Tag Archives: Wealth

85 People Have As Much Wealth as 3.5 Billion People

Just think about that headline for a second… 85 people have as much wealth as 3.5 billion people. Eighty-five vs. Three and a half billion. Maybe looking at the words isn’t enough, let’s look at it in numbers. 85 vs. 3,500,000,000. If I were graphically inclined, I’d make a quick “infographic” showing 85 people on one side and 3,500,000,00 on the other side. That’s an astronomical difference.

The article in The Guardian where I first read it had a good analogy:

The world’s wealthiest people aren’t known for travelling by bus, but if they fancied a change of scene then the richest 85 people on the globe could squeeze onto a single double-decker.

This isn’t the first time I’ve written about wealth inequality and it probably won’t be the last. There are two posts that come immediately to mind. The first is the one from a couple of years ago where I shared a graphic that came from a paper by two researchers studying the wealth distribution in the US. Most notably from the graphic was that the perception of American was way off from reality. Americans thought that the top 20% had approximately 60% of the wealth and they wanted the distribution to be that the top 20% was closer to 30%. In actuality, the top 20% (at the time) had close to 90% of all wealth in the US.

The second post was just under a year ago and it took a deeper look at the graphic that I shared in the first post. Someone animated the chart, that is to say, they made a video of the information to make it more accessible to people and it was shared heartily across the internet — it’s currently over 14,000,000 views.

So what does all of that have to do with today’s information? Well, as is pointed out in the article in The Guardian, the World Economic Forum is starting in a few days, so talking about these kinds of issues are important. That is, reminding folks that the people in attendance at Davos will make up well over half of the wealth in the entire world

The image I’ve used for this post comes from that same article and it’s how I’d like to finish today’s post. Take a look at the United States. In 1980, the top 1%’s share of the national income was 10%. In 20 years, that’s doubled to 20% (of the national income). There’s been movement in other countries, but none as great as the US. I’m not picking on the US, but it’s quite clear that if you’re interested in being part of the wealthiest sect of the world, the US is a good place to do just that.

My point in sharing this image is to forward the conversation on this matter. People have very different opinions on how money should be spent, especially when that money is tax dollars. I’m not necessarily trying to trumpet one opinion more than the other, but I think it’s important to highlight this massive disparity and question whether this is how we want to live in the world.

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US Congress: 48% Millionaires, US Population: 2.85% Millionaires

I recently saw an article in The Atlantic with the title: Does the Rise of the Super-Wealthy Require New Global Rules? It’s a provocative question based on a book by Chrystia FreelandPlutocrats. I highly recommend taking the time to read it! Anyway, while the article was good, there was something near the beginning that caught my eye and made me think:

When the 113th Congress opened in January, the number of millionaires in its ranks rose to 257 out of 535, or just over 48 percent.

My first thought — that’s a lot of millionaires in Congress, isn’t it? Forty-eight percent! Then I thought, that percentage probably doesn’t hold for the whole population of the US. Meaning, 48% of the United States probably isn’t made up of millionaires. In fact, it’s not. A study found that there are 9 million millionaires in the US. If we use the clock on the US Census Bureau, we can say that there are approximately 316 million people living in the US. So, if we divide 316 million by 9 million, we get a percentage of… 2.85%. Meaning, 2.85% of the US are millionaires. And yet, 48% of Congress are millionaires. Is something wrong here?

The US has a representative democracy. This means that a group of elected officials represent the people who elected them. Maybe it’s just me, but isn’t the keyword here representative? Do we really think that a Congress in which 48% of the body are millionaires can accurately represent a population in which only 2.85% are millionaires?

If you’re an American, this is certainly something worth thinking about today as you enjoy your holiday.

PS: Happy Independency Day!

What Money Can[‘t] Buy – Everything and Nothing

Now that the semester has concluded, I can get to some of the reading that I have put off for some time. One of the books I’ve been excited to read for a while, but wanted to wait until I had time to chew over the issues discussed is a book by Professor Michael Sandel: What Money Can’t Buy. I’ve previously talked about how much I enjoyed Prof. Sandel’s online course “Justice.” This is part of the reason I was excited to read his latest book. I just picked it up from the library yesterday and have already zoomed through the introduction. Here’s an excerpt that I thought was particularly on point for the subject:

If the only advantage of affluence were the ability to buy yachts, sports cars, and fancy vacations, inequalities of income and wealth would not matter very much. But as money comes to buy more and more — political influence, good medical care, a home in a safe neighborhood rather than a crime-ridden one, access to elite schools rather than failing ones — the distribution of income and wealth looms larger and larger. Where all good things are bought and sold, having money makes all the difference in the world. (p. 8).

There are certainly going to be other passages that I’ll want to talk about, so look for other posts on this book in the coming weeks/months.

Can We Make “Looking Down Your Nose” a Good Thing?

