ABSURD INEQUITY IS THREATENING U.S.
Have you ever tried visualizing America’s increasing concentration of wealth? Well, try this: Imagine the entire population lined up in order of wealth, measured by net worth. Bill Gates, the wealthiest American, would stand at the front of the line, and the poorest American at the back.
Now, imagine a gate at the front of the line. Finally, imagine that Americans walk through the gate, one by one, starting with Microsoft’s billionaire founder, until the collective wealth of those who have passed through totals $1 trillion.
How many people belong to this trillion-dollar club?
Right now, according to the latest magazine calculations, just 51 Americans.
Ralph Lauren, the clothing designer with a net worth of $7.7 billion, would be 54th in line. He’d be locked out.
A small crowd that couldn’t even fill a city bus controls $1 tril-
BOB LORD lion. Of course, this crowd would never set foot in a city bus. But I digress.
One trillion dollars represents 1.5 percent of the combined wealth of all Americans today. We know the rich are getting richer. To get a better sense of just how much things have changed, how about calculating the number of Americans who controlled the top 1.5 percent of our collective wealth a generation ago?
In 1982, Forbes compiled its list of the 400 wealthiest Americans for the first time. This 1.5 percent club was far less exclusive back then. Everyone on the list plus the next 1,100 richest Americans could pass through that imaginary gate, give or take a few magnates, before their collective wealth reached 1.5 percent of Americans’ total net worth.
Wait, what? The same share of our wealth that was held by the 1,500 wealthiest Americans 31 years ago is held by just 51 Americans today?
Yes, our wealth is 30 times more concentrated today than a generation ago.
Now fast-forward a generation into the future and assume our wealth-concentrating of the past 31 years continues at the same pace for the next 31 years. How many Americans would walk through that gate before the 1.5 percent club of 2044 stopped accepting members? In all likelihood, no more than 12.
In other words, the share of our wealth represented by $1 trillion today would be held in 2044 by a group small enough to sit around a dinner table. In the space of 62 years, the number of wealthy Americans needed to account for that share of our wealth will have been reduced by over 99 percent, from around 1,500 to 12. And the wealth of those dozen plutocrats in 2044 will total far more than $1 trillion.
A few of them likely will be worth more than $1 trillion each.
They’ll belong to a more extreme trillion-dollar club.
To put all this into perspective, envision a different 1.5 percent club. To form this club, let’s go back to our original line of Americans from wealthiest to poorest, but let’s place the gate at the back of the line instead, so that the poorest American walks through first.
In 1982, about 105 million Americans would have walked through the gate to fill this vast club. That’s 45 percent of the population collectively holding only 1.5 percent of our wealth.
You might think the share of wealth at the bottom could not get much smaller, but you would be wrong. By 2010, the most recent year with data available, that last 1.5 percent of our wealth — approximately $1 trillion — was spread over roughly 190 million people.
How can this be? Our measurement of wealth, net worth, is actually negative for those at the back of our imaginary line, because they owe more than they have.
We’ve reached the point where the bottom half of the population, collectively, is flat broke.
If current trends continue, the bottom 1.5 percent club of 2044 will include about two-thirds of the population.
There would be a quarter-billion Americans holding no more wealth, collectively, than our 12 lucky plutocrats.
It may sound absurd, but that’s the kind of extreme inequality in store for our country. Unless, of course, we reverse course and stop adopting economic and tax policies that are making the rich richer and the poor poorer.
Here’s hoping.