Recently, there have been numerous reports highlighting the distribution of wealth and income inequality in both America and around the world. The news is far from healthy:
- It is currently estimated that by the year 2016, the richest 1 percent will control more than half of the world’s wealth.
- Even more shocking, the combined wealth of the 80 richest people in the world is the same as that of the bottom 50% of the Earth’s population—totaling 3.5 billion people.
- In America, the wealth inequality gap continues to grow as America’s middle class shrinks. The share of American households in the middle class fell from 56.5 percent in 1979 to only 45.1 percent in 2012. And there is no indication this trend will reverse itself.
Regardless of how you think the problem should be resolved, this is not good news.
Numerous economic studies indicate the significant dangers to society when the wealth gap widens—both economically and for personal well-being. One of the most important factors designating first-world countries from third-world countries is the size of the middle class and opportunity for social mobility. I have seen firsthand the damaging effect of income inequality.
There are solutions to this problem and we need to find them.
But recently, I have begun noticing another unhealthy trend. One that may be related to the widening gap, but more likely, finds its root in the human spirit. It too requires a solution, albeit a much easier one to define.
This equally negative trend is the wealth gap we focus on in our mind and the resulting division we artificially create because of it.
Let me explain what I mean with a short story from this past weekend:
On Sunday, I was spending some time with neighbors. Economically speaking, we live very similar lives in our suburban neighborhood outside Phoenix. At one point, one of the guys struck up a conversation with one of the teenage boys in attendance—the son of another friend. In response to a question, the teenager mentioned the Soccer Club he had begun playing for. This Soccer Club, not too far down the road from us, just happens to be located in one of the wealthiest counties in the country.
My friend’s immediate response to this information was telling, “Oh, so you’re on a team with a bunch of rich kids?” The jealousy contained in his voice was difficult to mask.
His statement, I believe, is indicative of how most of us view wealth: “Those with more are the rich ones, not me.”
I mean, never mind the fact that earlier in the day my friend had to decide which of their two vehicles he would drive to the party. Forget the part that we were enjoying fine food and drink in a comfortable, well-decorated home. Disregard that he had enough money to care for his health needs, was making plans to retire in the near future, and had even saved a bit of money for his child’s college education… in his mind, he was not rich. The “other guys” down the street were the rich ones.
We experience this often in our thinking. We usually compare our financial circumstance to those who have more. And as a result, we rarely consider ourselves wealthy. The world is big and there is always somebody with more. No wonder 55% of millionaires do not consider themselves rich.
We see this also on a macro-level in our society. In our country and around the world, “The 1%” has become a derogatory term describing the wealthiest among us. Subtly, it is used to designate the apparent, insatiable greed of those who already own enough. We use it in conversation to draw a sharp contrast between those who are “rich,” and those of us who most assuredly, are not.
Again, because we compare our financial circumstance to those who have more, we refuse to consider ourselves among the rich. But something interesting happens when we begin to expand our comparisons.
Globally, an estimated 6 billion people live on less than $13,000/year. And nearly half the world’s population, 2.8 billion people, survive on less than $2 a day.
According to the non-profit group Giving What We Can, an annual income of $40,000 places you in the richest 2.0% of the world’s population. An income of $25,000/year puts you in the top 3%.
Even a minimum wage job ($7.25 an hour, 40 hours a week, 52 weeks a year) puts you in the top 8% of all people on the planet in terms of income. Adjusting for actual purchasing power makes little difference in the percentages.
In other words, we are the rich ones. When we begin to expand our worldview beyond those who only have more than us, we quickly discover we are already among the wealthiest in the world today. And in most cases, we are the 1%, globally speaking.
We are already wealthy. And this should change entirely the way we live our lives. (tweet that)
This realization invites us to pursue happiness elsewhere. If I already exist in the top 2% of wage-earners in the world, is reaching the top 1.8% really going to increase my happiness index significantly? Maybe having more money is not the answer, maybe I will need to look elsewhere.
