The topic of income inequality has become more and more popular over the last years. And we aren’t just talking about the US, but around the whole world. There have been multiple protests (some even on Wall Street). The problem is in the statistic that states that 1% of the world’s population holds more than 44% of household wealth.
Top 1% Receive The Highest Wages
The top 1% in the US is said to have received the highest wages ever in 2017. Another report states that the income of the top 1% grew quicker than the income of the bottom 99 percent.
Income Disparity Around the World
There are differences between the countries around the world. A report by Bloomberg shows that it takes $488,000 to be part of the top 1% in the USA. For Australia it is only $246,000. This is partly connected to the differences in average income. In the USA it is $62,850 and in Australia – $53,190.
Looking at it globally, you will have to have a net worth of around $744,400 to be in the top 1% of the world’s wealthiest individuals.
How Does Debt Impacts Wealth
Americans rank in 4th place in household wages worldwide and in 22nd place in median wealth. This is because Americans use many sources of credit. Their household debt has been $13.21 trillion in 2018. A survey showed that the best earning years are also peak debt years. People between the ages 35 to 44 have the most debt – $133,100.
Causes of Income Inequality
Inequality coils have also been caused by the economic growth that the USA experienced after the Great Recession. At this time there was very little wage growth amongst middle-class and lower-class Americans. The biggest wage growth was experienced by the ones who already ranked amongst the wealthiest. Lower- and middle-class wages have mostly stagnated and, at times, even declined.
Real wages have changed very little in decades. Although the job market has been strong and the economy has been doing good, there is an issue with the wages people receive. This is why many protests were organized and later on legislation around raising minimum wages has been changed for the better.
Extreme Poverty As a Barrier
If we look at poverty around the globe it will become clear the population of developed countries are in general much better off than those from countries where the majority of their citizens experience poverty. In India, for instance, the average person has only $7,024 in assets, while an African citizen – only $4,138 in total wealth. For comparison, American and European adults possess $403,974 and $144,903, respectively.
As a conclusion, this shows us that although Americans have the right to protest for such a cause, we still shouldn’t forget that citizens of developed countries tend to be far more affluent than most people on earth.