New 2015 Wealth Data: U.S. Inequality at its Ugliest–A Credit Suisse Report–2015

WealthInequality--From Paul Buchheit, Nation of Change

 

 10/19/2015: New 2015 Wealth Data: U.S. Inequality at its Ugliest 

Referenced from Paul Buchheit, Nation of Change

The Global Wealth Databook and Global Wealth Report can be found at:  http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=C26E3824-E868-56E0-CCA04D4BB9B9ADD5 or 

https://www.credit-suisse.com/ch/en/news-and-expertise/research/credit-suisse-research-institute/publications.html 

  1. The Big Picture: Only Kazakhstan, Libya, Russia, and Ukraine Have Worse Wealth Inequality than the United States 

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Unless otherwise noted, Tables referenced below are in the Databook.  

Preface:  Since 2010, the Credit Suisse Wealth Report has been the leading reference on global wealth. It contains the most comprehensive and up-to-date findings on global wealth across the entire wealth spectrum – from the very base of the “wealth pyramid,” capturing 3.4 billion adults with wealth below USD 10,000, to the millionaires, who account for 0.7% of adult population, but yet own 45.2% of global wealth. Research for the Credit Suisse Global Wealth Databook has been undertaken on behalf of the Credit Suisse Research Institute by Professors Anthony Shorrocks and Jim Davies, recognized authorities on this topic and the architects and principal authors of “Personal Wealth from a Global Perspective,” Oxford University Press, 2008. Rodrigo Lluberas has also been a very significant contributor to the project. The aim of the Credit Suisse Global Wealth project is to provide the best available estimates of the wealth holdings of households around the world for the period since the year 2000. While the Credit Suisse Global Wealth Report highlights the main findings of our study, this 158-page Databook underlines the extent of our analysis. More importantly, it sets out in detail the data employed in our Global Wealth project, the methodology used to calculate estimates of wealth and how this may differ from other reports in this field. The Credit Suisse Global Wealth Databook provides detailed information on the evolution of household wealth levels through the period 2000 to mid-2015 at both the regional and country level. It presents our estimates on the distribution of wealth for over 200 countries. Based on this rich data, the Databook presents findings on the global middle class, its size and how it fared over time. 

Excerpts from the Report: 

  1. At the Bottom: Of the Half-Billion Poorest Adults in the World, One out of Ten is an American 

Table 3-4: 10.2 percent of the people in the world’s lowest decile (i.e., lowest 10%) are in the U.S. 

Table 2-4: The world has nearly 4.8 billion adults. Each decile is about 480 million adults. 10.2 percent of the lowest decile = almost 50 million adults. 23.75 percent of the richest decile = about 113 million adults. America has about 243 million adults in total. 

 

  1. At the Top: The Richest 1/10 of American Adults Have Averaged Over $1 Million Each in New Wealth Since the Recession 

Table 2-4 (2009 and 2015): Total U.S. wealth grew from $53.5 trillion to $85.9 trillion in less than six years. Table 6-5 notes that the richest 10% own over 75 percent of the wealth, and thus have gained about $24 trillion in those six years. That’s an average of $1 million for each of the 24 million ten-percenters. The 1% owns 37 percent of the wealth, or close to $12 trillion, which averages out to about $5 million for each of the 2.43 million one-percenters. 

 

  1. In the Middle: The US is the Only Region Where the Middle-Class Does Not Own Its Equivalent Share of Wealth 

Table 4-2: North America has 38.8 percent of its people in the middle class, but they own just 21 percent of the wealth.  

Tables 4-4, 4-5: The wealth-deprived North American middle class is largely a U.S. phenomenon, as Mexico’s relatively small (percentage) middle class has over double its share of wealth, and Canada’s middle class, from a population a little over a tenth of the size of the U.S., has about 20 percent less than its share, compared to the U.S. with 50 percent less. 

Table 6-1: U.S. median wealth is just 1/7 of average wealth, which implies a skewing of wealth toward the top. Among other major nations, only Russia is worse. 

Global Wealth Report, p. 34: “A shortfall of the wealth share of the middle class below its population share is also evident in many individual countries outside North America, including every one of the G7 nations. Figure 4 shows that the shortfall is most acute in Switzerland, Singapore and the United States; but in Australia, Hong Kong SAR and Sweden the mean wealth of the middle class is also more than one-third lower than the average for the whole population…In contrast, for middle and low-income countries – such as Brazil, China, India, Indonesia and Mexico – the share of the middle-class wealth exceeds its population share (see Figure 4). This difference signals that in such countries members of the middle class are not ‘in the middle.’ Rather, they are towards the top of the distribution and there are relatively few people above them. The same is true for the world as a whole.” 

 

  1. In the Upper-Middle: For a Full 70% of Americans, Percentage Ownership of National Wealth is One of the Lowest in the World 

Table 1-5: The bottom 70% of Americans own just 6.9 percent of the wealth, a percentage far below all other major nations. Denmark is an anomaly. The Global Wealth Report 2010 said this about Denmark: “One unusual feature for Denmark is the very high level of personal debt, which amounts to over USD 120,000 per person, about ten times the global average. While debt may be underestimated in some other countries, this gap certainly also reflects ease of access to credit in Denmark and the lack of urgency in repayment of student loans…Relative to the rest of the world, the distribution of wealth in Denmark shows an unusually large proportion of the population with wealth below USD 1000, which at 30% is slightly above the world average. However Denmark also records four times the world average for the proportion of individuals with wealth exceeding USD 100,000. The high proportion of people with very low or negative net worth may reflect a range of factors, including high debt and low home ownership in some sections of the population, and also more young people being counted separately from their parents in the data than in other countries.” 

 

  1. The Big Picture: Only Kazakhstan, Libya, Russia, and Ukraine Have Worse Wealth Inequality than the United States 

Table 3-1: The U.S. Gini Coefficient is .85, higher than almost all other nations with a population of at least a million. Australia is at .64, Canada at .73, Germany at .78, Mexico at .76, and the UK at .68. Even China, where inequality is generally thought to be high and growing, the Gini is just .73, a reflection of its expanding middle class. Russia and Ukraine are both over .90.

 

 

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