In the United States, mean wealth per adult reached $347,845, and median wealth per adult hit $53,352 (Databook, Table 2-4). This represents an increase in median wealth of 18.8% over 2013, enough to move the U.S. up two places to 25th in the world.
Before we congratulate ourselves too much, we need to remember that $53,352 is not all that much money, especially for retirement (don't forget that figure includes home equity). With 49% of Americans in the private sector having no retirement plan at all, and only 20% having a defined-benefit pension, a retirement crisis is looming for younger baby boomers and all later middle-class retirees. Meanwhile, if Republicans take control of the Senate in this year's elections, we are likely to hear increasing demands for cuts to Social Security, when what we actually need is to raise Social Security benefits.
The relatively low median wealth also points to persistent inequality in the United States. While only 25th in median wealth per adult, the U.S. ranks 5th in mean wealth per adult. With a ratio between mean and median wealth per adult of 6.5:1, this is higher than any of the other top 25 countries. Number one Australia has a ratio of less than 2:1. Without further ado, here is the list of all countries with median wealth per adult above $50,000.
Cross-posted at Angry Bear.
Median wealth per
adult, mid-2014
1. Australia 225,337
2. Belgium 172,947
3. Iceland 164,193
4. Luxembourg 156,267
5. Italy 142,296
6. France 140,638
7. United Kingdom 130,590
8. Japan 112,998
9. Singapore 109.250
10. Switzerland 106,887
11. Canada
98,756
12. Netherlands 93,116
13. Finland 88,130
14. Norway 86,953
15. New Zealand 82,610
16. Ireland 79,346
17. Spain 66,752
18. Taiwan 65,375
19. Austria
63,741
20. Sweden 63,376
21. Malta
63,271
22. Qatar 56,969
23. Germany 54,090
24. Greece 53,375
25. United States 53,352
26. Israel 51,346
27. Slovenia 50,329
Source: Credit Suisse Global Wealth Databook 2014, Table 2-4
Why is the US #4 in median INCOME (ahead of Australia at #5), but so far behind in median WEALTH?
ReplyDeleteBecause we CHOOSE not to save.
The relatively low median wealth is an indication of "inequality" of CHOICES. Bad choices have bad outcomes, and good choices have good outcomes.
Australians do not earn more money, but they SAVE more money. They make Good Choices.
The solution is to get Americans to make Good Choices, not to reward them for making Bad Choices.
My take is that this is a great example of statistics being like lampposts. They can be used for light, or...as the drunk uses the lamppost, for support.
ReplyDeleteThe average Italian or Frenchman is three times wealthier than the average American?
No, the average Italian or French person is not three times wealthier. U.S. mean wealth per adult is higher than both. But the median for the French and Italians is far higher than in the U.S., because of the highly unequal distribution of wealth in the U.S. Half of American adults have less than $53,352 in net assets. Half of French adults have over $140,000 in net assets. The mean (not median) of Italian debt per adult is under $26,000, far less than in the U.S.
DeleteMean, median, mode are three different ways of looking at 'average'. But, put aside the pedantry. Are you really capable of believing that the 'median' Italian is three times wealthier than the 'median' American?
DeleteTo make my point a little clearer, the census;
ReplyDeletehttps://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf
tells us that the median size of newly constructed residences in the USA was 2,169 sq ft in 2010, while the mean average was 2,392 sq ft. The median is within 90% of the mean. (note that in the supposedly less unequal early 1970s, it was only 92%).
Now, I can't readily find the same mean v median sq. footage internationally, but surely, if you're correct that countries like Italy and France have less inequality, then the difference is even less than in the USA. So, mean should work well enough for comparison. And this site;
http://www.apartmenttherapy.com/average-home-sizes-around-the-151738
says Americans live in much, much bigger houses. How does that square with the Credit Suisse report?
The size of residences does not correlate with wealth across countries. A square foot in an Italian city is worth more than a square foot in the U.S., because Italy is much more densely populated. Mean Italian wealth is mostly in non-financial wealth, whereas in the U.S., it is over 2/3 in financial wealth (but we don't have data for those categories at the median).
DeleteAnd yes, I am quite capable of believing that the median Italian has much more wealth than the median American. Their homes are expensive, and mostly paid off.
I take it you've never been to Italy.
DeleteOf course I've been to Italy. Like I tell my students, I have the perfect job because I'm passionate about politics and I love to travel.
DeleteIf Italians have such large amounts of equity in their homes, wouldn't they be able to borrow against that to finance consumption and stimulate the Italian economy out of its lengthy depression?
ReplyDeleteWe don't seem to see that happening.
Having home equity isn't much help in these situations. So Italian property values are high. What good does that do the Italians? None. How does it help the "median" Italian retire? Will he sell his house and move to a cheaper country?
ReplyDeleteBill Gates is in a similar situation. He is a multi-billionaire on paper, but if he announced tomorrow that he was selling all of his Microsoft stock, what would it be worth?
This is one of the fallacies of wealth comparisons and of the concept of a wealth tax.