Thursday, January 5, 2012

The real 1% - Possibly you and me...

On my way to work this morning, I heard a figure that really gave me some perspective.  To be in the top 1% of earners in the US, an income of more than $500k is needed, but to make it to the top 1% in the world, one needs to earn only $34,000/year.  You heard that right...$34,000 a year!

The global median salary is only $1,225 a year.  In the United States, a single person receiving welfare payments (some of the poorest in the country) can expect to receive an average payment of $200/month  or $2400/year.  That's almost twice as much as the median worldwide! (I do realize that median is much different than average, but I think it still illustrates my point).

I'd like to make something very clear though.  I have no problems with people making significant amounts of money.  I don't expect those people to give (voluntarily or involuntarily) their hard earned money to those that are "less fortunate."  I think it's for the benefit of all that people are encouraged to work hard and give themselves opportunities to make money. I just found it thought provoking that in today's American culture, people always want more more more money because they can't possibly survive on their current level of income.  In a country where wants are considered needs, and material driven consumerism is an epidemic, it seems that many people have lost perspective on what is really important.  It's not about the stuff you have, it's about the life you lead and what you leave behind.  I'm not trying to put down or judge anyone that has a lot of stuff.  We too have luxuries that we don't need, but they do make our lives easier, more enjoyable, etc.

Over the last couple of years, we've started looking closely at the money we spend, where it's being spent, and if it could go other places more appropriately.  I would encourage anyone reading this to take a long look at there spending habits.  If you want to keep all those luxuries, go for it, but just realize how good you truly do have it in this country.  If you're only making minimum wage, which just went up to $7.70/hour here in Ohio, your annual salary is $16,016.  That's over 1300% higher than the global median!  Even if you're on welfare, you're still doing better than half of the world...

Do what you can with what you've got now, but always strive for something better.

Let me know what your thoughts are on these figures.  Did it change your perspective as it did mine?

2 comments:

Rachel (Hounds in the Kitchen) said...

Because money is a human construct, the real measure for comparison should be something more along the lines of 'what resources can be acquired' with said income. The cost of living varies considerably too, basically. There's no denying that my standard of living is very high compared to the rest of the world even though I don't feel wealthy...

Jeremy Fincher said...

Along with Rachel's point is the simple fact: money is worth different things to different people. Just like $10 buys a lot more in Sub-Saharan Africa than it does here in America, $10 means a lot more to someone who makes $1000/month than it does to someone who makes $1000/hour.

When people (like me, and like Warren Buffet) propose that higher incomes ("the 1%") should be taxed at a higher percentage than lower incomes, we're recognizing a simple fact: that 50% of Warren Buffett's income is worth less *to him* than even 10% of my grandmother's income is worth to her. Increase Warren Buffett's tax liability by 10% and he'll hardly notice; increase my grandma's tax liability by even 1% and she'll bake fewer cakes and make fewer long distance calls.