The Rich-Get-Richer Feed-Back Effect Is In Full Swing. CK Out The Numbers
In 2022 the average wealth of a person in the top 10% was 110 TIMES larger than the average wealth of all Americans in the bottom 50%
By David Grace (Amazon Page — David Grace Website)
I’ve written several times about how the feedback effect drives unchecked systems pear-shaped and then destroys them.
I’ve specifically referenced the problems caused by the uncontrolled rich-get-richer, poor-get-poorer feedback effect in these two columns:
With the
- decrease in the tax rates on high-income individuals,
- decrease in the taxed percentage of corporate income,
- elimination of inheritance taxes,
- massive increases in the cost of housing, medical care and education in relation to the almost static net income of the bottom half of the population,
- the failure of the minimum wage to keep pace with these basic costs,
- the increase in the percentage of jobs that require expensive training/education but without any way for talented poor people to afford that training
and other factors since the mid-sixties, the unchecked rich-get-richer, poor-get-poorer feedback effect has risen to massive proportions.
I found some figures in the Federal Reserve database of American wealth from 1989 to the present that illustrate this point.
Numbers Are In Constant Dollars Unaffected By Inflation
In order to make the numbers more understandable and keep the results in constant dollars unaffected by inflation, let’s pretend that the total population of the country over the entire period from 1989 through 2022 is 1,000 people and that the total wealth of the country over the entire period is $1,000.
The Increasing Percentage Of Wealth Of The Top 10%
With those simplified numbers we can compare the wealth of each member of the top 10% to
- (1) the wealth of each member of the remaining 90% and to
- (2) each member of the bottom 50%
over time and in constant dollars.
1989 — Top 10% vs. Other 90%
In 1989 $601 of the total wealth of $1,000 was owned by the 100 people in the top 10%. In 1989 each member of the top 10% therefore individually had $6.01.
In 1989 the remaining 90% of the population owned $399 of the country’s total wealth. Each member of the remaining 90% of the population therefore had $.443 or a bit more than forty-four cents.
$6.01 owned by each member of the top 10%. vs. 44.3 cents owned by every other American.
$6.01/$.443 = 13.57
The average wealth of a member of the top 10% was 13.57 times larger than the average wealth of all the people in the remaining 90% of the U.S. population.
1989 — Top 10% vs. Bottom 50%
In 1989 the top 10% of the population had $601 of the $1,000 in total wealth and the bottom 50% of the population had $36 of the country’s total wealth.
While the individual wealth of each member of the top 10% was $6.01, the individual wealth of each member of the bottom 50% was 7.2 cents ($.072)
$6.01/$.072 = 83.5.
In 1989 the average wealth of a member of the top 10% was 83.5 times larger than the average wealth of all the people in the bottom 50% of the U.S. population.
2009 — Top 10% vs. Other 90%
In 2009 $668 of the total wealth of $1,000 was owned by the 100 people in the top 10%. Each member of the top 10% had increased their individual wealth from $6.01 in 1989 to $6.68 in 2009.
In 2009 the remaining 90% of the population owned $332 of the total wealth of $1,000, and each member of the remaining 90% of the population had seen a decrease in their individual wealth from $.443 in 1989 to about $.369 or about thirty-seven cents in 2009.
While each member of the top 10% had seen their individual wealth increase from $6.01 in 1989 to $6.68 in 2009 in constant dollars each member of the bottom 90% had seen their individual wealth decrease from 44.3 cents in 1989 to 36.9 cents in 2009 in constant dollars.
$6.68/$.369 = 18.1. Between 1989 and 2009 the average wealth of a member of the top 10% increased from 13.57 times more wealth than the average wealth of a member of the remaining 90% of the U.S. population to 18.1 times more wealth than the average wealth of each member of the rest of the population.
18.1/13.57 = 133% increase in the relative wealth of the top 10% vs. the individual wealth of the members of rest of the country between 1989 and 2009.
2009 — Top 10% vs. Bottom 50%
In 2009 the top 10% of the population had $668 of the $1,000 in total wealth.
In 2009 the bottom 50% of the population had $8 of the country’s total wealth.
10% of the population had two-thirds of all the country’s wealth and half of the population had .8%, less than 1% of the country’s wealth.
10% — 2/3 rds of all the wealth. 50% — less than 1%.
While each member of the top 10% had $6.68 in individual wealth, each member of the bottom 50% had 1.6 cents ($.016) in individual wealth.
