“A U.S. child born in the bottom 20 percent of the income distribution, for example, has a 7.5 percent probability of reaching the top 20 percent as an adult, compared to 11.7 percent in Denmark and 13.4 percent in Canada” Center For American Progress, Link
“In 2013, families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent. Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt”. Congressional Budget Office
Last year, Ray Dalio ruffled some feathers on CNBC when he spoke out about America’s growing wealth inequality problem.
He doesn’t usually do interviews, and if he does, it’s usually because he feels passionate about a particular issue, and wishes to share his ideas with the public. Yet even in light of the glaring statistical data, Joe Kernen was surprisingly dismissive of Dalio, continuously interrupting him before he could finish his points, and acting in a way that could best be described as obtuse.
If the guest had been anybody else, you might have been able to give Kernen somewhat of a pass, but Ray Dalio is one of the most respected businessmen in the world, known for his strong character and propensity for careful and mechanical calculation.
Granted, even if he might be slightly off base with the capitalism argument, certainly we can all agree that something is very, very wrong here.
The chart below illustrates wealth concentration by percentage of the population
Maybe you are questioning if that is real? Unfortunately no, you are not imagining things, and yes, those are real figures.
But if you showed this to someone like Joe Kernen, they would probably reply with the cliche response, “you’re just making excuses”, or “stop blaming the world for your problems”, but this is always easy to say when you are on the other side of the fence. For those growing up in families of four (or even two), with a single parent, things become very different.
A lot has changed since Joe Kernen’s days, especially for anybody who isn’t in the top 20% of income earners.
Tuition costs can range anywhere from $20 000 – $40 000 per year. Rent is $1000.00 per month , and don’t forget, if these students decide to somehow manage to balance their school work with a part time job, they will almost certainly be getting paid the minimum wage at the generous rate of $7.25 per hour.
From robertreich.org: “The gap has continued to widen in the recovery(2008 recession). According to the Census Bureau, median family and median household incomes have been falling, adjusted for inflation; while according to the data gathered by my colleague Emmanuel Saez, the income of the wealthiest 1 percent has soared by 31 percent. In fact, Saez has calculated that 95 percent of all economic gains since the recovery began have gone to the top 1 percent“.
Purists who blindly believe in the system might attempt to argue that this is just nature sorting through the dead weight, and that if you are part of this hereditary privileged class, it is because you belong there. Christians might even say that this is god’s will.
We can only hope that this is not the case.
As a society, we should strive for something better than this. Students being turned into debt slaves while the mega rich hoard all the wealth is not something to be proud of. We can cite Adam Smith all day, but reality and theory are usually two completely different things, and this becomes glaringly obvious when you consider those above figures.
If this is the way it is supposed to be, how are we any different than animals at this point, where genetic predisposition is not just the main decider, but the only decider of a persons fate?