The future economy
reset video
I'm a rocket ship on my way to Mars
The United States exhibits wider disparities of wealth between rich and poor than any other major developed nation.
excerpted from Inequality.org
We equate wealth with “net worth,” the sum total of your assets minus liabilities. Assets can include everything from an owned personal residence and cash in savings accounts to investments in stocks and bonds, real estate, and retirement accounts. Liabilities cover what a household owes: a car loan, credit card balance, student loan, mortgage, or any other bill yet to be paid. In the United States, wealth inequality runs even more pronounced than income inequality.
The most visible indicator of wealth inequality in America today may be the Forbes magazine list of the nation’s 400 richest. In 2018, the three men at the top of that list — Amazon founder Jeff Bezos, Microsoft founder Bill Gates, and investor Warren Buffett — held combined fortunes worth more than the total wealth of the poorest half of Americans.
In 1982, the “poorest” American listed on the first annual Forbes magazine list of America’s richest 400 had a net worth of $210 million in today’s dollars. The average member of that first list had a net worth of $590 million. In 2018, rich Americans needed net worth of $2.1 billion to enter the Forbes 400, and the average member held a net $7.2 billion, over 10 times the 1982 average after adjusting for inflation.
Inequality is skyrocketing even within the Forbes 400 list of America’s richest. In today’s dollars, the net worth of the richest member of the Forbes 400 has soared from $5 billion in 1982 to $160 billion in 2018, far outpacing the gains at either the Forbes 400 entry point or average. Since 1982, just seven men have held this spot: shipping magnate Daniel Ludwig (1982), oil executive Gordon Getty (1983-1984), Walmart founder Sam Walton (1985-1988), media company owner John Kluge (1989-1991), Microsoft founder Bill Gates (1992-2017, except 1993), investor Warren Buffett (1993), and Amazon founder Jeff Bezos (2018).
Household Wealth
Over the past three decades, America’s most affluent families have added to their net worth, while those on the bottom have dipped into “negative wealth,” meaning the value of their debts exceeds the value of their assets.
Over the past century, the share of America’s wealth held by the nation’s wealthiest has changed markedly. That share peaked in the late 1920s, right before the Great Depression, then fell by more than half over the next three decades. But the equalizing trends of the mid 20th century have now been almost completely undone. At the top of the American economic summit, the richest of the nation’s rich now hold as large a wealth share as they did in the 1920s.
The rich don’t just have more wealth than everyone else. The bulk of their wealth comes from different — and more lucrative — asset sources. America’s top 1 percent, for instance, holds more than half the national wealth invested in stocks and mutual funds. Most of the wealth of Americans in the bottom 90 percent comes from their principal residences, the asset category that took the biggest hit during the Great Recession. These Americans also hold almost three-quarters of America’s debt.
The Racial Wealth Divide
The median Black family, with just over $3,500, owns just 2 percent of the wealth of the nearly $147,000 the median White family owns. The median Latino family, with just over $6,500, owns just 4 percent of the wealth of the median White family. Put differently, the median White family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family.
Families that have zero or even “negative” wealth (meaning the value of their debts exceeds the value of their assets) live on the edge, just one minor economic setback away from tragedy. Black and Latino families are much more likely to be in this precarious situation. The proportion of Black families with zero or negative wealth rose by 8.5 percent to 37 percent between 1983 and 2016. The proportion of Latino families with zero or negative net worth declined by 19 percent over the past 30 years but is still more than twice as high as the rate for Whites.
As with total wealth, homeownership is heavily skewed towards White families. In 2016, 72 percent of White families owned their home, compared to just 44 percent of Black families. Between 1983 and 2016, Latino homeownership increased by a dramatic nearly 40 percent, but it remains far below the rate for Whites, at just 45 percent.
Global Inequality
excerpted from Inequality.org
Inequality has been on the rise across the globe for several decades. Some countries have reduced the numbers of people living in extreme poverty. But economic gaps have continued to grow as the very richest amass unprecedented levels of wealth. Among industrial nations, the United States is by far the most top-heavy, with much greater shares of national wealth and income going to the richest 1 percent than any other country.
The world’s richest 1 percent, those with more than $1 million, own 45 percent of the world’s wealth. Adults with less than $10,000 in wealth make up 64 percent of the world’s population but hold less than 2 percent of global wealth. The world’s wealthiest individuals, those owning over $100,000 in assets, total less than 10 percent of the global population but own 84 percent of global wealth. Credit Suisse defines “wealth” as the value of a household’s financial assets plus real assets (principally housing), minus their debts.
“Ultra high net worth individuals” — the wealth management industry’s term for people worth more than $30 million — hold an astoundingly disproportionate share of global wealth. These wealth owners hold 11.3 percent of total global wealth, yet represent only a tiny fraction (0.003%) of the world population.
The world’s 10 richest billionaires, according to Forbes, own $745 billion in combined wealth, a sum greater than the total goods and services most nations produce on an annual basis. The globe is home to 2,208 billionaires, according to the 2018 Forbes ranking.