It requires us to rethink contentment. The level of income in our countries is just one economic measurement. In addition to income, average home sizes have nearly tripled in the past 50 years, televisions outnumber people in the average American home, and the average British 10-year-old owns 238 toys but plays with just 12 daily. Despite our material accumulation, discontent fuels more desire, more shopping, and more debt. If all that we already own has not satisfied the deepest longings of our heart by now, they probably never will.
Our wealth calls us to embrace a higher standard. Most of the “us vs. them” conversations concerning wealth focus on how those with more should spend their money differently—whether by governmental authority or by personal initiative. But, if “we” became “they,” shouldn’t we try to live by the same standard we called them to uphold?
It opens the opportunity for greater generosity in our lives today. The thinking runs deep in many of our hearts: Once I make more money, I will become more generous. But the research indicates otherwise. We are already wealthy—most of us ranking in the top 2% globally. The time for generosity is now. And maybe the greatest benefit of generosity is the realization that we already have enough.
Are you the wealthiest human being in the world? Absolutely not (I mean, unless you are reading Bill). But that doesn’t mean “rich” is some far off concept you will never attain. In reality, most of us have already achieved it. And this ought to change both how we live and define wealth.
Great perspective, as always Joshua. The middle class may be shrinking, but that doesn’t mean all are moving to a lower class. Our capitalist country allows many to move from the middle class upwards. I have so much respect for entrepreneurs, as I’ve seen first hand how hard the work is and how much people risk and how much investment they make to build a successful business. It always bothers me when someone seems jealous that they are now making more money…they have probably sacrificed a lot to get to this place. Starting a business is an option for almost all, if they are willing to sacrifice, find investors, etc.
Thank you so much for sharing these thoughts. I am very happy to have stumbled upon this today. It has also motivated me to get more involved with “Giving what we can”.
Needed to read this, today, so I’m glad it came up on Facebook. Thanks, Joshua, for the reminder that we are already RICH! God never fails us.
Americans have always had a disfunctional view of wealth. In our literature, the wealthy are always flawed and the poor are good. It is as if despite our striving to be rich, we have to believe that becoming rich we also become evil somehow. All rich people are not bad and all poor people are not noble. If we could just accept ourselves for who we are, it would all get better.
Thank you, Joshua! I have been reading your blogs the time I have decided to practice a minimalistic lifestyle. You have become one of my inspirations to live intentionally. Now I am more than ready to face the new year with a changed and positive perspective. May you keep on writing and inspiring others!
Much love from the Philippines!!!
Dear Joshua,
The more I read your blog posts the more amazed I am by how much it resembles Islamic teachings.(Minimalism is closely related to the concept of zuhd in Islam.)
May Allah love you and guide you to what He loves.
Sincerely,
Muslim Me.
Thanks so much.
Hello. This article came up in my Facebook memories today and I read it again, and I agree with it again, but I did notice a statistic that doesn’t seem right. As follows:
“Globally, an estimated 6 billion people live on less than $13,000/year. And nearly half the world’s population, 2.8 billion people, survive on less than $2 a day.”
If half the world’s population is 2.8 billion, then wouldn’t the total world’s population be 5.6 billion? Yet the previous figure says “…6 billion people live on less than $13,000/year.” If the world’s total population is 5.6 billion, how can more than that live on less than $13,000/year?” Paragraph should read this way (using data from date of article):
“Out of the 7.3 billion people on earth, 6 billion live on less than $13,000/year, and nearly half of those (2.8 billion) live on less than 2 dollars per day.”
Does not detract from the meaning of the article, but I was confused for a minute. Thanks.
All I know, is that I work 2 jobs
And I manage to pay all my bills, but still never have enough for any thing else. Just an exsistance.
I’d love to do so much, and my lack of funds hinders me.
I’d even really like to be upper middle class, let alone rich. No matter what anyone says, I want more. Period.
