Friday, December 03, 2004

Wealth Inequality

Here are some disturbing statistics. Many studies focus on income, but the distribution of wealth is probably more revealing. The average net worth of the wealthiest 1% of Americans is $10M. The threshold net worth to be in the top 1% is probably a few million dollars. (This means easily more than a million households of millionaires.) Most studies show the level of inequality today to be at an all time high, rivalling only the period just before the great depression.

The US wealth distribution is the most unequal among all developed countries (the UK is second). Americans tend to tolerate this inequality, confident that our society allows for more economic mobility and is more meritocratic than others. I have heard rumors of recent studies showing that this is no longer the case. If so, it is only a matter of time before the have-nots in this country begin to resent the status quo.

I discussed income volatility in a previous post.

1 comment:

Anonymous said...

Not 80/20 anymore.

It may not be an economic law, but I recall some older and wiser saying that most of real life distributions are 20/80.
We are 15/80 here (or 20/85, as you wish), that is out of balance according to that rule of thumb...

An other inbalance is the income distibution inside of a corporation: I have read that the top wage as a multiple of the lowest salary is now at an historic height. As someone datas in a 20/80 distribution form for such income distribution on a company basis?

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