Wealth Distribution Inequalities: A Global Perspective
One arguably positive outcome from the cataclysmic global financial crisis of 2008 as well as the devastation and outcry that resulted in its wake remains the fact that it drew and captivated swaths of the world’s population on the seemingly intractable problem surrounding the deepening inequalities in wealth distribution in a way that was immediate, relatable and unrelenting.
The Occupy Wall Street Movement, which began in the fall of 2011 in Zuccotti Park awkwardly within New York City’s infamous Wall Street financial district and quickly spread to hundreds of global capitals and cities, was fundamentally premised on the belief that not only were there pervasive inequities in the distribution of wealth, the economic system was constitutionally skewed to the advantage of the rich and powerful.
Protesters believed that this structural imbalance was further exacerbated by rampant greed, corruption and the undue influence of corporate money in the political process; such that the apparatuses of government had unavoidably, been effectively emasculated into connivance.
So, there is a huge and alarmingly widening divide between 99% of ordinary folk and the 1% sitting comfortably atop the pyramid; which they not only viewed as indefensible and morally bankrupt but, perhaps more importantly, urgently threatening to the fabric of society.
Besides the fact that the messaging of this position was clever and alluringly populist---especially given that millions of middle class families laboring under the weight of the economic meltdown had lost their jobs, homes or life savings---there was a mountain of data that could easily be evoked to buttress this core argument.
The numbers are simply stark, even jaw-dropping.
A report released last October by the Congressional Budget Office (CBO) revealed that, between 1979 and 2007:
· The incomes of the top 1% of Americans grew by an average of 275%
· 60% of Americans in the middle of the income scale saw their income rise by 40%
· From 1992-2007 the top 400 income earners in the U.S. saw their income increase 392% and their average tax rate reduced by 37%
In 2007, while the top 20% of Americans owned 85% of the country's wealth (the richest 1% owned 34.6% compared to the remaining 19%’s 50.5%), the bottom 80% of the population owned 15%.
Additionally, it is now widely known that the foregoing picture had gotten desperately bleaker since the near collapse of the global financial system in 2008 and the onset of the Great Recession.
The share of total wealth owned by the top 1% of Americans ballooned from 34.6% to 37.1% while that controlled by the top 20% jumped from 85% to 87.7% at the same time that the top 1% only witnessed a paltry 11% drop in median household wealth compared to the whopping drop of 36.1% for the 99%.
It is frankly easy to see why many Americans are incensed, and rightfully so, by this brazen, widening and ever-deepening economic injustice.
Contrary to what many 1%s like Mitt Romney would like us to believe (that the 99%s are just player-hating or simply envious), this is a scathing indictment of the trickle-down philosophy that underlie the American economic system which John Kenneth Galbraith once aptly qualified as “the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”
Nonetheless, it is important to emphasize that this is not just an American phenomenon. Far from it, a comparable and occasionally more distressing picture obtains in most countries; such that, the disparity can in fact be more acute and menacing even in locales with the most underdeveloped, blighted economies partially because power in these constituencies is un-institutionalized and heavily concentrated.
A far telling and more hair-raising image begins to emerge when an effort is made to go beyond national boundaries in pitting the so-called mature or developed economies against their emerging/newly industrialized and underdeveloped counterparts.
Consider these dynamics:
· Most future population growth will happen in the less developed countries where birthrates remain highest (between 1.5 – 3.0 percent; compared to 0.40 – 0.96 in the mature/emerging economies).
· According to the Global Wealth Pyramid, 8.8% of the world’s population controls 82.2% of its wealth while 91.2% of the population owns only 17.8%.
· Almost half of the world’s population is currently living in “absolute poverty” (subsisting on $2 a day or less).
· Approximately 90% of the 60 million households with $200 purchasing power parity (PPP) per day live in Europe and the Americas; nearly 60% of these live in the United States alone.
· The world’s population of high net worth individuals (HNWIs)---individuals or families having investable assets in excess of $1 million---actuallyexpanded in 2010, as did their wealth. HNWIs’ financial wealth grew 9.7% in 2010 to reach $42.7 trillion, surpassing the 2007 pre-crisis peak.
· At the end of 2010, although Ultra-HNWIs (individuals or families with at least $30 million in investable assets or $20 million in disposable income) represented only 0.9% of the global HNWI population, they accounted for 36.1% of global HNWI wealth.
· According to the 2011 Credit Suisse Global Wealth Databook , the regional distribution of wealth looks something like this:
Latin America 4%
North America 28%
What seems obvious when one broadens or internationalizes the discourse is that justified as American 99%s may be in agitating for more transparency and a general leveling of the economic playfield in the US, the global situation is relatively more appalling and rather desperate.
Regardless of how one elects to embellish or rationalize it, it is an unspeakable miscarriage of economic justice for half of humanity to own 16% of the world’s wealth or be forced to eke out a living with $2 a day.
Amusingly, while on the one hand the bulk of the economically disenfranchised areas also happen to have some of the most astounding natural resource endowments, on the other, as far as global warming and planetary ecological health go, the historically advantaged areas have been some of the most egregious resource misuse offenders and worst greenhouse gas emitters; generally-speaking, they are wreaking havoc on the environment!
I personally believe that the time for wistful atonements is long gone; a serious discussion is warranted regarding what concrete, concerted steps, going forward, should be taken to infuse long-desired even-handedness in how mankind harvests, appropriates and utilizes the resources that providence has graciously bequeathed to all of us.