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2,750 people have more wealth than half the planet, the poorest 50% of Americans possess less wealth than the poorest half of China's citizens

beijingwalker

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Global inequality report: 2,750 people have more wealth than half the planet, the poorest 50% of Americans possess less wealth than the poorest half of China's citizens
BY AIMEE PICCHI
DECEMBER 7, 2021 / 3:19 PM / MONEYWATCH

The globe's 2,750 billionaires now control 3% of all wealth, up from 1% in 1995 — that makes them wealthier than half the planet, according to a new report from a group founded by economist Thomas Piketty.

The wealth gap is roughly as wide as it was more than a century ago when the Gilded Age led to massive disparities between rich and poor, the World Inequality Lab found. The study was coordinated by Piketty, an expert on inequality known for his book "Capital in the Twenty-First Century," as well as fellow inequality experts Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley.

In the U.S., the gaps in wealth between rich and poor Americans "are close to those observed at the beginning of the 20th century," the study noted. The poorest Americans are falling behind their counterparts in other nations. Although average household wealth in the U.S. is more than three times that of China, the poorest 50% of Americans possess less wealth than the poorest half of China's citizens, the researchers found.

This divide wasn't always the reality in the U.S. In the decades after World War 2, the share of income enjoyed by the top 10% tumbled as progressive taxation redistributed money. Between 1944 and 1981, the top tax rate for the highest-earning Americans averaged 81%, compared with 37% today.

Other factors, including a decline in union participation and an increase in privatization, has contributed to the wealth and income gaps Americans are experiencing, with the bottom 50% seeing their share of income drop from 19% in 1980 to 13% today, the report said.

"If there is one lesson to be learnt from the global investigation carried out in this report, it is that inequality is always political choice," said Lucas Chancel, co-director of the Paris School of Economics' World Inequality Lab and lead author of the report, in a statement.


To be sure, the World Inequality Lab isn't the first group to point out widening wealth and income disparities. But the report's global approach underscores the challenges of coping with crises such as COVID-19 and climate change in a time of extreme concentration of wealth. Indeed, governments are becoming poorer, according to the report's data.

Public wealth — or public ownership of infrastructure such as schools and hospitals as well as financial assets (minus public debt) — stood at between 15% to 30% of total wealth in the early 1980s. But that's dropped to "near 0% in most rich countries," and actually is negative in the U.S., the report noted.

"The current weak wealth position of governments has important implications for governments' ability to tackle inequality in the future, as well as key challenges of the 21st century such as facing climate change," the report said.

.000001% are biggest winners
Since 1995, the global population has increased its wealth by about 3.2% annually. But the richest 0.000001%, or the likes of Jeff Bezos and his fellow 51 wealthiest billionaires, increased their wealth by more than 9% per year during that time, the study found.

"In the U.S., the return of top wealth inequality has been particularly dramatic, with the top 1% share nearing 35% in 2020, approaching its Gilded Age level" compared with less than 25% in 1970, the report noted.


The COVID-19 pandemic has only accelerated wealth accumulation by the ultra-rich, with the report noting that 2020 marked the biggest increase in the share of global billionaire wealth ever recorded. America's billionaires have seen their total wealth jump by 70% — the equivalent of more than $2 trillion — since the start of the pandemic, according to Inequality.org. The group estimates that U.S. billionaires now have combined wealth of $5 trillion, which amounts to more than a quarter of U.S. GDP.

COVID-19 aid reduced poverty
At the same time, the pandemic sparked an unprecedented government response in many countries, with the U.S. and other nations providing fiscal support to low- and middle-class families. That helped reduce poverty in America during 2020 even as the typical household lost income due to the pandemic's impact, according to Census data released earlier this year.

"This shows that Covid-related policies were critical to countering a rise in inequality and also that persistent poverty is not inevitable: It can indeed be countered with bold social policies," the report noted.

The findings come at a time when Democratic lawmakers in the U.S. want to boost taxes on the wealthy and corporations, arguing that doing so would enable the nation to pay for social programs like preschool and child care. But the Build Back Better bill faces opposition from Republican lawmakers, and its future is as of yet unclear.

 

DrJekyll

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Wealth distribution has always been grossly unequal. What is happening today is that education has become a massive differentiator for success in life, and education is becoming ridiculously expensive. It is very difficult for children from rural or poor backgrounds to compete in an increasingly technology driven world. Private companies seriously need to share wealth in the form of better salaries for the lowest paid workforce so that at least their children can change their lives.
 

