Some might wonder if income inequality is an issue in the United States. It depends on how you look at it, but I say no.
Since the financial collapse and the Occupy Wall Street movement, a great deal of attention has been placed on the 1 percent versus the 99.
In 2012, Forbes ran a piece detailing and examining this great divide. The top 1 percent control 43 percent of the wealth, own 50 percent of all stocks and bonds and earn a salary roughly 14 times higher — $717,000 compared to $51,000. They also have a net worth almost 70 times higher — they are worth $8.4 million on average.
According to the same article, this is the largest disparity America has experienced since the Great Depression.
These statistics are ?sobering, no doubt, and, if viewed alone, they would be unavoidably convincing that, yes, income inequality is an issue. But we shouldn’t look at it alone.
Let’s talk about poverty.
The U.S. Census Bureau Poverty Threshold for a single unrelated adult is $11,720.
Do the math. That is less than you would earn if you worked 40 hours a week for federal minimum wage. If you are a family of four, it rises to $23,550 — not a large sum by any means and still a far cry from the average income reported above at $51,000.
Now, what is the world’s poverty threshold? The World Bank defines the poverty classification, or threshold, as $1.25 (purchasing power parity) a day ($456.56 annually). That is about 32 times less than ours. The difference in income between the richest 1 percent and the average American wage earner is 14 times.
The difference between our poverty line and the world’s is 32 times. Sadly, it gets worse. Our poverty level of $11,720 is only 34 percent less than the average worldwide income. The world’s poverty level is 98 ?percent less.
All of these numbers have been adjusted for purchasing power parity. The cost of living has been removed from the equation. Now we have to wonder what the reality is. Half of the world’s richest people live in the U.S. Earning only $34,000 annually puts you in the richest 1 percent of the world — that’s $17,000 less than our average income.
You can make less than the average person in this country and still be one of the richest few on the entire planet.
There are 1.2 billion people that live under the worldwide poverty level, but only 47 million in the U.S. live under our poverty level. And that number would only shrink — my guess is to about 6 people — if we used the world’s standard.
This is a dire crisis that is a powerful blight for every global citizen. If we care at all about our world this is what we should care about.
Income inequality is an issue. It just isn’t between us and our 1-percenters. It’s between us and the rest of the world.
cgerst@indiana.edu
