The Distribution of Wealth……

15 Nov

The reality of everyday life has led us to accept that some are wealthy than others, either through an accident of birth, some extraordinary luck or plain old hard work. I thought I’d look at the richest nation on Earth to see the disparity between rich and poor; the United States of America.  You may, as did I, find the outcome quite incomprehensible but enlightening.

The disparity between rich and poor is in reality larger than the perception of the public’s impression of just how big that disparity is……

A Harvard Professor of Economics asked 5,000 people how they thought Americas’ wealth was distributed.  The graph below divides the population into 5 groups each representing 20% of the population, poorest on the left, richest on the right.


The bottom line represents how 92%, that’s 8 out of 10 Americans, would choose as an ideal distribution of wealth.

The line above represents how they thought the distribution of wealth actually is.


Here we add in the top line which shows the actual distribution of wealth.  Note that the bottom 40% is hardly visible and are hard to see on this graph.


The top 1% has more wealth than 9 out of 10 Americans believe the top 20% should have.


To help make things clearer we have taken the same 5 x 20% groups and made them into a representative 100 people.


Dividing the wealth proportionally to the 5 groups making up the 100 Americans, we have $54 trillion to allocate.


Divided equitably, here’s how it would look.  This is idealised socialism.


This is how the graph would look if the wealth was shared out according to the ideal expressed by 9 out of 10 Americans.


Again, this is how the graph would look according to how 9 out of 10 think the wealth is distributed.


This is the graph representing the reality of wealth distribution.  We’ve had to cut the last 3 columns of the richest 20% to fit it neatly on the page.  However, a new column has had to be created for the richest 1% (the column in black).  That 1% holds more wealth than all of the others added together.

The richest 1% of Americans has 40% of the wealth and the lowest 80% have only 7% of the wealth.

What this means is that the CEO of an American company earns 380 times the income of their average employee.  Not the lowest paid janitor but that of the average employee.  In other words the average employee earns in one month what the CEO earns in one hour.

I chose America because somebody more intelligent than me had already worked out the calculations but I imagine this is pretty close to the reality of most nations; and in many it is much worse.

Surely there will come a point when the inequality between the richest 1% and the poorest 40% will become apparent to more and more people, especially through social media.  Eventually, given that we are reaching a point where the disparity effects more than just the starving and oppressed people of the third world where the West continue to trample their populations with their sycophantic, ideological wars that serve no other purpose than creating yet more wealth, the people will decide enough is enough and something akin to an ‘Arab Spring’ will start to spread across ‘democratic’ western nations and revolutions will abound.  If I was in the top 20% of this unequal distribution of wealth, I would start to have serious concerns about my position in society and the company I keep……



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