I wonder if the middle class is shrinking because they have stopped becoming accumulators of wealth and only consumers of their own wealth .
It doesn’t matter how prosperous your income if you don’t live below your means you can’t accumulate wealth .
I suspect the middle class has lost its industriousness driven by a Protestant work ethic and it’s a minimalist driven by being stewards of God, and that has resulted in the middle class shrinking?
That would be a good masters thesis for a Christian student, I suspect that it is true but it would be interesting to see if my suspicions were supported by the facts.
The middle class is shrinking because of wage stagnation since about 1980. Real wages for the middle and working class have stayed pretty much the same for the last 30 years while the incomes and wealth of the richest Americans have grown about 300%.
Basically, the steady increase in GDP, which the American worker has produced, has been taken by the wealthy, instead of shared with workers the way they were 50 years ago, when Union membership was high and there were no such things as At-Will Employment laws.
Most of the gains that the post-war worker made have been lost, and we are now back to Gilded Age levels of wealth inequality, and our government is basically an Oligarchy.
Yes, compared to much of the rest of the world, Americans are wealthy.
It’s also true that compared to the rest of the world, women have a lot of rights and legal protections.
Does that mean that women shouldn’t complain so much about pay discrimination, sexual harassment, and sex discrimination of all kinds? Should women just give up working for justice *here* because women *elsewhere* have it worse?
Wow! Wonderful insight.
There is a Jewish saying that he who is wealthy is happy with his lot.
Let us be content with our lot. The rich will never share their wealth, and I mean those with so much that they don’t know what to do with it. And those that are very comfortable and can afford to do much are rich enough that they often are the ones that complain the most!
Just back from our first ever Sturgis Motorcycle Rally, in Sturgis, SD. Incidentally, it was the 75th anniversary for this rally. We have a Victory trike, which we hauled in our friend’s toy hauler, along with his cycle. We camped in the famous Buffalo Chip campground, having made our reservations well over a year ago. We stayed ten days, the FIRST full vacation Bob and I have ever taken (been too busy raising and home educating five children).
We went on the cheap, so to speak, but still spent a lot of cash. What astounded me was the amount of revenue represented by the whole event…campers, toy haulers, tents, cycles, trikes, 4-wheelers, trucks and cars, concerts, food stuff, souvenirs, fuel, etc. etc. etc..It was an unbelievable gathering of wealth.
When it was over, campers just left tents, furniture, coolers etc. etc. that they didn’t want to haul home. I can’t imagine what THAT total of “waste” was.
Oh, it was the experience of a lifetime but certainly rubbed wrong on our minimalist tendencies. Truly a decadent representation of wealth in America. This article really brings out the truth about our country and our lives and the Sturgis Rally really puts an exclamation point to your thoughts. I am going to share it on my FB page and hope some of my friends will read it and learn as I did.
Thanks so much for your perspective.
Fascinating perspective. Thanks for sharing.
Just an observation…….Someone with great wealth that buys a mega yacht…. most people would say…….this man has more than he should…..why not give the money that would have bought this yacht and redistribute it to many to feed them and give them toilets or whatever………but most people do not realize this mans wealth and ability to buy a yacht supplies so many jobs to the masses…..think about it…….to build that yacht and maintain it requires an extensive amount of people power which provides good livings for many many individuals…..yes, some may only make $25,000.00 or $40,000…….no comparison with the millions or billions this man makes…….but it is still a salary that ranks in the top 1,2 or 3 percent of the world……………….If it were not for this mans wealth and ability and want of product many many people would be out of jobs……….. should we be grateful to this man not hateful because he has so much more……………just an observation
I agree with you, Cindi. It is sharing and generous when wealthy people buy products that put people to work . Construction and maintenance of items like mega or not yachts, aircraft, mega mansions, vacation homes or even construction of a bottle of wine spread the wealth. Even then after the initial purchase all that personal property is heavily taxed and it will be taxed from own to next owner until the item becomes scrap. Many people are employed in continued maintenance and upkeep of the properties. I think wealthies should be encouraged to spend and flaunt their hard work and good fortune not hide it. Spend it and working people get a chance to share the wealth.
