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Thursday, October 17, 2013

Median Wealth Increases, but U.S. Still Stuck at 27th in World

The new Global Wealth Report and Global Wealth Databook from Credit Suisse were released last week. According to the Report (p. 3),
Global wealth has reached a new all-time high of USD 241 trillion, up 4.9% since last year and 68% since 2003, with the USA accounting for 72% of the latest increase. Average [mean] wealth per adult reached a new all-time high of USD 51,600, with wealth per adult in Switzerland returning to above USD 500,000.
For the United States, this represents an increase in mean wealth per adult of 11.4% from mid-2012 to mid-2013 (Databook, p. 92). Median wealth per adult increased even faster, from $38,786 to $44,911, or 15.8%, although we should recall that measurement of median wealth is less reliable than that for mean wealth.

Nonetheless, while these data represent improvement for the typical American, there was no change in our ranking relative to the rest of the world. While Kuwait and Cyprus fell below the U.S., Slovenia and, more surprisingly, Greece now have higher median wealth per adult. Thus, the United States remains only 27th in the world.

These data are significant for at least two reasons. First, they highlight the fact that while the United States has a higher gross domestic product per capita than all but four of the 26 countries ahead of it in median wealth per adult (Qatar, Luxembourg, Singapore, and Norway), the long-term trend of economic policies has clearly hurt the middle class. Inequality is a big part of the explanation here: mean wealth per adult in the U.S. is 6.7 times median wealth per adult, the highest ratio in the top 27. By contrast, in #1 Australia the mean-to-median ratio is only 1.8:1. In fact, this ratio is less than 3:1 for 19 of the 26 countries with higher median wealth per adult. In Slovenia, mean wealth per adult is less than 1.5 times median wealth per adult! (All figures calculated from Databook, Table 3-1.)

Second, these low levels of wealth contribute to the coming retirement crisis of the middle class. Americans have low levels of saving, while Social Security still looks vulnerable to the chopping block despite our already high level of elder poverty.

Here are the top 27 countries by median wealth per adult.

Country                                                      Median Wealth
                                                                   Per Adult

1.  Australia                                                    $219,505
2.  Luxembourg                                               $182,768
3.  Belgium                                                     $148,141
4.  France                                                        $141,850
5.  Italy                                                           $138,653
6.  United Kingdom                                         $111,524
7.  Japan                                                         $110,294
8.  Iceland                                                      $104,733
9.  Switzerland                                               $  95,916
10. Finland                                                     $  95,095
11. Norway                                                    $  92,859
12. Singapore                                                 $  90,466
13. Canada                                                     $  90,252
14. Netherlands                                              $  83,631
15. New Zealand                                            $  76,607
16. Ireland                                                      $  75,573
17. Spain                                                        $  63,306
18. Qatar                                                        $  58,237
19. Denmark                                                  $  57,675
20. Austria                                                     $  57,450
21. Greece                                                      $  53,937
22. Taiwan                                                      $  53,336
23. Sweden                                                     $  52,677
24. United Arab Emirates                                 $  51,882
25. Germany                                                   $  49,370
26. Slovenia                                                    $  44,932
27. United States                                            $  44,911

Source: Credit Suisse Global Wealth Databook, Table 3-1

Cross-posted at Angry Bear.


  1. What happened to "being the richest nation in the world"? Just more rightwing delusion?

    1. Quite right. Whether measured by GDP per capita as I use above, or by mean wealth per adult (another statistic in the Global Wealth Databook and Report), the U.S. only comes in fifth. The only sense in which it is still "richest" is that it has the largest total GDP in the world.

    2. Australia #1 aye? Not bad for a country with the highest Minimum wage in the World, Universal Health Care, Paid Maternity/Paternity Leave,Paid Holidays, Paid Sick Leave, Unemployment benefits for Life and so many more things that we share equally to/with all our citizens.

      All that Government Spending and Coverage...All those Benefits and Rights to workers...

      And we are the Richest individuals in the world.

