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124 pointsmacalicious52 comments

This is an interesting idea, but the numbers are bogus. It says 2% of the world (130M people) makes more than $25,000. This is, however, the median American personal income, so we know that at least 150M Americans make at least that much, plus all the people who do so elsewhere (probably at least another 150M, counting UK, Germany, France, Japan, etc, all the wealthier countries).

I don't think all Americans are in work ...

edit: Brief searching gives around 135 million Americans in work (this number maybe excluding farm work).

That's for everyone, not just workers. The figure for Americans who work with some non-zero salary is $29,000.

Since we've established that less than half of the population are in work, it follows that the median for everyone is 0...

(For better statistics see gapminder.org, it's quite fascinating)

Cool site; thanks for the link.

For all of us on mobile browsers: http://www.gapminder.org

Of course it's more than that, EU's average GDP per capita is 70% of that of the USA, population is over 150% of U.S., and income is more evenly distributed down here so losers are better off than in USA. And there is also Japan where the vast majority of 120+mm population get way more.

I think that's the median gross income of "workers" - people of working age, in the labour market.

You need to subtract your taxes from that, and factor in all of the people who don't count as "workers".

Too bad this is broken...

It does not accept negative wealth (well... I own about 2000 USD in personal objects, have no investments, and still owe about 10k USD in student loans...)

If you input a negative number, it assumes it is positive, you can even try stripping the minus (or adding a minus) and clicking the button again, it won't even calculate again and will assume it is the same number.

I feel conflicted about donating to charity, Kiva(.org) is my money-for-good vehicle of choice but sometimes it feels as if my money could be better spent donating to charities that help people that can't afford to eat, eat. Long term spending of money to help people better themselves and those around them is the more sustainable model but short term helping people that are starving have access to life essentials has a greater impact and is more compassionate. If only it was simple as "I have $xxx, how can I have the greatest positive impact?".

The Robin Hood Foundation, a charity which aims to "find, fund and partner with programs that have proven they are an effective remedy to poverty" [1] in New York City, has built robust metrics, at least on par with the Bill & Melinda Gates and Bloomberg Foundations. They work rigorously to identify where their dollars "have the greatest positive impact". More on Robin Hood's metrics: https://www.robinhood.org/metrics.

Disclaimer: I donate to the Robin Hood Foundation

[1] https://www.robinhood.org/about

That's something I've pressed for here a lot at Kiva, showing how positive your impact is. Last year, we started rating our partners on "catalytic"-ness, which is somewhat of a proxy for impact, and now 33% of our loans are rated highly catalytic. There's some studies which have shown impact both of microfinance in general and some that include our specific partners, but in general not nearly enough studies. And I'm sure with enough data, we'd find that microloans can have one of the greatest impacts, but that there are certainly situations where charitable giving can be even more impactful under the right circumstances. The problem is studies are hard to do right and expensive, and thus it's hard to get data on what is most impactful. From an engineering perspective, I'd love to solve this problem, but it seems to be one of those problems that requires more of an academic solution.

All I have to say is: thank you. Thank you to every single person involved with Kiva in any way. Every month I have an auto-deposit into my Kiva account, and I'm always excited to jump in and distribute the funds.

The team I'm in (http://www.kiva.org/team/nerdfighters) is open to anyone and has themes where each month we fund women, people from specific nations, etc and work together to make sure that the recipients' loans are filled. It's both fun and helps decrease world suck.

Keep up the good work -- to you and the rest of the team at Kiva. You rock.

Nerdfighters are awesome, thanks for being a part! I actually built that auto-deposit feature during a 3 day all-nighter a while back, I couldn't believe we hadn't built it yet so I did it during one of our innovation iterations :)

Part of the nuance of the issue is the difference between "give a man a fish" versus "teach a man to fish and he eats for a lifetime". There is a moral dilemma between spending money now to feed 100 people versus teaching one person to fish for a lifetime. That is a tough dilemma to solve. But different charities approach this in different ways.