$6.68/$.016 = 417.5.
In 2009, the average wealth of a member of the top 10% had increased from 83.5 times more wealth than the average wealth for everyone in the remaining 50% of the U.S. population in 1989 to 417.5 times more wealth in 2009 than the average wealth of each member of the bottom 50% of the population.
417.5/83.5 = 500% increase in the relative wealth of the top 10% vs. the wealth of the bottom 50% of the U.S. population between 1989 and 2009.
2022 — Top 10% vs. Other 90% (Average of first three quarters of 2022)
In 2022 $684 of the total wealth of $1,000 was owned by the 100 people in the top 10%.
In 2022 the remaining 90% of the population owned $316 of the country’s entire wealth. Each member of the remaining 90% of the population was worth about $.351 or a bit more than thirty-five cents.
Each member of the top 10% had increased their individual wealth from $6.01 in 1989 to $6.84 in 2022.
Each member of the bottom 90% had seen their wealth decrease from 44.3 cents in 1989 to 35.1 cents in 2022.
$6.84/$.351 = 19.49.
In 2022 the average wealth of each member of the top 10% had increased from about 13.6 times more than the average wealth of each member of the remaining 90% of the U.S. population in 1989 to about 19.5 times more wealth in 2022 than the average for everybody else in the country.
19.49/13.57 = 144% increase in the relative wealth of a member of the top 10% vs. the average wealth of a citizen in the 90% rest of the U.S. population between 1989 and 2022.
2022 — Top 10% vs. Bottom 50%
In 2022 the top 10% of the population had $684 of the $1,000 in total wealth.
The bottom 50% of the population had $31.33 of the country’s total wealth.
10% had more than two-thirds of the country’s wealth and 50% had a bit more than 3% of the country’s wealth.
While each member of the top 10% had an individual wealth of $6.84, each member of the bottom 50% had an individual wealth of 6.23 cents ($.0623)
$6.84/$.0623 = 109.8.
In 1989 the average wealth of each member of the top 10% was about 83.5 times larger than the average wealth of each member of the bottom 50% of the U.S. population and by 2022 the average wealth of each member of the top 10% had so increased that ratio rose to approximately 110 times more wealth than the average member of the bottom 50% of the population.
109.8/83.5 = a 131.5% increase between 1989 and 2022 in the relative wealth of the top 10% vs. the average wealth of the members of the bottom 50% of the U.S. population.
1963 To 2016 — Top 10% Vs. Bottom 10%
The ratio of the wealth of the average member of top 10% of households in 2016 to the wealth of the average member of the bottom 10% of households in 2016 was 5 times greater than the ratio of the wealth of the average member of top 10% of households in 1963 to the average wealth of a member of the bottom 10% of households in 1963.
Put differently, the gap between the wealth of the 2016 90th percentile households and the wealth of the 2016 10th percentile households was 500% greater than the gap between the wealth of the 1963 90th percentile of households versus the wealth of the 1963 10th percentile households.
Summary
90%
In 1989 the average wealth of a member of the top 10% was about 13.6 times greater than the average wealth of the members of the remaining 90% of the American population.
In 2022 the wealth of the average member of the top 10% was about 19.5 times greater than the wealth of the average member of the entire rest of the American population.
Between 1989 and 2022 the ratio of the wealth of the average member of top 10% of the population to the wealth of the average member of rest of the entire population increased by about 144%
Bottom 50%
In 1989 the wealth of the average member of the top 10% was about 83.5 times greater than the average wealth of the members of the bottom 50% of the American population.
In 2022 the wealth of an average member of the top 10% was about 110 times greater than the average wealth of the members of the bottom 50% of the American population.
Between 1989 and 2022 the ratio of the wealth of the top 10% of the population to the wealth of the bottom 50% of the population increased by about 131%
The Rich Are Getting Much Richer And At The Same Time The Poor Are Getting Much Poorer
It’s very clear that in the period from the 1960s to the present the rich have gotten much richer as a percentage of the country’s total privately held wealth and the poor have gotten much poorer as a percentage of the country’s total privately held wealth and that the gap between the percentage of total wealth owned by the top 10% and the percentage of total wealth owned by the bottom 10% has hugely increased.
The concentration of wealth feed-back effect is in full swing.
At some point the bottom half of the country won’t take it anymore. You can only impoverish people so much before they decide to do something extreme and rich people will only have themselves to blame.
— David Grace (Amazon Page — David Grace Website)