      I hope any republicans out there see this as proof as all your thinking and bullshit is WRONG.

      America is NOT doing well at all, just a few Hyper Rich Americans hide the vast number of Americans who aren't making much at all.

      But what can you expect from the 2nd most UNEQUAL Country in the World in terms of wealth equality?

      (Which makes America the 2nd most Greedy/Selfish Country!)

    3. This reflects MEDIAN wealth. What this article doesn't tell you is that the U.S is 7th in MEAN per capita wealth. We are the 7th richest nation in the world but because of wealth distribution (income and wealth inequality) most of that wealth lies in the hands of the upper 1%. This is primarily due to cutting taxes on the RICH and placing the burden of running this nation on the middle class.

    4. Pooterduude, you are absolutely correct. However, in my comment above I note that the U.S. was at that time fifth in mean wealth per adult as well as fifth in GDP per capita. We have no disagreement on what this means. Thanks for the comment.

  2. There are two things that stand out in these statistics - in spite of the huge increase in USAnian wealth, the median wealth barely moved. Whatever happened to Trickle-Down?

    And in spite of a much lower rate of wealth creation, those "socialist" French, much loathed by the trickle-down right, have more than three times the median wealth than USAnians. Maybe those French are doing something right USAnians ought to learn from?

    1. I think you have it backward. The increase in median wealth (half above and half below) exceeded that of average wealth. Thus, the growth of the wealth of the lower half outpaced that of the upper half by a considerable margin.

      As for France, their wealth is primarily in the homes, which cost about twice what ours do (for less house, too). About 2/3 of their wealth is in real estate and 1/3 in financial assets.

      That is reversed in the U.S., where 2/3 of our wealth is in financial instruments, and only 1/3 in real estate.

  3. It would be interesting to see how the ranking would appear if you subtracted the wealthiest of the wealthy, say the top 10% or .1% and compare the statistics on "everybody else." I would guess that the numbers would reveal an even more striking picture of wealth inequality.

  4. We are also fourth in median household income (in PPP), according to the OECD.

    If we are not saving money, it is no-one's fault but our own, and no-one's responsibility but our own.

    1. And if unemployment doubles overnight, it's the fault of the newly unemployed individuals? And if I'm born with a genetic predisposition to heart disease and diabetes, it's nobody's fault but my own? And if I live in a country where all the post-tax gains from decades of productivity increases went to a small group at the top, it's nobody's fault but my own that I can't save or I have to tap into my 401(k) and lose my house when I'm out of work for two years? The whole point of social insurance is to spread the risk of these highly unpredictable events to a wider pool of people.

    2. Re, Unemployment: The majority of those "newly unemployed" voted overwhelmingly for those who put in the policy that priced them out of their jobs. When the price of a commodity is increased overnight by government decree, less of that commodity will be purchased.

      Your genetic predispositions are not my fault, either. Nor are they the fault of the insurance company upon which you wish to foist the cost.

      To whom should the gains in productivity go? Let us say there is a plowman who, walking behind a mule, can plow one acre per day. The owner of the farm buys a tractor, and now the plowman can plow ten acres per day. Should be plowman, now sitting on the tractor instead of walking behind the mule, be the one who gets the benefit from his ten-fold increase in productivity?

      In what way are the workers themselves responsible for their productivity increases? Are the workers buying the new plant equipment? Are the workers buying the new software? Are the workers developing the statistical analysis routines that improve purchasing efficiency (just-in-time delivery) and reducing the need for on-site storage? No.

      But assuming median real income has NOT increased in the last few decades, how is it that our houses are nearly twice the size (while family size has declined) they were 40 years ago? How is it that in 1970, only 35% of households owned more than one vehicle, but with no real income gains, now more than 55% do? (And they are far better cars, too.)

      Now, I, too, lost my job in this recession. Twice. I took occasional, part-time work at half my usual wages. (Of course, whenever I did that, I was not getting unemployment insurance. The structure of our unemployment insurance discourages taking such measures.) I did tap into my 401(k) to keep up with the mortgage payments, but I did have a 401(k) to tap because I always put as much as allowed into in while I am working. As you know, very few people do that. Whose fault is that? Their own.

