More Inequality Shock
Inequality is a cancer on society, here in the U.S. and across the globe. It keeps growing. But humanity seems helpless against it, as if it's an alien force that no one understands, even as the life is being gradually drained from its victims.
The recent Oxfam report on global wealth inequality reveals some of the ugly extremes that have divided our world. It also directs our attention to the Global Wealth Report compiled by Credit Suisse, and the companion Databook, which offer a shocking testament to the severity of U.S. and global inequality.
1. The 30 Richest Americans Own as much as Half of the U.S. Population
The Oxfam report tells us that 85 individuals own as much as half the world. The U.S. is the biggest reason for that, with 5% of the world's population and 30% of the wealth. China, India, and Africa, on the other hand, combine for about half the world's population and just 12% of the wealth.
In the U.S., the richest 30 individuals own about $792 billion, while the bottom half of Americans own 1.1% of our country's wealth, also about $792 billion. That's 30 people owning as much as 157,000,000 people.
2. The Bottom Half of America Owns a Smaller Percentage of National Wealth than Almost All Other Countries and Continents
The 1.1% of America's wealth owned by the poorest half is less than the poorest halves of Asia (1.3% of the region's wealth), Africa (2.1%), Latin America (3.2%), India (4.5%), the United Kingdom (7.6%), and China (9.6%).
It goes beyond the poorest half. The upper-middle class of America (roughly $50,000 to $200,000 in wealth) own a smaller percentage of wealth than the corresponding upper-middle classes of China and India. Of course, America's lower and middle classes have more money in absolute terms than corresponding classes in China and India. But that leads to the next topic.
3. Less Mobility: North America's Bottom Half Has Less Chance to MOVE UP than Any Other Region of the World
Conservatives argue that individuals should be able to improve their economic positions with personal initiative and hard work. But economic mobility is lower in the U.S. than in most developed countries. And lower than in many undeveloped countries.
The results of a Credit Suisse wealth mobility simulation are given in the Global Wealth Databook: "North America is...less mobile than other regions, especially over longer time horizons. Europe is next in line, followed by the middle group of Asia-Pacific, Latin America and Africa. The most mobile regions are China and India."
4. America's MIDDLE CLASS is Further from the Top than in All Other Developed Countries
As noted above, it's not just the bottom half being battered by inequality -- it's most of the rest of us. The U.S. median of $44,911 is only 15% of the $301,140 mean (which is greatly skewed by the wealth of the richest 10%). That ratio is less than any other of the 27 developed countries listed by Credit Suisse, and much less than the average OECD ratio of 35%.
For the world as a whole, the median is only 8% of the mean, reflecting the fact that half the world's adults average less than $500 in wealth.
The Greatest Shock: How Little is Needed to Restore Some Sanity
Extreme inequality means that people without homes are freezing to death in America. On a winter day in 2012 over 633,000 people were homeless in the United States. Based on an annual single room occupancy (SRO) cost of $558 per month, a little over $4 billion would provide shelter for every homeless person for the entire year.
The stock market grew by $4.7 trillion in 2013. A wealth tax of just a one-tenth of 1 percent (one dollar out of every thousand) would have provided the $4 billion needed to shelter every homeless American for 365 days.
But we have no wealth tax. And the wealth just keeps growing for the wealthiest Americans.