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?