Mista

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the poorest 50% of Americans possess less wealth than the poorest half of China's citizens, the researchers found.

Interesting. I reckon that culture plays a large factor as well. The poorest half of Chinese would still save and buy a property, while the poorest half of Americans probably live paycheck to paycheck.
 

FairAndUnbiased

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Interesting. I reckon that culture plays a large factor as well. The poorest half of Chinese would still save and buy a property, while the poorest half of Americans probably live paycheck to paycheck.

Not just culture. As someone in both societies it is cost of living.

Average wages in the US for millennials (aged 26-42) is $36000 per year or $3000 per month.


After tax that's about $2400 per month.


Average rent is $1100 per month.


Average electric cost is $114 per month


Average food cost is $387 per month.


Average cost of ownership for a car (required in most places in the US) is $900 per month until you pay it off.


Total cost to survive: $2501 if you haven't paid off your car, which exceeds the average take-home pay of $2400.
 

52051

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Not just culture. As someone in both societies it is cost of living.

Average wages in the US for millennials (aged 26-42) is $36000 per year or $3000 per month.


After tax that's about $2400 per month.


Average rent is $1100 per month.


Average electric cost is $114 per month


Average food cost is $387 per month.


Average cost of ownership for a car (required in most places in the US) is $900 per month until you pay it off.


Total cost to survive: $2501 if you haven't paid off your car, which exceeds the average take-home pay of $2400.

Well, they are talking about personal wealth, 90% of Chinese own properties, comparing to 60% or so americans, I think thats the major reason behind.
 

FairAndUnbiased

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Well, they are talking about personal wealth, 90% of Chinese own properties, comparing to 60% or so americans, I think thats the major reason behind.

Most Americans with property can't afford to own property outside their own homes.

Homeowners in the US also pay a property tax for the privilege of the magnificent government allowing your home to exist.
 

Shotgunner51

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Spot on! China has exceptionally high savings rate by world standard, such a phenomenon is also observed in other East Asian economies.

1.jpg

High savings possess fundamental impact on economic structure, say Chinese banking system is totally self-financed (by household savings deposits) even during credit booms, GDP carries a relatively high % in investment (while low % in consumption), international imbalances, etc. In fact many institutions have studied this cultural phenomenon and its influence on family/social norms as well as national/global economy, here are some reads:

 
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Mista

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Not just culture. As someone in both societies it is cost of living.

Average wages in the US for millennials (aged 26-42) is $36000 per year or $3000 per month.


After tax that's about $2400 per month.


Average rent is $1100 per month.


Average electric cost is $114 per month


Average food cost is $387 per month.


Average cost of ownership for a car (required in most places in the US) is $900 per month until you pay it off.


Total cost to survive: $2501 if you haven't paid off your car, which exceeds the average take-home pay of $2400.

You can just use PPP if you want to adjust for cost of living.

Those numbers (wages and cost of living) are similar to Singapore's, but Singapore has a saving rate of around 50%. The major difference is that we have a high home ownership rate and most of us don't rent, so we save/invest into our property instead of paying rent to 'consume'.

HK has a saving rate of around 25%. Home ownership is definitely a major factor.
 

mb444

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Global inequality report: 2,750 people have more wealth than half the planet, the poorest 50% of Americans possess less wealth than the poorest half of China's citizens
BY AIMEE PICCHI
DECEMBER 7, 2021 / 3:19 PM / MONEYWATCH

The globe's 2,750 billionaires now control 3% of all wealth, up from 1% in 1995 — that makes them wealthier than half the planet, according to a new report from a group founded by economist Thomas Piketty.

The wealth gap is roughly as wide as it was more than a century ago when the Gilded Age led to massive disparities between rich and poor, the World Inequality Lab found. The study was coordinated by Piketty, an expert on inequality known for his book "Capital in the Twenty-First Century," as well as fellow inequality experts Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley.

In the U.S., the gaps in wealth between rich and poor Americans "are close to those observed at the beginning of the 20th century," the study noted. The poorest Americans are falling behind their counterparts in other nations. Although average household wealth in the U.S. is more than three times that of China, the poorest 50% of Americans possess less wealth than the poorest half of China's citizens, the researchers found.