Hi! I have had the same thoughts as you. Apparently in the book crazy Rich Asians that same scenarios brought up. A couple of artists are paid a quarter million dollars each to paint a mural. One of them uses the money to pay off their home. The other artist uses the money to send their children to college. However there is this to be said, in total both those artists received half $1 million. Half $1 million spent another way could save a lot of lives and feed a lot of hungry people. So what is the most moral use of the money?
I am in total agreement that we are blessed and that always looking at what we don’t have is harmful. The thing I do disagree with is comparing a minimum wage earner in the USA to people from other countries. The cost of living in other countries is much lower. An engineer in India earning $12,000 a year could live quite comfortably but would be hard-pressed to live on that amount of money in the USA
I compare my life to life throughout history and revel in the comfort and ease I enjoy. When Justin Bieber complained about difficulties in his life people were scathing in their comments, as if having money means you’re not going to have difficulties. I can Invision many potential problems coming from having fame and fortune.
Thank you for this Joshua! Such a good perspective on things as usual! I live in London, UK, where things are very expensive and a lot pricier than the USA. However, whilst I have very little disposable income left after having paid for bills, mortgage, travel and food, I still feel I am very rich! I have a roof over my head and a beautiful husband that loves me very much. I really do feel I’m rich and that I have so much just from living in a safe, developed country with enough money to meet my needs and some wants! Your article today has enforced this, thank you very much! :-)
I am probably in the lowest 1% of Americans in terms of annual income and “net worth”; but it doesn’t matter. Not quite “the moneyless man” but virtually so, and it’s beautiful.
I am ecologically, industriously, and spiritually wealthy because I have a relationship to the natural world and self-employment work I’m the best at, and volunteer work I’m passionate about.
Joshua Becker, you’re one of my sources of inspiration in living a minimalist lifestyle (although I was already practicing it before I knew a name for it).
I’ve been gasoline free for over three years, and live in a simple but adequate mobile dwelling on a rented lot. Reducing my expenses rather than struggling to increase my income dramatically relieves stress and gives me time to devote to worthwhile volunteer work.
I was telling a friend yesterday that I have my own little paradise to be grateful for, alongside a beautiful river full of wildlife.
However, just hours later, I had a run-in with a drunken neighbor who is probably stressed out of his mind because of disposable consumer culture, and the social pressures it puts on him. Wasted lives are so sad. He probably earns many times what I earn, but I feel sorry for him.
And now he’s threatening to get me in trouble with county government based on an obscure ordinance against minimalist living which I didn’t even know existed. In some places it’s illegal to live in simple mobile dwellings–likely ordinances written by people obsessed with a skewed definition of the quality of life.
I should be able to pay my lot rent, be the quiet justice-minded environmentally-aware neighbor that I am, and be left alone. But now my future is uncertain. If a county agent knocks on my door, what will I do?
I’d like to hear from anyone who has ideas or experience about how to live simply (including mobile housing choices on rented land) despite constraining local ordinances or state laws.
Perhaps there are states or counties less obsessed with “raising” the lifestyle of their citizens by forcing us back into the disposable consumer culture via the commercialized housing market.
If you have ideas or experience that might help, please contact me through my website, http://wakingplanet.net Thank you.
Excellent article! We had a GOB of money just a few short years ago. We were definitely in the top 1% globally. Through just two investments, which we thought at the time were the right thing to do, we lost both of them almost overnight, in addition to job changes. We found ourselves below, even, square one, before we had the money, BUT our perspective and attitudes toward money didn’t follow us. We continued to live as if we still had GOBS of money and the ability to create it. We now find ourselves having to dig out of a pit of our own making. We can’t forget that with gobs of money comes GOBS of responsibility. No matter how much money we have, we are still required to exercise stewardship over it. Now, we start again to regain our wealth, especially our emotional wealth, hopefully wiser, with a new-found and proper perspective of what true wealth is. The interesting thing is, even though we are on a down turn, we are still within the top 1% globally! What an attitude adjustment!! And I can truly say that I’m grateful for it.
