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.
Jean says
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!!!
Ben says
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.
Lindsay says
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!
Vidya says
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.
Sam @ Frugaling.org says
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. :)
Tami l says
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.
Chris says
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!
Maggie says
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.
Chris says
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).
Crystal says
So true. I am keeping this to re-read everytime I “stop seeing the light.”
Lisa says
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.
Jerry says
“All I ask is the chance to prove that money can’t make me happy”, Spike Milligan
Thom says
“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
Hadassa says
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!!