      But now you speak of specific individual situations -- yours I presume -- when the topic at hand is the nation as a whole. As a whole, our median household income, in terms of Purchasing Price Parity, is fourth in the world. So what excuse do we, collectively, have not have for saving?

    3. Regarding your first point, it doesn't matter who they voted for (GW Bush, in this instance) that determines blame.

      Second, you are just deliberately pretending not to understand how insurance works. The whole idea is to pool risks. Insurance companies price insurance so as to cover risk and make a profit. It can obviously be done at less cost per person than the U.S. does it, because every industrialized democracy in the world does so.

      In your productivity example, it takes more skill to drive a tractor than a mule, so the driver is certainly entitled to a share of the gains. Workers learn to do things that require more skill.

      You can't understand inflation by looking at only the things that have seen slower price growth. You are forgetting that health care and education, for example, have skyrocketed in cost since 1970.

      As far as median household income goes, the OECD's data seems to me to systematically make the U.S. look better than Europe, because the final number comes after you subtract income tax and social security (lower in the U.S.) and excludes in-kind government and private services (lower in the U.S., particularly on health care). In other words, it punishes European for their high taxes but doesn't reflect the benefits they receive for them. See

    4. Actually, it was the Democrats in Congress who raised the Minimum Wage. Yes, Bush should have vetoed it, but it was not his idea, and very few Republicans voted for it.

      As for productivity, that is only one example. Did it take more skill to be a wheelwright, or to pick up the wheel and bolt it to the car? Productivity increases most where capital investments can make better use of unskilled labor.

      Health care is a heck of a lot better than it was 40 years ago, too. I wager that the same level of care is cheaper now than it was 40 years ago.

      As for education, the subsidies are largely responsible for driving up the price. More money pumped into a market naturally drives up the prices in that market. (And Adam Smith's remarks about public school teachers have proven remarkable accurate, too!)

      To your last point, perhaps that is why the numbers de Credit Suisse are so different from those of the OECD.

    5. "excludes in-kind government and private services (lower in the U.S., particularly on health care)". LOL, US government spending on healthcare outpaces other Western European countries as a percent of GDP including the UK and their incredibly social NHS system. This is thanks to US doctors higher salaries, which they deserve for traditionally being educated for much longer than doctors in other countries.

    6. Jared, I think you missed the qualifier "in-kind." The NHS is an "in-kind" benefit (British people don't pay for it when they get service), whereas Medicare leads to private spending on private health services. That's an example of what I meant.

  5. Your "solution" might be problem"

    'Mr. Greenspan's biggest revelation came one day about a year ago when he was playing with gross domestic savings numbers. What he found, to his surprise and initial skepticism, was that an increase in entitlements has closely corresponded to a decline in the country's savings. "We had this extraordinary increase in benefits, with each party trying to outbid the other," he says. "That practice has been eroding the country's flow of savings that's so critical in financing our capital investment."'

    1. Just off the top of my head, this does not sound plausible. Compared to other OECD countries, we have one of the least generous welfare states *and* one of the lowest savings rates. If entitlements were crowding out savings, it should show up in data for other countries, too.

    2. We would have to look at how changes in their benefits affected their savings rates. It is one factor among many.

      Still, it does make sense. If two men have identical lifetime earnings, one squanders his other saves as much as he can, our government rewards the foolish man by subsidizing his kids college and by subsidizing his retirement. Meanwhile, our government punished the wise man by taxing him more.

      This is not a rational policy.

    3. Jack, the logic of your position does not make sense at the micro level, either. If entitlement programs give people higher income, their propensity to save goes up, not down.

    4. They give WASTEFUL people higher incomes, and take away from those who would save.

      Even the proponent of those programs say the same -- touting the so-called "ripple-effect" or whatever, as though the savers just stuff the money in their mattresses.