Thanks a lot for this! You have just confirmed something I feel but never succeeded to put in words. This will change my perception of many things i n the future.
Very timely post – such a gap in incomes – especially in this country! Thanks for the informative post!
Great Article. I would like to point a quote by Mahatma Gandhi which I think is very relevant in this context. He once said –
“I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away.”
Definitely a good perspective on the fact that most of us are far richer and more fortunate than we tend to recognize. If we are always looking forward to more, more, more we will never feel happy or satisfied regardless of how much we make or how much money we have stored away. As the saying goes, the trouble with winning the rat race is that you are still a rat. Far better to realize how rich we are in this minute and with gratitude, count all the benefits in our existing lives.
I always ask “how much money does one person really need”? Once you pass meeting basic needs like clothing, shelter, food, safety, etc… more money usually does not mean more happiness, especially if it takes over your life to the point of reduced health and happiness. I also find it interesting that 2/3rds of Americans are overweight, in one of the richest countries in the world. Crazy.
⅔ of americans are not overweight because they have too much money; the less money americans have, the more likely they are to be fat. that’s because the most fattening and toxic food is the cheapest, so the poorest people are the fattest. even the people i see waiting in lines in soup kitchens or food pantries (people who go hungry, or would if they weren’t being given food) are fatter than higher-income people. excess income isn’t the problem.
But being rich is all relative, I mean it’s different in different countries. I think the thing that matters is standard of living.
E.g: In my country (Iran) we can live super comfortablely with just 5000 bucks a month whereas in USA you may need 15000 bucks a month to live that way. However, our salaries compared to USA citizens ones are lower.
I couldn’t love this any more. Thank you, for being a voice of sanity in an insane world.
I’ve never thought about this before but you are so spot on. I can’t believe I’ve never thought of it this way. Money is something I work hard for, but I try hard to not make it something that I put a lot of importance on (even though I run a frugal blog it seems a little silly). But I save what I can, buy what I need, and make sure that I have enough to be able to enjoy life. I’ve never considered myself rich – bit I think now I do. I’m able to enjoy life with what I have, and like you said that’s more than a lot of people can say. I’m rich.
contentment can disappear in a flash. my surroundings blur the amazing wealth that God has blessed me with. thanks for the reminder to be content in plenty and in want. discontentment brews up such ugly bitter sides on myself that i hate. i tend to drop out of competition so that i stop competing with others around me. i bite my tongue when i feel like complaining, until i can rephrase it and truly believe that it’s a positive thing. of course we’re blessed with many many things in the US, and that’s what makes reaching out to others that much more important. i find contentment easier when i’m outside myself and not thinking about and worrying about all my stuff. thanks for sharing. i love your blog. it’s both beautiful and insightful. joe
This is so true. Most people, particularly in our country, have no idea how blessed we truly are. I have only recently begun to realize that it’s not more money that I need to make my happy, but more gratitude. I wish I had known that years ago, but at least I know it now, and can teach my daughter.
Like your comment.
It is our responsability to raise our children from a very young age to be generous, selfishless and not to see making money as the only way to be happy on this Earth… Teach them careness and sharing .!
This is the article I needed to read-brilliant-to put into perspective how much we have in comparison to the rest of the world! Thank you, thank you, thank you!!!
Thank you for a real eye opener.
Wealth and money are not evil but the LOVE of money is. We do not have wealth to keep it, but to share with others. No manner how rich or poor we are, at sometime in our life we will have the opportunity to give to others. How great it is to be a cheerful giver. We will learn how to live when we learn how to give out of our LOVE for all other people.
