Great Divide, Grand Gap– Rich Vs. Poor– Inequality Far Worse Than You Think: Tale of Two Worlds…

Richest 1% of world adults own about 40% of global assets and richest 10% of adults account for about 85% of global wealth… Whereas, the  bottom 50% of world adults own barely 1% of global wealth. In report by Oxfam International; richest 1% owned 48% of global wealth, in 2013… and in 2014, 85 wealthiest people in world had a combined wealth equal to that of bottom 50% of the world’s population… or, about 3.5 billion people… and it’s estimated that  wealthiest 1% will own more than 50% of global wealth by the end of 2016…

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According to estimates by Branko Milanovic and World Bank; some other interesting statistics that highlight economic disparities between rich and poor include: 

  • Richest 1% of people in the world receive as much as the bottom 57%, or in other words, less than 50 million richest people receive as much as 2.7 billion poor…
  • Three richest persons possess more financial assets than poorest 10% of the world’s population, combined…
  • Three richest persons in the world have total assets that exceed the annual combined GDP of 47 countries….
  • 6% of the world’s population owns 52% of the global assets. The richest 2% own more than 51% of the global assets and richest 10% own 85% of the global assets…
  • 50% of world’s population own less than 1% of global assets…
  • 1,125 billionaires own US$4.4 trillion in assets…
  • Over 80% of the world’s population lives on less than $10 per day; over 50% of world population lives on less than US$2/day; over 20% of world population lives on less than US$1.25/day…

Also, according to Anup Shah; other facts and statistics include:

  • Poorest 40% of world’s population accounts for 5% of global income., and richest 20% accounts for 75% of world income...
  • According to UNICEF; 22,000 children die every day due to poverty– they die quietly in some of poorest villages on earth, far removed from the scrutiny and conscience of the world…
  • Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation…
  • Some 1.8 million child deaths each year as a result of diarrhea, 2.2 million children die each year because they are not immunize, 15 million children orphaned due to HIV/AIDS…

In the article Wealth Gap, Rich And Poor by Joaquim Moreira Salles writes: The wealth disparity between middle and upper-income is at record high. According to Pew Research Report; today, upper-income families are almost 7 times wealthier than middle-income families as compared to 3.4 times wealthier, in 1984. When compared to lower income families; upper-income family are 70 times wealthier. It has come to the point where only top 10% are seeing wealth grow, while bottom 90% get less and less of the pie each year. The driving force of this wealth chasm are the top 0.1%, who have seen their share of the nation’s wealth grow the most over the past decades, from 7% in 1979, to 22% today… and the top 0.1% are now worth more than the entire bottom 90% of the U.S. population…

The study also assesses what effect the 2008 financial crisis had on wealth distribution. Although the crisis wreaked havoc across all income levels, its effects have been much more enduring for those on the lower-end of economic spectrum… The magnitude of wealth inequality reflects broader trend towards increasing disparities across the developed world,e.g.; surveys show that most people drastically underestimate the ‘CEO-to-worker-pay’ gap; survey respondents guessed that average CEO made 30 times as much as the average unskilled worker… when in fact actual ‘CEO-to-worker pay’ ratio is closer to 354-to-one, in the U.S.

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In the article The Rich and the Rest by Christina Pazzanese writes: The growing gap between the ‘rich and the rest’ isn’t a matter of who can afford yacht or Manhattan penthouse rather, it’s the crippling nature of disparities as they touch nearly every aspect of people’s lives, e.g.; career prospects, educational opportunities, health risks, neighborhood safety… The disparities of today’s wealthy rival levels last seen in the Gilded Age of the late 19th century… One difference, however, is that the grotesque chasm between that era’s ‘robber barons’ and ‘tenement dwellers’ led to major social policy reforms, such as; labor rights, women’s suffrage, federal regulatory agencies to oversee trade, banking, food and drugs…

According to Hendren; the chances of moving up the economic ladder are the same as they were 25 years ago, but the rungs on the ladder have gotten wider… The difference between being on top vs. bottom of the income distribution is wider, so the consequences of being born in poor family, in dollar terms, are wider… Unless policymakers begin to chip away at underlying elements of inequality, the costs to nations will be profound.

According to Katz; gridlock in Washington has diminished government effectiveness to address inequality and societal needs… government has become irrelevant and world has become– ‘everybody-for-themselves’… it’s the better-educated and the wealthy who are able to protect themselves, and the less privileged are left to fend for themselves…

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In the article Rich and the Rest by The Economist writes: More than 90% of all income gains since recession have gone to the top 1%… A big reason is education or lack of it… Just as new technology demands more highly skilled workers… the improvement in areas of education have stalled and many workers are failing to match the skills needed in technology… However it’s not only about school: According to Larry Bartel; growing inequality has political roots and money plays an ever-increasing role in politics– so goes the argument– as the clout of super-wealthy grows– and although the claim of political preference is hard to prove, the circumstantial evidence is substantial…

The rise of ‘super-PACs’, i.e.; privately funded organizations set-up to influence election outcomes… have raised hundreds of millions of dollars and research suggests that 80% comes from fewer than 200 donors… But whatever the cause, there is ever-increasing stratification of society and it has profound consequences: A country that prides itself on its social mobility is already less mobile than most people think… and the disparity of wealth is even greater than most people think…

In the article Far Worse Than You Think by Nicholas Fitz writes: Most people have no idea how unequal society has become. In surveys, the average person believes that the richest 20% owns 59% of the wealth and the bottom 40% own 9%… The reality is strikingly different: The top 20% of households own more than 84% of wealth and the bottom 40% combine for a paltry 0.3%…

According Norton and Kiatpongsan; in a study people were asked to estimate– the ‘CEO-to-worker pay’ ratio and general consensus was that the ratio was about 30-to-1; and ideally it should be about 7-to-1… But the reality is that the ‘CEO-to-worker pay’ ratio is closer to 354-to-1, in U.S. Fifty years ago it was 20-to-1.

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Why don’t governments in democratic societies do more to combat inequality? Scholars have grappled with this question for years… According to the ‘median voter theory’– a longstanding workhorse of political science; suggests that politicians who hope to get elected often campaign using rhetoric about mitigating inequality, in order to attract voters in the middle and lower ends of the spectrum, who feel left behind. Although the theory sound elegant it doesn’t quite mesh with reality…

Research reveals very little connection between inequality in any given country and its government’s effort to close the gap by taxing the rich to spend on the poor. There are good reasons: The poor vote less than the rich, hence reducing their electoral clout… Plus, they don’t vote exclusively on the basis of their economic self-interest but are often swayed by non-economic issues, e.g.; abortion, the environment, gun control… According to research; voters don’t demand more equality because they don’t fully grasp how deep economic inequality really is…