Wealth Inequality in America

Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

References:

http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
http://danariely.com/2010/09/30/wealth-inequality/
http://thinkprogress.org/economy/2011/10/03/334156/top-five-wealthiest-one-percent/
http://money.cnn.com/2012/04/19/news/economy/ceo-pay/index.htm

There's a chart I saw recently
that I can't get out of my head.

A Harvard business professor and economist

asked more than 5,000 Americans

how they thought wealth
was distributed in the United States.

This is what they said
they thought it was:

Dividing the country into
five rough groups

of the top, bottom, and middle three
20 percent groups,

they asked people how they thought
the wealth in this country was divided.

Then he asked them what they
thought was the ideal distribution.

And 92 percent, that's
at least nine out of 10 of them,

said it should be more like this:

In other words, more equitable
than they think it is.

Now, that fact is telling, admittedly:
the notion that

most Americans know that the
system is already skewed unfairly.

But what's most interesting to me
is the reality compared to our perception.

The ideal is as far removed from
our perception of reality

as the actual distribution is from
what we think exists in this country.

So, ignore the ideal for a moment.

Here's what we think it is again,

and here is the actual distribution.

Shockingly skewed.

Not only do the bottom
20 percent and the next 20 percent,

the bottom 40 percent of
Americans barely have any of the wealth.

I mean, it's hard to even
see them on the chart.

But the top one percent has
more of the country's wealth than nine

out of 10 Americans believe
the entire top 20 percent should have.

Mind-blowing.
But let's look at it another way,

because I find this chart kind of
difficult to wrap my head around.

Instead, let's reduce the
311 million Americans to just

a representative 100 people.
Make it simple.

Here they are; teachers, coaches,
firefighters, construction workers,

engineers, doctors, lawyers,
some investment bankers,

a CEO, maybe a celebrity or two.

Now, let's line them up
according to their wealth,

poorest people on the left,

wealthiest on the right,

just a steady row of folks
based on their net worth.

We'll color code them like
we did before based on

which 20 percent quintile they fall into.

Now, let's reduce the
total wealth of the United States

which was roughly $54 trillion in 2009,

to this symbolic pile of cash.

And let's distribute it
among our 100 Americans.

Well, here's socialism, all the
wealth of the country distributed equally.

We all know that won't work.

We need to encourage people
to work and work hard to

achieve that good ol' "American Dream"
and keep our country moving forward.

So, here's that ideal
we asked everyone about,

something like this curve.

This isn't too bad.

We've got some incentive
as the wealthiest folks are now

about 10 to 20 times better off
than the poorest Americans. But, hey!

Even the poor folks
aren't actually poor since

the poverty line has stayed
almost entirely off the chart.

We have a super-healthy middle class,

with a smooth transition into wealth.

And yes, Republicans and Democrats
alike chose this curve.

Nine out of 10 people, 92 percent,

said this was a nice ideal distribution
of America's wealth. But let's move on.

This is what people think America's
wealth distribution actually looks like.

Not as equitable, clearly,

but for me, even this
still looks pretty great.

Yes, the poorest 20 to 30 percent are

starting to suffer quite
a lot compared to the ideal,

and the middle class is certainly
struggling more than they were,

while the rich and wealthy are
making roughly 100 times that

of the poorest Americans,

and about 10 times that of the
still healthy middle-class.

Sadly, this isn't even
close to the reality.

Here is the actual distribution
of wealth in America.

The poorest Americans don't even register.

They're down to pocket change.

And the middle class is barely
distinguishable from the poor.

In fact, even the rich between the
top 10 and 20 percentile are worse off.

Only the top 10 percent are better off,

and how much better off?

So much better off that

the top two to five percent are actually
off the chart at this scale.

And the top one percent, this guy,

well his stack of money stretches
10 times higher than we can show.

Here's his stack of cash restacked,
all by itself.

This is the top one percent
we've been hearing so much about.

So much green in his pockets that I have
to give him a whole new column of his own,

because he won't fit on my chart.

One percent of America has
40 percent of all the nation's wealth.

The bottom 80 percent,

eight out of every ten
people or 80 out of these 100,

only has seven percent between them.

And this has only gotten worse
in the last 20 to 30 years.

While the richest one percent
take home almost a quarter

of the national income today,
in 1976, they took home only nine percent,

meaning their share of income
has nearly tripled in the last 30 years.

The top one percent only
half the country's stocks,

bonds, and mutual funds.

The bottom 50 percent of Americans own
only half a percent of these investments,

which means they aren't investing.

They're just scraping by.

I'm sure many of these wealthy people
have worked very hard for their money.

But do you really believe
that the CEO is working

380 times harder than
his average employee?

Not his lowest paid employee,

not the janitor, but the
average earner in his company?

The average worker needs to work more than

a month to earn what
the CEO makes in one hour.

We certainly don't have
to go all the way to socialism,

to find something that is fair
for hardworking Americans.

We don't even have to achieve
what most of us consider might be ideal.

All we need to do is
wake up and realize that

the reality in this country
is not at all what we think it is.