Wealth distribution in the U.S.

Income inequality in the U.S. is not a new phenomena, nor is it a bad thing in and of itself. The productivity of the U.S. economy is based on the promise of financial rewards for innovation and some disparity is necessary in a capitalistic society. However, the the vast sums of money being accumulated by the wealthiest among us begs the question, how much is enough. Wealth inequality is the basis of a recent essay in Vanity Fair by Joseph E. Stiglitz. In the essay, he argues that the growing gap between the rich and the poor is bad for the country, and its continued growth will have negative consequences. To illustrate the extent of the inequality, Stiglitz points out that 1% of the total population of the US receive 25% of the country’s income and controls over 40% of the wealth.

These numbers can be difficult to put into any meaning full context. One way to try is to think about the implications on a per person basis*. Given that there are roughly 300 million people in the U.S. and the total wealth of the country is estimated to be around $55 trillion, there are about 3 million people in the U.S. today each of whom have $7.8 million at their disposal.

As striking at this number is, focusing on the very top does not fully illustrate patterns of wealth distribution. To extend the analysis we can compare the top 20% with everyone else. According to data from 2007, the top 1% controlled 42.7% of the nations wealth, the next 19% controlled a further 50.3%, leaving only 7% of the nations wealth in the hands of the bottom 80% of the population.

To visualize this, I’ve drawn a circle (black) that represents the countries total wealth:

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The 42.7% of the wealth controlled by the top 1% can then be pulled out from the total (red circle). Leaving 57.3% for the rest of the population (black circle):

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Filling the hole in the black circle shows that the bottom 99% of the country controls a little more that half the countries total wealth:

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The uneven distribution of wealth within the bottom 99% can be shown by pulling out the 50.3% of wealth controlled by the next 19% (green circle below):

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Filling in the hole reveals the relative amounts of wealth controlled by top 1% (red) next 19% (green) and bottom 80% (black) of the U.S. population:

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To put this on a more personal level, we can change the diagram to show resources controlled per capita based on the following assumptions:

  • 42.7% of the nations wealth is distributed among 3 million people
  • Another 50.3% of the nations wealth is distributed among 75 million people
  • The remaining 7% of the nations wealth is controlled by 240 million people.

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Of course, this is not the complete story. The averaged data used to generate these graphs obscures the uneven distribution of wealth within each group. The circle for someone like Bill Gates at the top of the top 1% would not fit on even the largest computer monitors, while the wealth controlled by most of the bottom 80% would not be visible at the scale used in these diagrams.

*The distribution of wealth in each group discussed above is not normally distributed. Therefore the averaging done in the post does not represent an accurate measure of the center of the data and averaging would not be appropriate for a formal analysis. the skewed distribution of wealth is why the census bureau reports medians and quintiles instead of averages. As long as these limitations are understood, the averaging done above is a useful (if inexact) way to visualize large patterns in U.S. wealth distribution.


Powers of 10

Like many, I am a huge fan of the powers of 10 short movie made by Charles and Ray Eames back it the late 1960’s.

I remember seeing at the National Air and Space Museum as a kid and being blown away by the amount of stuff both big and small that exists beyond our daily experience. It was put up on youtube so if you have not seen it, check it out. Follow this link or go to the bottom of this post where it is embedded.

Recently, I came across a flash animation in the spirit of the original move. It does a great job giving an idea of the relative scale of things ranging from the very small – Planck length and quantum foam – all the way up to the entire universe. The animation is interactive, allowing the user to control the speed and direction of change.

The animation is particularly effective at the smaller scales where it shows the huge spans of empty space between the different types of subatomic particles. I like that it includes electromagnetic waves from picometer long gamma rays to 100 meter long AM radio waves.

One of the more profound points of the original powers of 10 film is the enormous amount of empty space out there between us and the rest of the universe. This new animation does not make this point as effectively because the authors include items at all scales from trees and buildings to planets, solar systems, nebulae, star clusters, galaxies and local galactic groups. The number of items shown obscures the vast amount of empty space present in the larger spatial scales. On the plus side, it is interesting to see all of the things that exist at these different scales. So, rather than seeing this as a drawback the inclusion of items at all time scales makes the animation an excellent compliment to the Aemes movie which still resonates over 40 years after it was made.

The Eames powers of 10 video: