Just how much is inequality costing ordinary Americans? Comparing the United States to other more egalitarian-minded developed nations can give us a vivid sense of the high toll that inequality exacts. Take, for instance, the example of Japan, one of the world’s most equal nations.
In their new Global Wealth Report, Credit Suisse’s researchers describe the 2017 Japanese economy as “still in the doldrums.” But ordinary Japanese households would almost certainly take their “doldrums” over the economic status quo in the United States any day of the week.
The numbers explain why. The United States has over 50 times more ultra rich than Japan, and that enormous wealth at the top has the U.S. average net worth towering over the average Japanese net worth, by a $388,586 to $225,057 margin. But Japan shares its household wealth far more equally than the United States. The typical Japanese adult holds $123,724 in net worth, much more than double the $55,876 U.S. median adult net-worth figure.
Ordinary Americans, in effect, are each paying what amounts to an “inequality tax.” If we distributed our wealth as equally as the Japanese distribute theirs, the typical American would likely be somewhere around $100,000 richer.
Or take Australia, a nation that now sports almost the exact same average adult wealth as the United States. The average Aussie has a $402,603 net worth, just a bit above the average American’s $388,586. The net worth of the median — most typical — Australian? A stunning $195,417, four times the median adult net worth in the United States.
Australians used to see their nation as a relatively equal society. They don’t anymore. Rising inequality has become a major Australian political issue. But Australia remains far more equal a society than the United States. The top 1 percent in Australia only holds an estimated 15 percent of the nation’s wealth.
America’s top 1 percent, Federal Reserve researchers reported earlier this fall, now holds 38.6 percent.
Sam Pizzigati, an Institute for Policy Studies associate fellow, co-edits Inequality.org. His latest book — The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970 — traces how average Americans ended the nation’s original Gilded Age. Follow him at @Too_Much_Online.