Great article. I live in South Africa and I am one if the rich ones. Many of my friends don’t think we are rich but I work in a very (and I mean very) disadvantaged community running a non profit. Even when my husband and I were younger and earned less I knew I was one of the rich ones. Seeing severe poverty every day makes you realize just how privileged you are. You never take things like a flushing toilet or house with more than one room for granted. Plumbing in my home, electricity in my home, a bed for each person, a toothbrush, more than one pair of shoes, books… Yes, I’m one of the rich ones. Thanks for challenging people! We need to recognize how privileged we are because it will change they way we live, and most importantly, it will change the way we give!
This post comes as a pleasant surprise to me- I see that I am in the top 3% atleast! It reminds me of the law of diminishing marginal utility. I find that more than anything else, it applies to the satisfaction/contentment from acquiring more wealth. After one reaches the point where all of one’s necessities and comforts are taken care of…adding luxuries to one’s life/lifestyle makes marginal difference to the level of contentment. I think that its fair to say that economic or financial contentment is only a part of the overall well-being.
There’s a brilliance in this article, and it’s the focus on perspective. Frequently, it seems like people become inured by creature comforts, and lose sight of how others live.
Joshua, you’ve melded the emotional reason I wish I had about the solutions with a very real, eye-opening acknowledgement of the financial problems we’re in.
Nonetheless, it’s important to think about that number. About 80 people have the bottom 50%’s wealth. That’s an inequality that goes beyond perspective. The numbers are staggering and astounding. The end result is destitution versus opulence — toilet-less versus private jet ownership.
At some point we have to say enough is enough. But heck if I know when that’ll be. :)
Thank you for that. When we leave this Earth, we cannot take anything with us except our soul. The Bible talks so much about money and I can see why. It can cause division. If we are generous with little, we can be generous with much. God bless you on this journey….a good reminder to be grateful for the things that really matter.
A very important post. Sometimes, i’m really frightened of what will happen in the future all over the world when the wealth gap increases. The same problem is now more and more visible in Europe. Something is wrong with distribution. I hope it won’t lead to some unrest.
When it comes to comparing – there are countries where this is not such a big problem (look at Scandinavian states with their social solutions), but their mentality is much different from the American’s one.
Regards!
We can not compare living standards with the US and Scandinavia or even Europe over all. It is a problem of resources, Scandinavia has a lot less people than the US or ‘mainland’ Europe, distributed over more possible acres.
Albeit the mentality is different, the resources make a huge difference.
Are you suggesting that the social solutions in Scandinavia have been possible because of low population? According to my knowledge, the Scandinavian mentality and the law are main factors. Norway has an additional one – natural resources. The Scandinavian model would be very hard to be implemented in the USA because of American tradition and mentality, not the population size. Maybe i just didn’t get your point enough (i’m not a native English speaker).
So true. I am keeping this to re-read everytime I “stop seeing the light.”
This is so absolutely spot on. Anyone with the computer access to read this is automatically so advantaged compared to so many others in the world. Our feelings of lack and wanting may feel quite real to us, but with a slight adjustment in perspective, it’s possible to see ourselves in the context of a bigger reality. Thank you.
“All I ask is the chance to prove that money can’t make me happy”, Spike Milligan
“I wish everyone would get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.” Jim Carrey
Money is never going to make you happy unless you have given it away. If you are generous and you will give away money, making an other person happy or you helped some one, YOU will feel more happy at the end of the day. But if you spend it on yourself, at the end of the day you don’t feel HAPPIER. There is a great TEDxTalk about this what did inspire me: http://on.ted.com/MNorton. Take a look! And what about… give it a try…!
Ever thought about when u book a holiday for yourself to bless someone with a vacation that never had the chance to have one? Or about working less and have more time with those people in your life that you care about! It is a very interesting road that I am on too with questions but also inspiration!! Have a great week!!