STWR - Share The World's Resources

In December, 2006, Goldman Sachs, a Wall Street financial services company, announced a sixteen and a half billion dollar bonus for its 26,500 employees, an average of $623,418 per employee. Their newly appointed CEO received a bonus of $52,000,000.

With the rain of riches falling upon Wall Street these days, the practice of distributing rewards at the top is picking up steam. CEOs and executives at Lehman Brothers and Morgan Stanley are receiving bonuses as high as $60 million. The manna from heaven continues to fall, and the optimists just want to let the good times roll. They see the benefits of Capitalism unending. Halleluiah! We're on a bonus march!

The very thought of it takes your breath away and also takes you back to the days of the original bonus marchers.

In May of 1924, the US Congress voted a cash bonus to the veterans of World War I. Because the money wasn't readily at hand, they devised a delayed bonus structure, the money to be paid out in twenty years, around 1944 and 1945.

Joel S. Hirschhorn, 20th Dec 06 - The Progress Report

How ironic that the Bush administration successfully talked up the global threat from terrorism while it pursued domestic and foreign policies promoting economic apartheid, a far greater and more pervasive threat to national and global stability.

The human race on planet Earth, taken as an aggregate mass abstraction, may be getting richer. But a new report from the World Institute for Development Economics Research of the United Nations University shows that wealth creation is remarkably – one might say criminally – unequal. Follow this hierarchy at the top of the wealth pyramid: The richest 1 percent of adults alone owned 40 percent of global assets in the year 2000; the richest 2 percent owned more than half of global household wealth; and the richest 10 percent of adults accounted for 85% of the world total. That leaves very little for the remaining 90 percent of the global population. Could it be any worse? Yes, the rich are still getting richer, more millionaires are becoming billionaires.

Matthew Benjamin, 13th December 2006

Americans overwhelmingly say the growing gap between rich and poor has become a serious national concern, a sentiment that may bolster Democrats' plans to narrow the income divide when they take control of Congress.

Almost three-quarters of Americans believe inequality is a major issue, versus 24 percent who don't think so, according to a new Bloomberg/Los Angeles Times poll. Most of the concern is among Democrats and independent voters, though a majority of Republicans -- 55 percent -- also called the situation serious.

"Income inequality is widening quite rapidly,'' said Alice Rivlin, a former vice chairwoman of the Federal Reserve who's now a public policy professor at Georgetown University in Washington. "It does matter to people that there are such unequal chances to get ahead.''

Personal wealth is distributed so unevenly across the world that the richest two per cent of adults own more than 50 per cent of the world’s assets while the poorest half hold only 1 per cent of wealth.

A survey released on Tuesday shows that middle-income countries with high growth rates still have a long way to go before they have a hope of catching up with the levels of prosperity of the richest.

Adults with more than $2,200 of assets were in the top half of the global wealth league table, while those with more than $61,000 were in the top 10 per cent, according to the data from the World Institute fpr Development Economics Research of the United Nations University (UNU-Wider).

To belong to the top 1 per cent of the world’s wealthiest adults you would need more than $500,000, something that 37m adults have achieved.

So much of the world’s wealth is concentrated in few hands that if all the world’s wealth was distributed evenly, each person would have $20,500 of assets to use.

Almost 90 per cent of the world’s wealth is held in North America, Europe and high-income Asian and Pacific countries, such as Japan and Australia.

While North America has 6 per cent of the world’s adult population, it accounts for 34 per cent of household wealth.

The concentration of wealth in different countries varies considerably, with the top 10 per cent in the US holding 70 per cent of the country’s wealth, compared with 61 per cent in France, 56 per cent in the UK, 44 per cent in Germany and 39 per cent in Japan.

According to Anthony Shorrocks, the director of UNU-Wider, the number of wealthy individuals in a country depends on the size of the population, the average wealth and its inequality.

“China fails to feature strongly among the super-rich because average wealth is modest and wealth is evenly spread by international standards”, he said.

As countries grow richer, their population changes how it holds wealth, according to the report.

In developing countries, property, particularly land and farm assets are important, while cash savings tend to dominate in middle-income counties.

Only in certain advanced countries such as the US and the UK with developed financial sectors is there a strong appetite for holding equities and other more sophisticated financial assets.

Debt is also low in poor countries because financial institutions do not exist to allow people to borrow.

In contrast, the authors say “many people in high-income countries have negative net worth and, somewhat paradoxically, are among the poorest people in the world in terms of household wealth.”

Wealth is difficult to measure even in the most advanced countries, so the research was based on painstaking compilation of aggregate and survey data for the 38 countries of the world where it exists and statistical models for the rest of the world.

Chris Giles

Published on 8th December 2006, by The Financial Times

© Copyright The Financial Times Ltd 2006.

Economic inequality has now been increasing in the United States for more than 30 years, and for much of that time its causes seemed fairly clear. Computers and other new technologies replaced many blue-collar workers, undercutting the bargaining power of those workers. Global trade was doing the same by allowing companies to make their products elsewhere. Highly educated workers, on the other hand, were able to work more efficiently — and thus make more money — thanks to new technology, and to play on a bigger stage thanks to globalization. This was the story of inequality from the mid-1970s through the late 1990s.

But the story seems to be changing. This year, a new economic statistic that casts doubt on the old consensus began getting some serious attention. Over the last five years, the average pay of college graduates grew at only a little better rate than inflation. For now, most holders of bachelor’s degrees appear to be on the wrong side of the inequality divide, which suggests that the slice of the American work force on the right side of the divide has become extremely narrow. Even families at the 90th percentile of the income distribution (now earning about $110,000 a year) have received only a marginally bigger raise over the last decade than those in the middle of the distribution.

A comprehensive approach can help address misperceptions as well as find sustainable pathways out of destitution

All human rights - the right to speak, to vote, but also the right to food, to work, to health care and housing - matter to the poor because destitution and exclusion are intertwined with discrimination, unequal access to resources and opportunities, and social and cultural stigmatization. A denial of rights makes it harder for the poor to participate in the labor market or have access to basic services and resources. In many societies, they are prevented from enjoying their rights to education, health and housing simply because they cannot afford to do so. This, in turn, hampers their participation in public life, their ability to influence policies affecting them and to seek redress against injustice.