Do the richest 10% of Americans hold 70% of America's wealth?

Question

This was apparently published in the Financial Times according to http://www.commondreams.org/headlines06/1206-01.htm

"The concentration of wealth in different countries varies considerably, with the top 10 per cent in the US holding 70 per cent of the country’s wealth, compared with 61 per cent in France, 56 per cent in the UK, 44 per cent in Germany and 39 per cent in Japan."

According to them, wealth disparity is greater in the US than it is in France, the UK, Germany, and Japan.

Do you believe it? What are your thoughts on these statistics?

Also (if this statistic is true), do you believe it has an effect on the functioning of democracy in these countries?

Answer 1

It only has as much effect as we allow it to have.

People are too easily swayed by silly commercials and believe whatever they want to believe without actually looking for any facts.

Since the richest people can afford to buy the most commercial time, it does have an effect on the outcome of democracy.

If people would just start thinking for themselves and looking at both sides of an issue before deciding instead of shouting down the opposing viewpoint, the world would be a much better place.

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Answer 2

There is a problem with comparing the wealth held in land and houses in rich and poor countries or even in rich and not so rich regions in the same country. The value of a house depends at least as much on the income of the people who might buy it as it does on construction costs. So someone who owns a home in New York has much more wealth than someone who owns the identical home in Kansas City or Omaha. But since you use up the return on the wealth by living in the house the extra wealth does not improve your quality of life,
The wealth held in financial assets is probably even more concentrated in the top few %.

Answer 3

It's not a question of believeing; these figures usually come from two independent sources: tax returns and longitudinal surveys, with both suggesting similar wealth distributions.

As to thoughts on these statistics, I would highly recommend this book: Edward N. Wolff, "Top Heavy: A Study of the Increasing Inequality of Wealth in America".

Answer 4

Sure, I believe that 30 million Americans own 70% of "wealth". While several thousand of those 30 million are the extremely wealthy that everybody loves to hate, the vast majority happen to be....drum roll please...retirees.

Retirees generally own their own home because they've been around long enough to pay off their mortgages. They've tended to find work over the years that pays them decent enough and they've squirreled away some savings in order to fund their retirement.

Contrast that with someone who is just starting out, who doesn't fully own their home yet, hasn't developed their skill set and hasn't had time to save money and accumulate assets. They have plenty of potential wealth, but they don't own the assets yet to show for it.

As for the disparities between U.S. and the other countries - my theory is that much of the wealth has flowed away from the other countries over the past couple of decades and much more wealth has been created in the U.S. over the same time period. Would you have have 25% of $100 or 10% of $1,000?

Answer 5

The US has millions of dirt poor people flooding into the country to escape poverty in their own country. It is a given that that event will increase and distort the percentage of poor people.

The countries you listed have stagnant population growth. Give them millions of poor people and their percentages would change, also.

The global economic boom of the past 25 years or so was centered in the US and our capital markets. It created a whole lot of rich people. The US and the world would certainly not be better off without Bill Gates, Michael Dell, Arthur Blank (Home Depot), Jack Welch (GE)....

My thoughts:
The most unproductive activity in the US is to dwell on what others have. You might as well wear a T-Shirt that says, "I want to be poor."
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Answer 6

the richest 5% control 95% of the wealth.. Bill Gates alone controls around 1%.. it's crazy..