The philosophy behind Kiva is to help people build sustainable businesses in poorer countries which have semi-functioning states (say poorer Latin American countries prone to dictatorships but still have some notion of property rights and trials for murders). This has the potential to bring entire communities to a more well-off state. Is it a good use of money? Undoubtedly. Are you better off giving that money to better charities that target people with more acute needs? Probably.

Here's another example: you might have seen criticism of the Bill and Melinda Gates Foundation for spending lots of money on eradicating polio. The argument is that instead of spending upwards of $1000 a head on eradicating Polio (cost divided by number of annual polio deaths), they could spend that at $10 a head on reducing malaria deaths. The counter argument is that _eradication_ is a huge win because once you've eradicated polio you can stop all future payments on Polio containment (which is in the billions of dollars annually) because you've permanently solved the problem, for present and future poor people. It turns out that the net present value of all those future payments equaling zero (just as today we spend zero dollars on small pox containment and treatment and vaccination now that we've eradicated it) makes it worth it to actually spend a disproportionate amount of money on polio vaccines on the ground (as the Gates foundation is doing), even if the marginal dollar saves less lives today than if we put it into malaria vaccines.

If you're interested in this line of work, the Bill and Melinda Gates Foundation is probably one of the best charities out there, since they actually grapple with these questions. But they're not actually capital starved (they're spending money as fast as they can). To answer that meta-question, you should look at GiveWell, which is probably the best meta-charity (they actually evaluate charities, and also factor in things like scalability, so they rank charities but also state how much money they think that charity needs before your marginal dollar should be allocated to the next one on the list since the first one will have enough money to accomplish their goals). They also look at how well run the charities are at actually accomplishing what they want to accomplish, etc.

In short, if you want to do the most good in a utilitarian sense, you can't do any better than going to GiveWell and donating to charities as per their recommendation. Honestly, if you needed to calculate a joint probability function over total human utility, and wanted to target your dollars at maximizing that function, Holden Karnofsky (the guy at the head of GiveWell) is exactly the person you should be asking.

I agree with you that the Bill and Melinda Gates foundation is one of the best charities out there however I'm stunned that they do not (openly) accept donations:

Q. Does the foundation accept donations? A. From time to time, people generously offer to contribute money to the foundation. We prefer that people give directly to our grantee organizations rather than to the foundation if they want to help advance the causes we’re passionate about.

Source: http://www.gatesfoundation.org/Who-We-Are/General-Informatio...

I suppose it's a tax management tool for the Gates, besides being an excellent charity. I don't mean to take away at all from the good they do, but why else wouldn't they accept donations except to not muddy the tax waters?

Because then people will use the "name that gets associated with Bill Gates upon donating", to further their own cause and popularity. Besides, they are rich enough to sustain their charity's causes, I am pretty sure they know about budgeting.

I always seem to evaluate that training a new fisherperson returns longer lifetime value. One to the mysteries of my generation is how persistent poverty can be in places.

Do you know if the Gates foundation, Kiva or GiveWell have done any research into the effect of a Basic Income (i.e. giving everyone in a country a small amount of money with no strings attached)?

It kind of falls slightly outside the realm of charity, more a Government intervention, but it's also the kind of intervention that I'd expect these rational charities to be interested in.

edit: Looks like GiveWell are interested in the concept:

http://blog.givewell.org/2009/05/20/why-not-just-give-out-ca...

"Why do cash handouts seem to be so rare in the charity world? Perhaps it’s because extensive experience and study have shown this approach to be inferior to others. Or perhaps it has more to do with the fact that giving out cash fundamentally puts the people, rather than the charity, in control."

That's exactly the kind of harsh but almost certainly true commentary I'd expect from a true charity watchdog. My esteem for GiveWell has gone up a few notches as a result.

