Top% of U.S. Households Hold 15 Times More Wealth Than Bottom 50% Combined | Hacker News Reader

Top% of U.S. Households Hold 15 Times More Wealth Than Bottom 50% Combined

forbes.com

30 pointsvparikh37 comments

I wonder what the complete curve looks like. At some point I'd expect the wealth number to be zero (and then head negative). So if you had $1 to your name, you might be richer than the bottom 20% combined.

It's a survey, but according to GOBanking 69% of Americans do not have even a thousand dollars in savings[1] (Almost half of respondents — 45% — said they have $0 in a savings account. Another 24% said they have less than $1,000 in savings. From 829 random respondents)

[1] https://www.gobankingrates.com/saving-money/savings-advice/a...

At the same time what % of Americans have an iPhone? What % drive a car < 3 years old? What % have the latest $200 Nikes, $500 purses or $2K MacBooks?

There is certainly a problem with income inequality in the world, but it's hardly Elon Musk's fault that people that aren't making very much spend their money so poorly. There is a social stigma with appearing rich to your friends so you spend poorly...social media has made this so much worse in the last decade.

This problem extends to many different aspects of life...from taking out student loans to pay for a useless degree to letting people buy shitty food on food stamps. People could be doing a lot better for themselves, but it's rarely seen as a function of personal responsibility to do so (it's always society that has to change to help them).

This trope is always getting trotted out by fiscal conservatives without any actual evidence. It's an imaginative extension of the "being poor means you have poor character" trope.

Also, when it extends beyond actual luxuries to basics like having a refrigerator (yes, I've actually heard this one) or the classic "an HD TV" (when was the last time you saw a non-HD TV for sale?), or in this case an iPhone (smartphones are no longer optional luxuries, and a used iPhone is one of the better investments in that category), it suggests that poor people should be robots who totally forego the very most fundamental creature-comforts until they've managed to turn their world around completely. It's dehumanizing.

I don't know if it suggests that poorer people should be robots, but that they should take more care in their purchasing. TV's are absolutely not a necessity nor really a good use of your income in any form (though not really that expensive, what is expensive are subscription plans).

I think it's interesting to describe things like TV's as "very most fundamental creature comforts" when someone has less than 1000$ in savings. If you are that strapped for cash you should recognize that every dollar you do have is extremely valuable and should be used to put you in a better financial situation.

I don't agree with the idea that being poor means having poor character, it's often out of situational issues or ignorance, but the issue arises when we start to defend legitimate misuses of money and say "well people deserve to live comfortably"

You can easily get a medium-sized TV these days for $200. You need an internet connection for utilitarian purposes anyway, and with that you can watch a number of cheap or free streaming services, not to mention old-fashioned airwaves TV.

I would say that having a modicum of entertainment/escapism at the end of the day is a reasonably fundamental creature-comfort that we shouldn't be judging people for spending their limited money on.

You've repeated fundamental as if that makes it any more correct. There are also other, much cheaper and potentially more rewarding things such as reading, drawing, cooking (which helps save money too) that can take up your time and save your wallet.

I'm merely responding to the idea that somehow we have gotten it in our heads that we "need" to have some level of comfort which for most of human existence would be considered insane luxury. (I'm aware you called out people pointing out fridges are a luxury but it is indeed true and it's great that technology has made them so ubiquitous that our lives are that much better)

What I'm getting at is, having grown up very poor, put myself through college, coming out with no debt and creating an extremely sizeable nest egg for myself, all while forgoing basic "creature comforts" such as a TV, smart phone, even a nice bed (I found free mattresses on craigslist, which I still sleep on to this day), living in co-ops and other alternative forms of housing, I can't shake the feeling that we are in a sense enabling poor choices.

This is not to say my experience proves my point, but that I'm less sympathetic to claims of inequality when they are also followed up with notions that we should redistribute wealth in some way. The problems that exist are systemic in the legal-systems, tax-systems, and educations systems of the US, redistributing wealth seems like making some people bleed because others are also bleeding.

There is a material difference between a $1K smart phone and a $100 smart phone.

There is a material difference between shoes that cost $200 and shoes that cost $20.

These things add up and acting like they don't is just silly.

