This chart below stood out to me (data is from US). People were asked how they thought wealth was distributed within society and as you can see the average estimate was much more equally weighted than reality. Then people were asked the ideal split which is shown at the bottom.
So people think that the poorest 40% of the population own about 8% of the wealth and should own almost 25%, but in reality they own <1%.
If people did not leverage their spending by through credit cards, mortgages, and other debt, they would not have zero net worth. The 40th percentile US person is not living a lifestyle of zero wealth, even if that is that person’s paper net worth.
It’s percentage of wealth. By definition, the bottom 1% of the nation’s wealth is the bottom 1% of the nation’s wealth. Simply comparing lifestyles (which obscures concepts such as stability that come with wealth) doesn’t change the facts of the wealth distribution. Most Americans may drive a better car than Warren Buffet, but that doesn’t change the wealth statistics. The biggest issue with this wealth distribution are the barriers to class mobility and rent seeking behavior it creates. Besides that, a system that “allows” the bottom 40%'s lifestyle through financial independence is arguably less robust.
Indeed. My point is that wealth distributions do not always capture standard of living distributions, and furthermore, that wealth at the low threshold is influenced by spending behavior.
My understanding is that distributions like this tend to increase and decrease from the less to the more concentrated positions over time, and that things like the 20s boom and crash happen when it gets more concentrated. Not that they’re necessarily directly causal, but an interesting thought. I imagine this is only going to get more concentrated in the future with increased automation, but maybe it won’t. Maybe those unthought up industries and jobs will start employing huge numbers of americans (and not people worldwide, at ever lower wages as technology becomes more equally distributed) with “good quality” jobs.