  6. Anonymous, removing the 0.1% might make a big difference to the mean, but it wouldn't make a big difference to the median. That's the good thing about the median, it avoids the distorting effect of a tiny wealthy minority and just shows what wealth level half the people are above and half below.

  7. maybe I'm just an arrogant out of touch rube from Newton, MA, a wealthy liberal suburb of Boston, but anyone who has a blog post with Slovenia doing better then the US on any measure of overall economic well being...

    imo, it doesn't pass the smell test

    1. Um, what do you know about Slovenia? It's the richest part of what was once the best country to live in in Communist eastern Europe (Yugoslavia), so it had a head start over a lot of the other new EU members that joined with it in 2004.

      In any event, Slovenia does better than the U.S. on infant mortality (4.08 vs. 5.90 per 100,000 live births), according to the CIA World Factbook ( and on employment protection, according to Organization for Economic Cooperation and Development statistics (, search by theme, select "labour," then "labour protection").

      Although it has a population under 2 million, and it has been hurt by the recession, Slovenia is doing pretty well under the radar. It would be doing better without eurozone monetary policy to contend with. You shouldn't be so surprised at its result on median wealth.

    2. Infant mortality is skewed in the U.S. because we count extremely premature births as being live. Taking out this factor would reduce our rate by approximately 40% according to statistical analysis. Also, Slovenia is a ****hole

    3. Hi Jared, welcome to the blog. You don't give a link for your counting claim, but the work I have seen reviewed ( suggests that counting differences may account for 40% of the *difference* in infant mortality rates, not 40% of infant mortality. As Aaron Carroll says in the linked article, "that would only get us closer. It would still leave us way worse."

      Regarding Slovenia, why do you say it is a ****hole? Have you been there? I've been to Ljubljana, and it was very nice.

  8. Thanks for the update. Impressive increase, though must say the median wealth in the U. S. is laughably low. Who can count on that amount for retirement? For this reason alone, impossible to see entitlement cuts.

    On the other hand, pension plans and many retirement accounts should have seen their size grow nicely in the past year. Does this reduce the pressure on the retirement shortfall by any means?

  9. Interesting, the recession/depression plagued PIIGS with anywhere from 10-30% unemployment have higher median wealth than the workhorse of the Eurozone, Germany. This does not correspond to the empirical reality of the Europe.

  10. If you factor in different races the numbers change dramatically White Americans are have a median household wealth of $110,729 which is good for 6th on the list, Asian Americans are higher than that too. So the fact that our country is not as homogenous as the others on this list is a huge factor. Also that a lot of younger kids right now have a lot of student skews the numbers downward as well, when they pay off this debt things will be much better.

    1. Is this median household wealth per adult, as in the Credit Suisse survey?

      But you are wrong about homogeneity. If you look at countries by percentage of the population, the United States is only 14.3%, but Austria is 15.7%, Ireland and Sweden 15.9%, Canada 20.7%, New Zealand 25.1%, Australia 27.7%, Switzerland 28.9%, Singapore 42.9%, Luxembourg 43.3%, Qatar 73.8%, and United Arab Emirates 83.7%. That's 11 with larger foreign-born populations than the U.S. We are not overwhelmingly ethnically diverse relative to the other countries on this list.

      Finally, even with the just-announced changes to student loan debt here, as long as college remains as expensive as it does relative to the rest of the world, there will be new students taking on debt as other graduate finally pay theirs off.

  11. I find it funny that despite being what Americans call "socialist", Australia is still the richest country in the world. Looking after people who are in dire need is not communism, it's humanity, and it helps the economy in the long run anyway.

  12. I'd just like to take a moment to thank Dr. Kenneth for getting into the comment section, mixing it up and answering to the reactionaries.

    When it comes right down to it, good ethics have proven themselves to be good economics and politics. It seems that what the reactionaries will never get is that we are all into this life and on this planetary home together. We are much happier and productive overall when the least of us, our planet and the other creatures who inhabit it are protected from life's and the cosmos's vagaries.