While the United States and other Western nations enjoy a relatively high standard of living, it doesn’t mean that there aren’t some very serious economic problems plaguing them. In the US, conservatives are all about capitalism and free markets, and rightfully so, as these models have pulled more people from poverty than any other in history.
However, conservatives often have a significant blind-spot on the issue of wealth thanks to our desire for minimal government intervention and to keep what we earn. They are righteous beliefs, but somewhere along the way, the system we idealize started working more for the elite than the commoners. It’s not so much the model’s fault as it is the implementation and running of it. Highlighting the fact that the gap between the haves and have-nots is rapidly growing is a shocking new report.
As reported at the New York Post, the global imbalance of wealth has gotten so bad that the top 1 percent have accumulated more the half of the total world’s wealth and control over 50 percent of earth’s $280 trillion in assets.
That’s up from the 45.5 percent of the world’s wealth in the hands of the top 1 percent in 2000, according to data released Tuesday in Credit Suisse’s Global Wealth Report. The numbers rose so quickly thanks to the fact the rich’s assets were inherently more valuable, which resulted in their value increasing faster than those held by the remaining 99 percent of people on earth.
The top 1 percent aren’t the only group whose wealth is skyrocketing, however. Holdings of the top 5 and 10 percent also went up, and currently account for 76.4 percent and 87.8 percent, respectively, of total global wealth.
The silver lining is that Americans saw their wealth grow 10.1 percent in the past year, which was the most in the world. In the US, there were 1.1 million new millionaires created in the past 12 months — or one new millionaire every 30 seconds.
The average American adult is worth $388,585 in 2017, up from $211,000 in 2000. Taken at face value, this is a little deceiving. It’s skewed by the fact that Boomers and older generations have seen their assets increase in value over the last 17 years–assets that younger folks don’t even have to begin with. Younger generations are also not enjoying the same value or wage increases as their parents and grandparents. Controlling the data for age would be far more enlightening and reveal how stagnant wages and per capita, relative wealth, really are.
Thankfully, the report did do that to a degree. In the US, baby boomers — those aged 50 to 70 — continued to see their net worth grow the fastest. Millennials, however, have had “a run of bad luck,” according to the report.
This group, defined as “people who came of age after the turn of the century,” not only sustained capital losses in the global financial crisis but also carried the most student debt and faced stringent mortgage qualifications. Adding insult to injury is increased income inequality and lower income mobility, which has resulted in a “perfect storm” preventing wealth accumulation.
Needless to say, below the surface, things aren’t as great as they appear. It’s thanks to boomers that these kinds of statistics even look halfway decent. For folks under 40, the economic realities of modern America are very harsh.
Source: New York Post