are marginally relevant to the issue which is that the buying power of the minimum wage has declined since about 1965.

    It would need to be about $14/hr to be equal to its former buying power.
    All other blue collar wages are pegged to the minimum wage.

    The lack of proper compensation for work has led to poverty, joblessness and disfunctional behavior that are being “treated” with government programs.

    The answer is not more government programs that add government workers but destroy twice as many jobs in the private sector.

    The answer is to provide incentives for employers to hire Vermonters, not to bring in foreign students and South Americans and give them preferential job treatment.

  • Galen Crandall

    Typical Sanders program, incite class-warfare ala his Progressive(marxist) inclination.
    It’s too bad he won’t abide by his oath of office and urge his peers to do their Constitutional duties. The Dem/Progressive/Liberal controlled senate has refused to pass a budget for over 1000 days.
    Galen Crandall
    Perkinsville, Vt.

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