New Internationalist

The Facts

Issue 137

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THE RICH [image, unknown] The FACTS

[image, unknown]

The FACTS

The Rich

[image, unknown] Slicing the Cake

Wealth is concentrated in far fewer hands than income. In the UK while the richest five per cent take 10 per cent of income, they own at least 55 per cent of the wealth. Most surveys wildly underestimate this concentration of wealth because rich people are rarely obliged to declare their assets.

[image, unknown] United Kingdom
Richest 1% take 30%
[image, unknown] United States
Richest 1% take 25%
[image, unknown] Canada Richest
1% take 22%
[image, unknown] Australia Richest
1% take 20%

Source: A. Harrison The Distribution of Wealth in Ten Countries 1979.


Tight Budgets

Distribution of household income is the easiest measure of inequality. The table shows the percentage share of total income taken by the wealthiest and the poorest groups in each country. In the US the richest 20 per cent get 10 times as much as the poorest, in Brazil they get more than 30 times as much.

[image, unknown]
Industralised Countries
Poorest
20%
Wealthiest
20%
Netherlands (1977)
8.1
37.0
Sweden (1979)
7.2
37.2
Norway (1970)
6.3
37.3
United Kingdom (1979)
7.3
39.2
Australia (1966-67)
6.6
38.8
Japan (1969)
7.9
41.0
Spain (1974)
6.0
42.2
Italy (1977)
6.2
43.9
Germany Fed. Rep. (1974)
6.9
44.8
Canada (1982)
4.5
42.7
United States (1972)
4.5
42.8
France (1975)
5.3
45.8

Source: World Bank, World Development Report, 1983

Developing Countries
Poorest
20%
Wealthiest
20%
Bangladesh (1973-74)
6.9
42.2
Sri Lanka (1969-70)
7.5
43.4
Korea, Rep. of (1976)
5.7
45.3
Malawi (1967-68)
10.4
50.6
Hong-Kong (1980)
5.4
47.0
India (1975-76)
7.0
49.4
Indonesia (1976)
6.6
49.4
Tanzania (1969)
5.8
50.4
Trinidad Et Tobago (1975-76)
4.2
50.0
Argentina (1970)
4.4
50.3
Chile (1968)
4.4
51.4
Philippines (1970-71)
5.2
54.0
Venezuela (1970)
3.0
54.0
Malaysia (1973)
3.5
56.1
Turkey (1973)
3.5
56.5
Nepal (1976-77)
4.6
59.2
Kenya (1974)
2.6
60.4
Peru (1972)
1.9
61.0
Panama (1970)
2.0
61.8
Mexico (1977)
2.9
57.7
Brazil (1972)
2.0
66.6

[image, unknown] Taking their Share

Apart from being the major ingredient of personal wealth, company shares also give the rich a firm grip on our national economies, and power over the working lives of millions.

UK Richest 10%
own 89% of shares

US Richest 1%
own 57% of shares

Source: Royal Commission on Income and Wealth, and US Congress.


The Right Ingredients

The rich do not simply have more of everything; they have more of particular things - especially land and company shares. These are the main components of wealth at different levels:

[image, unknown]

POOR MAN’ Total wealth $10,000

Homes 23%
Life assurance 22%
Savings accounts 10%
Other assets 45%

[image, unknown]

RICH MAN’ Total wealth $400,000

Homes 12%
Land 19%
Company
shares 34%
Other assets 35%

Figures for UK, from Royal Commission on Income and Wealth, 1979


Fruits of the Earth

Land is the ultimate resource for the owner controls everything and everyone on it. Almost everywhere it is a bastion of wealth. In the Third World land tenure is the main indicator of economic inequality.

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[image, unknown] Worth a Million

In the US in 1980 there were 4,112 people who declared an income of more than $1 million for the year. Among them are the world’s highest paid corporate executives, who get salaries (excluding fringe benefits) of over a million dollars a year.

The Boss Annual Salary
Union Oil $1,541,000
ITT $1,136,000
Revlon $1,133,000
Intemational Harvester $1,034,000
United Technologies $1,025,000
Mobil Oil $1,022,000

[image, unknown] Suggestions on how to help spend that $1 million a year.

Rolls Royce - $90,000
Yacht - $250,000
Mink Coat - $15,000
House in the Bahamas $1 ‘million


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