03 January 2011

Waiter! About My Order! Wealth Distribution in the US

Here is a fascinating piece on wealth distribution by UC Santa Cruz professor G. William Domhoff.

To put this in perspective, imagine comments on yelp from reviewers who had dined at a restaurant where the waiter served one guy 42 hamburgers, the next 19 guys a total of 50 burgers and then made the last 80 people share just 7 burgers. My guess is that patrons would be less than impressed with the service (or might suspect that they were on candid camera). And yet we accept an economic system that distributes wealth just that poorly.

Here are some of the more amazing facts about wealth and income in the US.

The bottom 40% of households have only 0.3% of the wealth. That's not 3/10th. That's 3/1,000th.

The median white household has about $43,600 in net worth (not counting house value). For black and Hispanic households, median wealth is $500 and $400. That's right. Total net worth less than the typical monthly rent.

The top 10% of American households hold 70% of the wealth. Only Switzerland, a country that did not let women vote until 1970, has more inequality. In Germany and Finland, the top 10% have less than 50% (44% and 42%, respectively).

Income for the top 1% of Americans between 1982 and 2006 rose from 12.8% to 21.3% of all income, income mostly shifted from the bottom 80%.

The ratio of CEO pay to average factory worker pay peaked at about 500 to 1 in 2000 in the US. By contrast, in Europe, the ratio is 25 to 1.

In 2004, the top 1/10th of one percent made more than the lowest paid 120 million Americans.


“The reason socialism never took hold in America is because the poor don’t see themselves as exploited proletariat so much as temporarily embarrassed millionaires.”
-          John Steinbeck

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