> There is a material difference

Of course there is. I'm saying poor people shouldn't be judged for buying the $100/$20 versions, and also that it's an unsubstantiated myth that they're broadly wasting money by buying the $1000/$200 versions.

The poster you’re replying to had a valid point about the meaning of this data—it’s not some trope or judgement. Calculating someone’s net worth in this way is not considering these things on which money is being spent. In the most non-judge mental way possible, I would love to see some deeper analysis here. Two different households could have the same income, but one could save more (at the expense of missing out on a lot of things that increase quality of life) and another could save less. I don’t at all think badly of the family who saves less, but it is a valid factor to consider in an objective analysis of income inequality’s effect on households.

I can't exactly exchange iphone for Healthcare.

I suspect that a lot of the financially awful decisions come from relationship troubles.

If you think your spouse will waste the money, you might try to spend it first. Of course, that is probably waste in your spouse's eyes, so your spouse is incentivized to spend the money first. That justifies your suspicion that the money would be wasted by your spouse if you didn't spend it first.

Especially after divorce, people can get into a bidding war for being the favorite parent. Christmas has just had a huge impact, but it goes on year round.

Somebody who is hopelessly behind on child support might not see any point in having assets that are easy to seize.

This is a survey of amounts in a savings account, which is not the same as savings. Right now, typical savings accounts are higher friction than checking accounts with no meaningful interest, while high-yield savings accounts are even higher friction (because typically not offered by banks with the same broad range of consumer services people look to for checking accounts) but with barely-meaningful interest. Savings accounts almost never make sense.

If you need the lack of friction of a demand deposit account, you probably want it all in checking, and for actual savings where you don't need frictionless access, you probably want it invested somewhere with returns better than a savings account.

The Fed site has a lot of charts for this. For example, top 1% of households owns 30% of wealth today, while the bottom 50% - only 2%. For liabilities, the chart is almost the reverse of this: top 1% owes 4%, while the bottom 50% owes 30%.

https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

There must be a similar chart for individuals somewhere.

Edit: Btw, in 2010, the bottom 50% owned the least share of wealth - only 0.4%. This is also when the Fed started to increase the M1 money supply at the rate never seen before.

It's hard to read a figure like this without instinctively attaching a biased narrative value to it. Whether you see it as a positive or negative. Is it just me? Or perhaps that's the point?

What's the positive case?

If you believe that supremacy is a good thing, this is absolutely wonderful news.

On Christmas Day, there was a bombing in Nashville, TN. I don’t think there was any positive narrative to that story. It was only negative.

Does it really matter if we instinctively attach a positive or negative bias to a piece of information?

Yup, that is the point.

Newspapers and media in general don't get read for their factual information, they get read/consumed for how they make you feel. This is excellent stuff - it makes rich people feel superior, poor people feel bad and people in the middle feel uneasy. Everyone gets an emotion from one headline, effective click generator this one!

Whether or not it's good for society longterm to have journalists publish 'your neighbour makes more money than you, your neighbour is better looking than you, your neighbour is smarter than you' is another matter. I think we all know the answer, and yet there isn't some benevolent billionaire who cares enough to fund his/her own media organization and ban this type of content on their platform.

According to the 20/80 rule, in a given group, the top 20% are responsible for 80% of whatever factor you’re studying, good or bad.

The classic example is in a sales group. The top 20% of salesmen bring in 80% of the business.

In customer support, the top 20% of customers take up 80% of a company’s time.

According to this article, the total wealth in this country is 112 trillion. If you applied the 20/80 rule to this figure, and then keep applying the 20/80 rule until you have 1% remaining, then the “natural” outcome should be that the top 1% control over 70 trillion in wealth. That’s twice as high as what we actually have.

Exactly. Also you have to remember that some people are older than others. If everyone properly planned for their own retirement, then 65-year-olds would own >80% of all assets in the country, even if everyone had the same earnings for their entire life. Then over the rest of their life they would sell off those assets to pay for their daily expenses and travel while retired. The buyers would all be young people saving up for retirement.

Wealth inequality is the least surprising thing ever. But most people don't ever do math, so it makes for good clickbait.

Many people don't ever have the opportunity or training to properly plan for retirement.

"The Millionaire Next Door" should be required reading in high school.

