Will SOYMB ever weary of telling us about inequality?
When economists talk about income, they talk about the money a household or a person earns in a given year. That’s the salary you earned, the rent from a tenant above your garage and the bit of money you made by selling some stocks. Your wealth is the value of your assets – your retirement accounts, your home, the unsold stocks – minus your debts, like your credit-card bill and your mortgage. Another way of putting it is income is how much money comes into your bank account each year, and wealth is how much money you already have in it.
Numerous studies have shown income inequality growing since the late 1970s. Real earnings have fallen for many families, with globalization, the decline of unions and technological innovations eroding workers’ wages. But earnings have soared at the top, with corporate executives and families with significant income from investments making out especially well.
Surveys have generally shown wealth inequality growing, but more slowly than income inequality. Figures show a dramatic increase in wealth inequality at the very top of the distribution, among households with more than $20 million in wealth – and especially among those with more than $100 million. The so-called “middle rich” have actually been losing ground, wealth-wise, while the super-rich have accounted for a bigger and bigger share of the pie.
The top 0.01 percent—that is, the 1 percent of the 1 percent—have increased the most, almost quintupling their income share in the last 40 years. But the "bottom of the 1 percent" (the 99 to 99.5 percent) have increased too. So both the super-rich and the merely rich are growing faster than everyone else. But just because the rich are making more doesn't mean that they're worth more. The "bottom of the 1 percent" have actually seen their wealth share fall the last few decades. Only the top 0.1 percent, and really the top 0.01 percent, have increased theirs—in the latter case, almost four times.
This has resulted in an interesting phenomena - the lament of the HENRY (short for "high-earner, not rich yet") The merely rich don't think they are rich. They think "rich" means having the kind of aristocratic wealth that lets you quit your job and live comfortably off your interest income alone. They're wealthy, but they're not that wealthy—and they're not getting any more so. That doesn't make them "middle class."
It is much the same elsewhere. A report by the Canadian Centre for Policy Alternatives shows that the country's 86 richest individuals and families — or 0.002 per cent of the total population — are getting exponentially richer and now have accumulated as much wealth as the country's poorest 11.4 million. That's more than in 1999, when the richest 86 had as much money as the poorest 10.1 million and enough to buy up everything in New Brunswick and still have about $40 billion left over, according to the report. The super-rich list of Canadian residents has little to do with income in the traditional sense, he said. None of the 86 are company CEOs — often featured by Occupy for their unseemly salaries and bonuses. Instead, the ones on the list are there by virtue of being company founders or related to company founders. The super-rich have gotten there by creating and trading assets, whether companies, real estate or securities. The richest individuals and families in 2013 were pretty much the same people who made the list in 2005 and in 1999 — well-known family names like Thomson, Weston, Irving, Desmarais and Pattison. Between 1999 and 2013, the report shows that the wealthiest 86 Canadians had enlarged their pot of gold from $118 billion to $178 billion on real non-inflationary terms.
"We often focus on income inequality but that's a socialist paradise [sic] compared to wealth inequality," said says economist and author David Macdonald. "The top 20 per cent only get half of all the income, but in terms of wealth inequality, the top 20 per cent have 70 per cent of all wealth. It's much more extreme and the concern is as you accumulate all this wealth, this wealth starts to buy you political power."
Statistics Canada also showed wealth gravitating to the top. While median income rose almost 80 per cent since 1999 to $243,800 per family unit, the top 40 per cent possessed 88.9 per cent of total net worth, leaving the bottom 60 per cent with a mere 11.1 per cent of the pie. The data showed the poorest 20 per cent of family units had more debts than assets.
It does remind us that the future and the world doesn't belong to the 1 percent. It belongs to the top 0.01 percent (or even the 0.001%)—and they already own it.
When economists talk about income, they talk about the money a household or a person earns in a given year. That’s the salary you earned, the rent from a tenant above your garage and the bit of money you made by selling some stocks. Your wealth is the value of your assets – your retirement accounts, your home, the unsold stocks – minus your debts, like your credit-card bill and your mortgage. Another way of putting it is income is how much money comes into your bank account each year, and wealth is how much money you already have in it.
Numerous studies have shown income inequality growing since the late 1970s. Real earnings have fallen for many families, with globalization, the decline of unions and technological innovations eroding workers’ wages. But earnings have soared at the top, with corporate executives and families with significant income from investments making out especially well.
Surveys have generally shown wealth inequality growing, but more slowly than income inequality. Figures show a dramatic increase in wealth inequality at the very top of the distribution, among households with more than $20 million in wealth – and especially among those with more than $100 million. The so-called “middle rich” have actually been losing ground, wealth-wise, while the super-rich have accounted for a bigger and bigger share of the pie.
The top 0.01 percent—that is, the 1 percent of the 1 percent—have increased the most, almost quintupling their income share in the last 40 years. But the "bottom of the 1 percent" (the 99 to 99.5 percent) have increased too. So both the super-rich and the merely rich are growing faster than everyone else. But just because the rich are making more doesn't mean that they're worth more. The "bottom of the 1 percent" have actually seen their wealth share fall the last few decades. Only the top 0.1 percent, and really the top 0.01 percent, have increased theirs—in the latter case, almost four times.
This has resulted in an interesting phenomena - the lament of the HENRY (short for "high-earner, not rich yet") The merely rich don't think they are rich. They think "rich" means having the kind of aristocratic wealth that lets you quit your job and live comfortably off your interest income alone. They're wealthy, but they're not that wealthy—and they're not getting any more so. That doesn't make them "middle class."
It is much the same elsewhere. A report by the Canadian Centre for Policy Alternatives shows that the country's 86 richest individuals and families — or 0.002 per cent of the total population — are getting exponentially richer and now have accumulated as much wealth as the country's poorest 11.4 million. That's more than in 1999, when the richest 86 had as much money as the poorest 10.1 million and enough to buy up everything in New Brunswick and still have about $40 billion left over, according to the report. The super-rich list of Canadian residents has little to do with income in the traditional sense, he said. None of the 86 are company CEOs — often featured by Occupy for their unseemly salaries and bonuses. Instead, the ones on the list are there by virtue of being company founders or related to company founders. The super-rich have gotten there by creating and trading assets, whether companies, real estate or securities. The richest individuals and families in 2013 were pretty much the same people who made the list in 2005 and in 1999 — well-known family names like Thomson, Weston, Irving, Desmarais and Pattison. Between 1999 and 2013, the report shows that the wealthiest 86 Canadians had enlarged their pot of gold from $118 billion to $178 billion on real non-inflationary terms.
"We often focus on income inequality but that's a socialist paradise [sic] compared to wealth inequality," said says economist and author David Macdonald. "The top 20 per cent only get half of all the income, but in terms of wealth inequality, the top 20 per cent have 70 per cent of all wealth. It's much more extreme and the concern is as you accumulate all this wealth, this wealth starts to buy you political power."
Statistics Canada also showed wealth gravitating to the top. While median income rose almost 80 per cent since 1999 to $243,800 per family unit, the top 40 per cent possessed 88.9 per cent of total net worth, leaving the bottom 60 per cent with a mere 11.1 per cent of the pie. The data showed the poorest 20 per cent of family units had more debts than assets.
It does remind us that the future and the world doesn't belong to the 1 percent. It belongs to the top 0.01 percent (or even the 0.001%)—and they already own it.
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