The World's Richest 8% Earn Half of All Planetary Income

[TalkingDog]

http://www.alternet.org/news-amp-politics/richest-8-earn-50-earths-incomes

The lead research economist at the World Bank, Branko Milanovic, will be reporting soon, in the journal Global Policy, the first calculation of global income-inequality, and he has found that the top 8% of global earners are drawing 50% of all of this planet's income. He notes: "Global inequality is much greater than inequality within any individual country," because the stark inequality between countries adds to the inequality within any one of them, and because most people live in extremely poor countries, largely the nations within three thousand miles of the Equator, where it's already too hot, even without the global warming that scientists say will heat the world much more from now on.

For example, the World Bank's list of "GDP per capita (current US$)" shows that in 2011 this annual-income figure ranged from $231 in Democratic Republic of Congo at the Equator, to $171,465 in Monaco within Europe. The second-poorest and second-richest countries respectively were $271 in Burundi at the Equator, and $114,232 in Luxembourg within Europe. For comparisons, the U.S. was $48,112, and China was $5,445. Those few examples indicate how widely per-capita income ranges between nations, and how more heat means more poverty.

Wealth-inequality is always far higher than income-inequality, and therefore a reasonable estimate of personal wealth throughout the world would probably be somewhere on the order of the wealthiest 1% of people owning roughly half of all personal assets. These individuals might be considered the current aristocracy, insofar as their economic clout is about equal to that of all of the remaining 99% of the world's population.

Milanovich says: "Among the global top 1 per cent, we find the richest 12 per cent of Americans, ... and between 3 and 6 per cent of the richest Britons, Japanese, Germans and French. It is a 'club' that is still overwhelmingly composed of the 'old rich'," who pass on to their children (tax-free in the many countries that have no estate-taxes) the fortunes that they have accumulated, and who help set them up in businesses of their own - often after having sent them first to the most prestigious universities (many in the United States), where those children meet and make friends of others who are similarly situated as themselves.

[HiPointDem]

1. "It is a 'club' that is still overwhelmingly composed of the 'old rich'" = no duh. look around &

if you dig a bit you'll find a disproportionate share of people in public positions are spawn of people who made their pile before 1900.

not only in the us and britain, but in the 'new economies' as well.

for example the tata family in india were compradors of the british in the 19th century. Started in opium and moved into cotton, textiles and beyond, as comprador to the british interests that controlled india.

Under the name Tata & Co, Ratanji ran an opium importing business in China, which was legal at the time.[1] In 1887, he and other merchants such as David Sassoon presented a petition on behalf of the opium traders to complain about a Hong Kong Legislative Council bill that threatened to affect their trade.

does indian capital control india today, or is it just the same of international interests who always ran the world in new disguises?

similarly, china's new capitalism was mostly financed by foreign capital, so is it really chinese, or is it some amalgamam?

[SharonAnn]

2. Don't say "earn". They don't "earn" it. They "receive" it. Perhaps they even "steal" it.

I have a real problem with using the word "earn" in context with what a persons "receives" when it relates to an extremely high income.

Usually these people do not "earn" anything near what they get paid. It's not as a result of the value of their work that they receive that much income. It's often as a result of rigging the system and manipulating others that they "receive" so much income.

[kelly1mm]

6. to get into the top 8% globally you need to make $14,300 per year. I can think of MANY

people who actually EARN that much. Do you make more than that? Did you steal it?

http://www.globalrichlist.com/

[Orrex]

3. As has been stated, they don't "earn" any of it

While we're at it, they probably control close to 90% of it.

[Kurovski]

5. Most of them belong on their own episode of "Hoarders".

It's just fucking absurd anyone still thinks this shit is admirable or healthy. it is insane.

[kelly1mm]

7. The top 8% of global income is $14,300 per year. Do you make more than that? Do you earn it? nt

[HiPointDem]

9. um, no. $14.3K is not the top 8%. I think you misread. Try this:

"Among the global top 1 per cent, we find the richest 12 per cent of Americans, ... and between 3 and 6 per cent of the richest Britons, Japanese, Germans and French. It is a 'club' that is still overwhelmingly composed of the 'old rich'," who pass on to their children"

[kelly1mm]

10. Um... yes. 14.3k IS the top 8% globally. You misread. Your quote has to do with the top 1%

globally, not the top 8% globally. Here is a calculator to check:

http://www.globalrichlist.com/

[HiPointDem]

12. you're right, i conflated it with the wealth distribution. after playing with the calculator i

conclude that it's kind of crap.

$500 puts me in the top 75%. nah. $500 a year won't even feed you half the year in the US. A ugandan tribesperson with no cash income can shelter & feed himself at least.

[AzDar]

4. K & R

[Martin Eden]

8. No, they don't.

They don't EARN it.

[tammywammy]

13. It's in global income

I'm in the top 0.13% and I earn every penny of my salary.

http://www.globalrichlist.com/

An annual salary of $14,300 puts you in the top 8% globally.

[Martin Eden]

15. OK, I was thinking in terms of wealth concentration in the US

Of course, cost of living is much different elsewhere so annual $$ income is not exactly a 1:1 correlation to standard of living.

[Rex]

11. But there is no plutocracy at work here!

Just some rich people that got lucky and made it! I cannot WAIT for the day that it is the 5% that own 80% of the planet and then finally the 1% that owns %100 of the earth!

YAY GREED!

[muriel_volestrangler]

14. A link to an earlier form of the paper

http://heymancenter.org/files/events/milanovic.pdf

(the published form is behind a paywall - there's a link to that at the Alertnet page).

To illustrate the difference in the economic positions of people from different countries, we resort to the same exercise as was sketched above: I divide the populations of all countries into groups of 5% (called ventiles, since there are 20 such groups in a population) running from the poorest to the richest. This is shown on the horizontal axis of Figure 7: the poorest ventile in any country will be at x=1. Consider for example the poorest 5% of people in the United States. I put them all together, and calculate their average income; I then do the same for the next 5%, then for the next 5% --all the way to the very top, richest ventile. The poorest 5% of Americans are making around $3-4,000 per capita per year. How do they compare with the rest of the world? In what percentile of the global income distribution would they be? This is shown on the vertical axis. We can start with intuition: poor Americans are unlikely to be among the poorest people globally speaking, because their incomes are not that low. For example, we know that some 20 percent of global population live at less than 1 international dollar per day, while the US poverty line (below which, in principle, nobody in the United States should fall) is 13 dollars per day. Thus, intuitively and based on such very limited evidence, we can already expect the poorest Americans to be relatively high up in the global income distribution. Indeed, as shown by the graph, the poorest Americans are at the 60th percentile of world income distribution. This means that they have higher annual income than 60% of the world population. As one moves higher up, obviously each richer ventile of Americans will stand even higher in the world income distribution, with the richest 5% of Americans belonging to the global top 1 percent. (With a more detailed and finer partitioning it can be shown that the top 11 percent of Americans are all part of the highest global percentile, as we saw in Section 2.).

Median US income is at about the 93rd percentile, so just inside the group with the income of half of the world.

(The paper uses Purchasing Power Parity exchange rates, by the way, so this should help compensate for the different cost of living in different countries; though it can never be perfect - the weighting of goods across such a wide standard of living means there's never a 'correct' PPP rate for all countries to directly compare with all other countries).