Compared to the Rest of the World Americans Are All the 1%

The Occupy Wall Street protesters may claim to represent the grievances of the 99%, but we should remember that when it comes to the global income distribution, we are the 1%. Domestic inequality may be on the rise, but so too is international inequality, with similar inherent power imbalances that benefit the wealthiest.

We are technically not all the 1%. United Nations researchers Davies et al. calculated in 2008 that the cutoff for the wealthiest 50% of the global income distribution was $2,138; for the top 10% and 1% the cutoffs were $61,000 and $510,000, all measured in 2000 U.S. dollars. Global wealth remains concentrated in a few hands in New York, London, Shanghai, and Dubai. But as Branco Milanovic shows in The Haves and the Have-Nots, the bottom 10% of the U.S. income distribution falls in the upper 30% of the global income distribution. When considered from this perspective, the prospects of the 99% are drastically improved.

According to the Department of Health and Human Services, the poverty line for an individual in the 48 contiguous states and Washington, D.C., was $10,830 in 2010. Compared to global measures of GDP per capita for 2010, an individual at the poverty line in the United States has an income in between the average for Lithuania and Seychelles, ranked 49th and 50th. This may sound less than ideal for those of us accustomed to the lifestyle and conveniences of the first world. But put differently, someone at the poverty line in the United States is in the top 14% of the global income distribution.

With more than a billion people around the world now living on less than $1 per day, the Occupy protesters are living in better conditions than many of the global poor. People brought them Thanksgiving dinner. The Occupy Philly protesters are postponing a move to a new site until they can ascertain whether they will have access to water and electricity.

The U.S. represents 4.5% of global population but nearly 30% of its total GDP. The 99% may not control the wealth that is concentrated in the United States, but we all benefit from the outsized role the U.S. plays in global economic, financial, and trade policy. So while we consider what reforms are necessary to rebalance our domestic wealth, we should be mindful of the conditions of those who are truly at the bottom of the global income distribution. Or we may soon find ourselves face to face with the true 99%.

[Sources: Federal Register, World Bank, Davies et al. (2008), NYT on Milanovic, author's calculations]

Photo Credit: Wikimedia Commons