And one of their charities is a charitable version of the concept (though with major differences e.g. it's one-off, limited to the very poor etc.):

http://www.givewell.org/international/top-charities/give-dir...

I guess we can divide giving into three broad categories

1. Organizations that concentrate on infrastructure/research - building roads, schools etc

2. Immediate help - food, medical care etc (like Watsi)

3. Helping people help themselves - like what Kiva is doing

It would be nice to have some kind of model/formula that can help with lending, especially for small time donors/lenders.

Another Kiva fan here :)

Are there any think tanks that look into world issues as a whole and give recommendations (other than UN agencies)?

This is known as the efficient charity problem. GiveWell is the one of the few groups trying to solve it: http://www.givewell.org/

In my analysis of this "dilemma" I refer to this example: the man who stopped the desert http://blogs.worldwatch.org/nourishingtheplanet/the-man-who-...

The desert progress can be assimilate to poverty, something we beleive to be unstoppable. But the man above stopped the desert progress by planting little trees. In the long run it proved much more efficient than giving some water to the starving plants at the desert border. Kiva is like planting little trees.

On the other hand I also understand that some people want to contribute where urgent help is needed.

things like this rub me the wrong way. you cannot compare income levels between countries with vastly different costs of living.

sure, first world countries will have a higher standard of living overall, but putting $25/hr in US up against $0.08/hr in Ghana is a misleading comparison of purchasing power.

case in point: in Ghana you can probably buy a castle full of servants on 80 acres for $25/hr.

"For currency conversion we use Purchasing Power Parity Dollars (PPP$) in order to take into account the difference in cost of living between countries; PPP$ are also less susceptible to short term fluctuations."

im no economist, but i cant help but feel thereis a huge flaw with PPP comparisons between first and third world countries.

if someone made $0.08/hr in the US, they would starve. homeless people make a lot more than this in the states. but somehow, people manage to raise whole families on those wages in third world countries. what am i missing?

I think that's exactly what PPP is about, though: income is converted to how much you have the power to purchase, so it's designed specifically to equalize that comparison. Or maybe I'm misreading.

You're missing the forest for the trees. It's an awareness tool, not an economic analysis.

the tool does count trees though. i find it relevant to discuss whether it counts 1e2 trees or 1e6, or a seemingly unsurvivable wage with one that in reality sustains families.

this isn't really that true (and i say this as a brit living in chile, so have some experience). sure, some things are cheap. but if you're talking about the kind of wealth many people here have, you exhaust those pretty quickly. it's basically local produce and labour that's cheap. anything "interesting" - media, electronics, car, brand name clothes, travel, etc - is the same (or more expensive, since it's imported).

i'm not saying you need those things to survive. you can certainly survive in chile much cheaper than in the usa. but for a good quality of life (in the consumption sense - like, global top 1% or so, which i imagine many people here are) i would guess it's actually cheaper in the usa (although health care is cheaper here, but that's kind of a weird us outlier thing).

yes, thats almost certainly the case. but it's inappropriate to boil it down to $/hr. because you're not cognitively comparing living in the US for 0.08 vs 25 an hour.

but only for people poorer than you.

for rich people like us, the comparison works. for poorer people, they're poorer anyway. it doesn't change anything. you can't avoid the conclusion that you're still horrendously privileged (which i suspect is what you want to do, but maybe i am just a cynic).

i disagree. you cannot survive in the US on 0.08/hr. i think it would be most appropriate to establish a relative baseline at the lowest survivable wage in each country. and that includes raising kids.

i feel privilaged to have access to good health care, healthy food, clean water, relative freedom and an environment where i dont have to worry about surviving on a daily basis. having only these things, i could be just as happy without everything a high hourly wage affords me beyond this.

Great app. Too bad a 1 percenters like me can't calculate my apparent wealth however.

Income works fine, but when I put in the data for wealth (no house, minimalistic materials, and meagre bank accounts) it gives me the error code: "Are you sure about that?"... Apparently, you cannot hold less than $1,500CAD of wealth, nor can you be classed within the bottom 22%.