You write about a system that doesn't exist (everyone earning the same), then point out that wealth inequality is not surprising and that articles like this "makes for good clickbait", but what's your point?

Is it that we should simply ignore wealth inequality and the societal issues it generates?

The point is that wealth inequality would still exist, even if every person in the world earned the same amount in their lifetime. The equality of outcomes of giving everyone the same amount of money would not lead to the equality of outcomes of everyone having the same amount of wealth.

You can only get wealth equality by taking away wealth from everyone. That's not going to fix any "societal issues", it will simply cause more problems. See also all past attempts.

I don’t see your point at all - even if you were to control for any age of your choosing I’m sure you’d still see similar distributions.

Your last point also requires some evidence since it is extreme.

No one has at any point said that the goal is for everyone to have the same amount of wealth, so I'm not going to argue against, what's clearly a straw-man

For your last point I'll have to go with a "citation needed"

The Scandinavian countries and many other European countries in general, have a high level of wealth redistribution and have higher education levels, higher voter turnout, less crime, and higher standards of living than the US

The 80/20 "rule" is not indicative what should be the right distribution. Also, wealth concentration has worsened over time. So, there was a time when it wasn't this concentrated and without a somewhat more equitable distribution we will see societal problems. The 80/20 rule is just a heuristic and not meant to be a guide for how things should actually be.

I never said it should be used as a guide for how things should be. Merely pointing out that many systems naturally result in this type of distribution. We have to realize this is a natural outcome if we don't actively try to make things more equitable.

Not just people, but companies as well. For example, the top 10 largest publicly traded companies make up 30% of the total value of the S&P500.

I don't know why people keep bringing up the 20/80 rule as if it's some sort of cosmic law.

Suppose on some other planet with a civilization that evolved from something other than monkeys the "rule" is 100/100, meaning everyone contributes equally.

On that planet I guess you'd be arguing that there's something wrong with the world considering that the Top% of Borg Households Hold 15 times more wealth than the bottom 50%, but everything is supposed to follow the "100/100 rule."

the 20/80 rule is an observation that holds true in most cases. It's like Moore's law. You can't just deny it because you don't like the outcome.

Oh yeah, I can deny it. It do pseudoscience and bullshit with numbers slapped on.

and that’s on late stage capitalist feudalism periodt

"It is morally wrong to allow a sucker to keep his money" - W.C. Fields.

Combined bet worth are not indicator of unbalance in wealth ( i mean in quality of living and generally living easiness).. those kind of metrics are misleading when presented this way imho.. let me explain : Stock market now and meet worth to companies owner while they may benefit only marginally from those money.. If elon musk has net worth of 100b and for living use 1m\y is it different from a guy who earn 2m and use 2m\y to live ? Is musk worse for disparity of whealt ? And a man who earn 30k and use 10k to live ? Is him different from a guy who earn 10k and use 10k to live ? Yeah the first ok one may have more cash if something goes bad.. but theyr lifestyle may be the same ... I think that the difference should be calculated on what we spend not in net worth ... if I have 1 trilion$ and spend 0 and live like a homeless because I don't wond to spend those money but maybe because I don't need or can spend ..why should I been considered as society monster from those kind of statistics ?

Net worth over certain threshold is non sense imo , someone who own a company may be calculated was total company value net worth but probably have a quote normal life and his net worth is in the market\street creating jobs, plus having a 1m earning and 1m spending i could have net worth 0 , but i would me different from who have 300$ income year

An ultra rich doesn't abuse society until he spend his money for things useless to the society imho.. that's what should be tracked. How much wealth is wasted for a golden toilet .. not accumulated

Plus there should be other things factored in .. like the contribution to the society.. is worse a man with a net wealth of 1m which is an illegal drug leader than a 100m entrepreneur in a solar energy sector.. stats saying just a number like that may depict a worsening scenario while instead maybe is getting better.. incomplete view must always be taken with skepticism imo

I get confused, when I read the term "society monster", as I think it's a loaded term, that is not reflective of the language used in the article

Arguing for more wealth equality is not the same as saying "billionaires are monsters", but having a few people able to fund lobbying and influence political systems, simply because of their wealth, while a large part of the population are cut off from participating in the democratic process, because they do not have the resources for education and the stability to commit long-term to a cause, is in my opinion a death sentence to modern democracy

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