A couple of days ago I mentioned that I was going to be doing a post about Chrystia Freeland‘s book Plutocrats. I haven’t yet finished it, but there is something I wanted to talk about before I got to the end. I’m about halfway through the book and the main focus of the conversation is the 0.1% vs. the 1%. The sad truth in Freeland’s words is that those in the 1% continue to spend like they’re in the 0.1% (for a variety of reasons that I won’t get into right now). The important piece here is that they’re not happy with where they are — and they’re looking up.

The idea of the “grass is greener on the other side” seems to be a theme that runs throughout (at least the first half) of Freeland’s book. So, as I was reading, I thought, if people just looked down, they’d be a lot happier. Proverbially down, of course. And not in a pejorative fashion as in the phrase, “looking down your nose.”

I’m sure you’ve heard the phrase that someone’s always got it worse than you — why don’t we implement this as a way of being? Instead of being upset that we can’t buy the newest Bentley or Ferrari, why can’t we “look down” to the person next on the wealth list and realize that we have it better than they do? I hope it’s clear that I’m not suggesting that people think of themselves as “better than” the people who would follow them on a wealth list. I’m merely trying to emphasize how well that people have it and that if they compared themselves (down the chain) they’d probably feel better about themselves. My secret wish is that this would also foster more empathy within us.

So, I wonder… do you think that we can take back the phrase “looking down your nose at someone” and turn it into a good thing? Probably not, but I hope that the next time you hear someone say this (or the next time you think it?) you’ll remember my brief conversation about how much better we’d feel if we compared ourselves to those who had less than to those who have more.

Perception vs. Reality: Revisiting Wealth Inequality in America

This past summer, I wrote a post that shared some information about wealth inequality in the US. I was actually sharing information that had been published the summer before (in 2011). There was a telling graphic that followed as a result of the study (I’ve included it below): Average Income by Family, distributed by income group.

Keeping in mind that this study was published in 2011, so the three boxes may have shifted. If anything, I would imagine that the actual distribution (the top box) is more pronounced in its inequality and because of Occupy Wall Street and books like Chrystia Freeland‘s Plutocrats (which I’m currently reading and will probably have a post on in the near future), I would guess that people would be more aware of the wealth inequality, so the middle box would also be more pronounced in its inequality.

The reason that I decided to revisit this information is because there’s a video that’s being passed around that uses the information from this study (and this graphic) and presents it in a much more effective way. Before reading on, I’d urge you to watch it:

Now, can you see how much more effective that is in accentuating the differences between perception and reality? I especially appreciated the way the creator of the video used the an aggregate of 100 people to illustrate the differences between the percentiles. I’ve found that when numbers get really large, it can be hard for people to conceptualize the differences. For instances, if we look at the graphic above (in this post), the differences are plain to see, but there’s something about the limits of the rectangle. The representation of the quintiles don’t make for easy transferability from one quintile to the next. That is, it might be hard for to conceptualize that each of those colors is suppose to represent 20% of the population. In watching the video, though, the creator so eloquently differentiated between quintiles by taking an aggregate of 100 people and then actually showing the people from each group.

I think the video was really well done and I hope that it raises public awareness around this important issue. More than that, I hope that it motivates the public to actually want something to get done. If enough of the population pressures their legislators, we just might be able to make a change.

Wealth Distribution in America: It’s Not What Americans Think or Want

There were some interesting enlightening findings published last year from two well-respected researchers (Norton and Ariely) on the topic of wealth distribution. I remember seeing it last year when it came out and it being rather startling. I came across it again a couple of weeks ago and had it bookmarked to see if I could glean any other insights from it. I stumbled across the bookmark this morning and thought I’d post it here, in case any of you had any thoughts you wanted to offer on the research findings.

Specifically, I’m referring to a chart that came from the article the two researchers published and was reproduced by Mother Jones (political magazine). Here’s the chart from Mother Jones (note: the chart from the published journal article is the same in content):

Average Income by Family, distributed by income group.

A bit startling, huh? I find it fascinating that Americans want the top 20% to have ~32% and that they actually have almost triple that much!

Some important things to think about from the authors [emphasis added]:

Given the consensus among disparate groups on the gap between an ideal distribution of wealth and the actual level of wealth inequality, why are more Americans, especially those with low income, not advocating for greater redistribution of wealth? First, our results demonstrate that Americans appear to drastically underestimate the current level of wealth inequality, suggesting they may simply be unaware of the gap. Second, just as people have erroneous beliefs about the actual level of wealth inequality, they may also hold overly optimistic beliefs about opportunities for social mobility in the United States, beliefs which in turn may drive support for unequal distributions of wealth. Third, despite the fact that conservatives and liberals in our sample agree that the current level of inequality is far from ideal, public disagreements about the causes of that inequality may drown out this consensus. Finally, and more broadly, Americans exhibit a general disconnect between their attitudes toward economic inequality and their self-interest and public policy preferences, suggesting that even given increased awareness of the gap between ideal and actual wealth distributions, Americans may remain unlikely to advocate for policies that would narrow this gap.

The ironic piece to this entire discussion is that conservatives and liberals agree that the level of inequality is ideal. However, as with just about everything in politics these days, these two ideologically different groups of people disagree about the best way to resolve it.