Several years ago, the “Occupy” movement spotlighted income inequality around the globe. While the protestors have since retreated from Wall Street and other economic power centers, this pressing issue still lingers on. In fact, economic disparity is on the climb, with 1% of the world’s population currently holding over 47% of the global wealth, according to Credit Suisse’s 2018 Global Wealth Report.
Interestingly, Americans do not have to be extremely wealthy, in order to claim a spot among that 1%. According to the Global Rich List, a $32,400 annual income will easily place American school teachers, registered nurses, and other modestly-salaried individuals, among the global 1% of earners.
Contrarily, the top 1% of wage earners strictly in the United States must pull in at least $421,926 to make the cut, according to a 2018 report by the Economic Policy Institute.
- An income of $32,400 per year would allow someone to be among the top 1% of income earners in the world.
- To reach the top 1% worldwide in terms of wealth—not just income but all you own—you’d have to possess $770,000 in net worth.
- The bar to enter the top 1% wouldn't be this low were it not for the extreme poverty that so much of the globe endures.
Ranking According to Wealth
One must have upwards of $700,000 in combined income, investments and personal assets, to hit the top 1% of the world’s wealthiest individuals.
While Americans rank fourth in household wages worldwide, they rank 25th in median wealth, according to the Credit Suisse Global Wealth Databook. This disparity is largely due to the fact that Americans rely on credit more than individuals from other countries, as evidenced by the fact that the average U.S. citizen harbors more than $60,000 in debt.
Source: Washington Post chart
According to economist Edward N. Wolff, Federal Reserve data suggests that the top 1% of American households claim more wealth than the entire bottom 90% of households combined. Even so, many middle-class Americans who have spent years paying down their mortgages and saving for retirement belong to the upper echelon of the world's wealthy.
The Flip Side: True Poverty
Poverty is the chief impediment blocking most people from achieving the top 1% of global wealth. Case in point: in India, the typical adult claims just $7,024 in assets, while the average African adult citizen holds only $4,138 in total wealth. This is radically different than the average American and European adult, who respectively possesses $403,974 and $144,903 in wealth.
In short, the exclusive club we refer to as the “top 1%” in global income includes millions of Americans. What does that tell us? It's something we should constantly bear in mind: The citizens of developed countries tend to be far more affluent than most people on earth.