This divide wasn't always the reality in the U.S. In the decades after World War 2, the share of income enjoyed by the top 10% tumbled as progressive taxation redistributed money. Between 1944 and 1981, the top tax rate for the highest-earning Americans averaged 81%, compared with 37% today.

Other factors, including a decline in union participation and an increase in privatization, has contributed to the wealth and income gaps Americans are experiencing, with the bottom 50% seeing their share of income drop from 19% in 1980 to 13% today, the report said.

"If there is one lesson to be learnt from the global investigation carried out in this report, it is that inequality is always political choice," said Lucas Chancel, co-director of the Paris School of Economics' World Inequality Lab and lead author of the report, in a statement.


To be sure, the World Inequality Lab isn't the first group to point out widening wealth and income disparities. But the report's global approach underscores the challenges of coping with crises such as COVID-19 and climate change in a time of extreme concentration of wealth. Indeed, governments are becoming poorer, according to the report's data.

Public wealth — or public ownership of infrastructure such as schools and hospitals as well as financial assets (minus public debt) — stood at between 15% to 30% of total wealth in the early 1980s. But that's dropped to "near 0% in most rich countries," and actually is negative in the U.S., the report noted.

"The current weak wealth position of governments has important implications for governments' ability to tackle inequality in the future, as well as key challenges of the 21st century such as facing climate change," the report said.

.000001% are biggest winners
Since 1995, the global population has increased its wealth by about 3.2% annually. But the richest 0.000001%, or the likes of Jeff Bezos and his fellow 51 wealthiest billionaires, increased their wealth by more than 9% per year during that time, the study found.

"In the U.S., the return of top wealth inequality has been particularly dramatic, with the top 1% share nearing 35% in 2020, approaching its Gilded Age level" compared with less than 25% in 1970, the report noted.


The COVID-19 pandemic has only accelerated wealth accumulation by the ultra-rich, with the report noting that 2020 marked the biggest increase in the share of global billionaire wealth ever recorded. America's billionaires have seen their total wealth jump by 70% — the equivalent of more than $2 trillion — since the start of the pandemic, according to Inequality.org. The group estimates that U.S. billionaires now have combined wealth of $5 trillion, which amounts to more than a quarter of U.S. GDP.

COVID-19 aid reduced poverty
At the same time, the pandemic sparked an unprecedented government response in many countries, with the U.S. and other nations providing fiscal support to low- and middle-class families. That helped reduce poverty in America during 2020 even as the typical household lost income due to the pandemic's impact, according to Census data released earlier this year.

"This shows that Covid-related policies were critical to countering a rise in inequality and also that persistent poverty is not inevitable: It can indeed be countered with bold social policies," the report noted.

The findings come at a time when Democratic lawmakers in the U.S. want to boost taxes on the wealthy and corporations, arguing that doing so would enable the nation to pay for social programs like preschool and child care. But the Build Back Better bill faces opposition from Republican lawmakers, and its future is as of yet unclear.



In absolute numbers would the bottom 50% of chinese not number four times the number of Americans. So as long as per capita chinese income in these levels is over 25% of US citizens income then in absolute terms 50% of poorest chinese obviously would have more cumulative wealth than bottom 50% Americans.

So whats the big deal here? Where is the news?
 
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nahtanbob

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Interesting. I reckon that culture plays a large factor as well. The poorest half of Chinese would still save and buy a property, while the poorest half of Americans probably live paycheck to paycheck.

If I was 45 years old and I lost my entire wealth given my education, financial habits & work ethic I still could easily beat the median
 

crankthatskunk

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This report proved that there is more poverty in India compared to Pakistan.
I have repeatedly written that comparing purely the Per Capita GDP is very misleading without looking at different factors like local purchasing power parity and also distribution of income.

On distribution of Income India is among the worst in the world. Thus most of its population is worse off. GDP figures are distorted from the wealth of less than 1% people, who are holding a huge chunk of the wealth.

1638996165468.png
 

FairAndUnbiased

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You can just use PPP if you want to adjust for cost of living.

Those numbers (wages and cost of living) are similar to Singapore's, but Singapore has a saving rate of around 50%. The major difference is that we have a high home ownership rate and most of us don't rent, so we save/invest into our property instead of paying rent to 'consume'.

HK has a saving rate of around 25%. Home ownership is definitely a major factor.

Also car costs. You don't need a car in China or Singapore but you need a car in the US just to survive.
 

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