Ragged riches: Statistically speaking

(Chart by Analoguni)

Horatio Alger notwithstanding, research indicates

that Americans who fall from riches to rags number twice as many as those who rise from rags to riches.

MSNBC’s Economy Watch recently reported on a Pew Charitable Trust’s Economic Mobility Project report which shows that only “4 percent of people who grew up in the bottom fifth of the household income ladder made it to the top fifth as adults,” whereas “8 percent of people whose parents were in the top fifth of households dropped to the bottom fifth as adults.”

Even though “the vast majority” of American families are bringing home bigger paychecks (“adjusted for

inflation”) than their parents did, they still haven’t been able to climb “the income ladder.”  This is largely because “median income has increased at all levels.”  However, most of those at the lowest rungs remain quite poor.  This report indicates that “70 percent of Americans whose parents were in the bottom fifth of the income ladder stayed below the middle as adults.”

Economic disparity is even more evident when international statistics enter the mix.  In 2006 the World Institute for Development Economics Research of the United Nations University (UNU-WIDER) released results from “the most comprehensive study of personal wealth ever undertaken…”  Within this study, “wealth” refers to “the value of all household resources, including human capabilities.”

Results from this study indicated the following:  “Average wealth amounted to $144,000 per person in the USA in year 2000, and $181,000 in Japan.  Lower down among countries with wealth data are India, with per capita assets of $1,100, and Indonesia with $1,400 per capita.”

This paints a frightening picture of the haves and have nots.  Although “fair is not equal,” perhaps “fair” should not be that unequal, either…

Resources

http://economywatch.msnbc.msn.com/_news/2012/07/09/12645408-rags-to-riches-thats-hollywood-fiction-study-finds?lite

http://www.mindfully.org/WTO/2006/Household-Wealth-Gap5dec06.htm

Copyright July 20, 2012 by Linda Van Slyke   All Rights Reserved