The income bottom limit is $400CAD, which is much better. It's kind of funny how the stats don't feel so guilty when entering the lower limits. For a $400CAD yearly income: " In 1 hour you make $0.21 Meanwhile, the average labourer in Indonesia makes just $0.50 in the same time. "

Honest question, if you earn so much (1% you claim) where does all your income go? You're supporting others? You're paying off student loans? Your rent is really really high?

Anyway. If you've no accumulated wealth just enter your income and then marvel at the disparity between you and the 99%.

He probably means the global 1% which is ~$30,000 per year, in a lot of first world places that is far from enough to build up wealth without behaving frugally.

Even when observing only the USA, a top 1% personal income starts at around $200K, which isn't unheard of for a developer position. A recent poll about age places the majority of HN readers early in their career where debt is usually high and assets have not had much time to accumulate, so a top 1% US income and no assets does not seem like an impossibility either.

Yep, same here. I live in Sydney AU and the app also put me in the top 1% richest people in the world by income.

When I did it by wealth, the result was: "Your personal wealth is equal to the combined wealth of 0 people in Myanmar." and "1% of your wealth could feed a family of four in Ethiopia for 0 months."

There's no doubt that we live way more comfortably than most people in Myanmar do but it's clear that being born with wealth to start with helps no matter where you live.

I have a slightly-lower-than-median wage in Aus and only $20k in assets (car, some furniture). This puts me at 0.9% for income, but 27% for wealth, which is quite a strange disparity - evidently there are a lot of people earning much less than me with much more in the way of assets.

While I am not financially astute, I'm also not terribly bad, throwing that money away on lottery tickets and whatnot. Buggered if I know how I manage to drop 26 percentage points - how are all those much poorer people managing to save so much more than me, especially considering that by the time you're out of the top 1%-by-income, you're below $30k.

You're not a 1%er if you have no assets.

I love it, what an effective message.

I think there is a bug in the form validation, if I put commas in my net worth, it gives me a completely different value than if I don't. Probably should intelligently strip out non numerals, or even reject non-numeral entries, since people of different nationalities use periods and commas differently.

Also, reading the methodology, very interesting, but I am intuiting it isn't so accurate. My net worth is higher vs average for U.S., and my income is lower vs average for U.S. but the site ranks me in the opposite direction when I change my entry values.

It doesn't seem to recognize negative numbers. So if you're like the 1 in 4 Americans who have zero or negative net worth, the "wealth" part of the app won't work.

* http://www.epi.org/press/news_from_epi_th_great_recession_ex...

I also noticed that. I'm hoping to get up to zero net worth in the next couple of years, though...

Jarring background. More jarring information.

Interesting fact: being a 1-percenter in the US ($370k in 2010) makes you a .02-percenter on the worldwide scale.

I love how they hid a currency conversion fallacy by putting example of can of cock instead of glass of water. This website will make a walmart worker feel super rich than a person working in similar large store in Ghana even if both have more or less same quality of life.

Interesting. There's one bug though, when you select another country like Colombia, for instance, you have to enter the value in its currency. When you do, in that case 1k usd is 2 Million, the calculation seems to convert that to millions of dollars. Its not entirely clear which money format you should use.

Interestingly, the "Maximum income" (USD/year) is 2,200,000,000 (2.2 billion). Specifying a yearly income of 2B/year, however, puts you at #1 according to this. Why 2.2B? Seems rather arbitrary.

Likely a 32bit int rounding issue? 2147483648

Ahh, that must be it. Strange they'd cap it at 2.2B instead of their actual MAX_INT equivalent.

i can't enter my debts. i can't have a negative home equity. you should be able to supply your debts on both the income and wealth pages.

Implying you're the target audience.. ;)

Adjust your income by subtracting the annual cost of servicing your debt and wealth by subtracting the present value of the debt.

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