Wealth inequality is greater than ever, and increasing at a rapid pace, and its is even worse than the growing income inequality. If this trend continues, this could trigger major societal changes, and in worst case scenarios, even violent revolutions. In a world where it is the most emotionalized society of all time, unfortunately feelings are not equal to facts. Let’s look at actual statistics and see what’s going on.
Despite the presence of many billionaires, 40% of the US population does not own property, and is expected to never own property in a lifetime. Meanwhile, corporations are now being up residential homes, further putting pressure on housing prices. It’s been estimated by CoreLogic and Pew Trust that US corporations already now own ¼ of all single-family homes. And this number is only rising. What’s that number going to be in 20 years? 45%? I am not sure why corporations are allowed to own commercial and residential properties now. I guess that is a question for Congress.
On the stock market, half of Americans own publicly traded stocks, but the top 1% own just over half of the entire US stock market. At the end of 2022, the US stock market was estimated to be worth $40 trillion USD. So, 1% of the population owning over $20 trillion USD. One can go outside and destroy a home, but one cannot just go and destroy the stock market, in some senses, an invisible force.
This leads to the 400 richest Americans own ~$3.2 trillion, which is the same as the entire bottom 60% of the US. 400 people having the same wealth as 200 million Americans. Think about that for a moment.
For reference as to just how much money $3.2 trillion USD is, this money could be used to save the world in the most basic sense:
-$200 billion to vaccinate every person on earth
-$100 billion to eradicate malaria
-$80 billion medical debt in the US
-$170 billion via $10k payments per person for the 10% of the US living in poverty
-$240 billion for the 1 billion people in the world who do not have access to consistent clean water
That’s $790 billion to solve some pretty good problems. And still with over $2.4 trillion USD left over.
Another twist is how companies are worth more than countries themselves. Right now Apple is worth more than $3 trillion USD as of April 2023. That puts it worth more than countries GDPs, including: Canada, Australia, Brazil, India, Russia, South Korea, Italy. In total, Apple is worth more than 186 countries GDP. There are only 195 countries in the world. If Apple would be a country, it’s value would be the 10th richest country.
The modern world, with stagnant wages since the 1980s, has now transformed into a situation where wealth is without workers, and workers is without wealth. The labor output, despite being an estimated ~60% more productive compared to the 1980s, wages on a gross nominal value have only gone up 17%. That doesn’t even account for inflation, which would mean that actual real wages have actually dropped. The average person in the US will make $1.7 million in their lifetime income wise. By contrast, Jeff Bezos has an estimated ~$185 billion USD in net worth. This means Jeff Bezos is 110,000 times wealthier than the average Americans entire lifetime of earnings, not accounting for inflation, taxes, living costs.
The projections are that the wealth gap will only worsen over time, not improve. That is, the gap will continue to widen further and further. The big question is, what will happen to society as a result? Will this be a good thing or a bad thing? Well, looking at history, once wealth inequality gets to such an extreme degree, societies become unstable and end up being upended, via conflict and revolution. In the 20th century Cuba had a revolution change led by Fidel Castro and Che Guevara to Communism after 5% of the people owned 95% of the wealth. Prior to that, in the 18th century the French revolution also occurred too, with robbing and attacking of the rich aristocrats. This due to the top 10% owning 90% of all wealth in France. In 2023, of all total wealth, in the US, the top 10% control 76% of all wealth. With this number steadily growing, it seems to me if the top 5–10% start to approach the 90% mark, that revolution may occur, if history were to repeat itself. Predicting the future is anyone’s guess, but the top 10% to own 90%, given the current trends of growing inequality, could happen in 10–30 years. It seems inevitable in the existing lifetime that some kind of major change will occur. Revolution may not be as easy as before, with the advances of technology so strong, civilians cannot just march in. Though this happened on Capitol Hill in the US in January 2021, no follow up occurred. Whether that is a temporary blip, or a precursor for more significance in society is anyone’s guess.
Disclaimer
This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.