Those with extreme wealth have often accumulated their fortunes on the backs of people around the world who work for poor wages and under dangerous conditions. According to Oxfam, the wealth divide between the global billionaires and the bottom half of humanity is steadily growing. Between 2009 and 2017, the number of billionaires it took to equal the wealth of the world’s poorest 50 percent fell from 380 to 42.
Capgemini and RBC Wealth Management define a “high net worth individual” as someone with at least $1 million in investment assets (not including their primary residence and consumer goods). The vast bulk of the world’s millionaires hold less than $5 million. But the top tier of these wealthy individuals, those with at least $30 million, had the fastest growth rate between 2016 and 2017, rising 25.5 percent to 174,800.
Individuals with between $1 million and $5 million in investment assets make up the larger number of world millionaires. But those with more than $5 million hold a large majority (57 percent) of world millionaire wealth.
Global Income Inequality
Since 1980, the share of national income going to the richest 1 percent has increased rapidly in North America (defined here as the United States and Canada), China, India, and Russia and more moderately in Europe. World Inequality Lab researchers note that this period coincides with the rollback in these countries and regions of various post-World War II policies aimed at narrowing economic divides. By contrast, they point out, countries and regions that did not experience a post-war egalitarian regime, such as the Middle East, sub-Saharan Africa, and Brazil, have had relatively stable, but extremely high levels of inequality.
Rapid economic growth in Asia (particularly China and India) has lifted many people out of extreme poverty. But the global richest 1 percent has reaped a much greater share of the economic gains. Although their share of global income has declined somewhat since the 2008 financial crisis, at more than 20 percent it is still much higher than their 16 percent share in 1980.
U.S. Wealth Concentration Versus Other Countries
The top 1 percent in the United States holds 42.5 percent of national wealth, a far greater share than in other OECD countries. In no other industrial nation does the richest 1 percent own more than 28 percent of their country’s wealth.
The United States dominates the global population of high net worth individuals, with nearly 5.3 million individuals owning at least $1 million in financial assets (not including their primary residence or consumer goods).
China has had the most rapid growth in the share of world millionaires, jumping from 5 percent of the global total to 7 percent between 2017 and 2018. But more than 65 percent of the world’s millionaires continue to reside in Europe or North America, with 41 percent of these millionaires calling the United States home.
The United States is home to more than twice as many adults with at least $50 million in assets as the next five nations with the most super rich combined. China is rising rapidly up the ranks, with the number of individuals in the $50 million club rising from 9,555 to 16,511 between 2017 and 2018.
The United States has more wealth than any other nation. But America’s top-heavy distribution of wealth leaves typical American adults with far less wealth than their counterparts in other industrial nations.
Queen - Don't Stop Me Now
Tonight, I'm gonna have myself a real good time
I feel alive and the world I'll turn it inside out, yeah
And floating around in ecstasy
So don't stop me now don't stop me
'Cause I'm having a good time, having a good time
I'm a shooting star, leaping through the sky
Like a tiger defying the laws of gravity
I'm a racing car, passing by like Lady Godiva
I'm gonna go, go, go
There's no stopping me
I'm burnin' through the sky, yeah
Two hundred degrees
That's why they call me Mister Fahrenheit
I'm traveling at the speed of light
I wanna make a supersonic man out of you
Don't stop me now, I'm having such a good time
I'm having a ball
Don't stop me now
If you wanna have a good time, just give me a call
Don't stop me now ('cause I'm having a good time)
Don't stop me now (yes, I'm havin' a good time)
I don't want to stop at all
Yeah, I'm a rocket ship on my way to Mars
On a collision course
I am a satellite, I'm out of control
I am a sex machine, ready to reload
Like an atom bomb about to
Oh, oh, oh, oh, oh explode
I'm burnin' through the sky, yeah
Two hundred degrees
That's why they call me Mister Fahrenheit
I'm traveling at the speed of light
I wanna make a supersonic woman of you
Don't stop me, don't stop me
Don't stop me, hey, hey, hey
Don't stop me, don't stop me
Ooh ooh ooh, I like it
Don't stop me, don't stop me
Have a good time, good time
Don't stop me, don't stop me, ah
Oh yeah
Alright
Oh, I'm burnin' through the sky, yeah
Two hundred degrees
That's why they call me Mister Fahrenheit
I'm traveling at the speed of light
I wanna make a supersonic man out of you
Don't stop me now, I'm having such a good time
I'm having a ball
Don't stop me now
If you wanna have a good time (wooh)
Just give me a call (alright)
Don't stop me now ('cause I'm having a good time, yeah yeah)
Don't stop me now (yes, I'm havin' a good time)
I don't want to stop at all
La da da da daah
Da da da haa
Ha da da ha ha haaa
Ha da daa ha da da aaa
Ooh ooh ooh
Songwriters: Freddie Mercury
Don't Stop Me Now lyrics © Sony/ATV Music Publishing LLC
