Sunday, October 16, 2011

We Are the 1%

. Sunday, October 16, 2011

I came across the Occupy Prishtina Tumblr the other day. While I find the rapid spread of the #OWS movement across the globe to be interesting, it also got me thinking. Kosovo is the poorest country in Europe. According to the CIA World Factbook, about 15% of its GDP GNP comes from remittances, and another 7.5% comes from aid and foreign donors. Kosovo has 40% unemployment and per capita income is under $3,000/year. And, of course, they are perpetually threatened by their stronger, richer, larger neighbor -- Serbia.

Almost anyone in Kosovo would gladly trade places with almost anyone camping out in Zuccotti Park. This is illustrative of the fact that the "We are the 99%" sentiment very much depends on which sample you are looking at. If you make $39,000/year you are below the US mean and median, and thus firmly within the domestic 99%. But an income of $39,000/year puts you in the top 1% of the global income distribution.* The American middle class may have stagnated in recent decades, but it is still a much better life than that of 99% of the world's population.

Not including my tuition remission, the stipend UNC gives me for teaching is about $15,000/year. I am occasionally able to supplement that by another grand or two through various sources. While that is above the poverty line, I obviously don't lead an extravagant life. And yet I am in the top 8% of the world's income earners, with expectations of doing far better within a year or two.

Of course the top 1% of Americans are even more elite. I'm not trying to diminish that fact, and I know that the "We are the 99%" is a slogan intended to amplify a broader political point. But I'd like to encourage folks to think globally. There are few people in the US whose lives are not within the world's top 10-15%.

*Yes that is PPP-adjusted.

UPDATE: Suzy Khimm and Scott Sumner make similar points. Khimm's numbers are slightly different than mine; I'm not sure why, but the takeaway is the same. I think this portrayal by Sumner drives it home:

Now let’s start down through Dante’s seven circles of Hell:
1.  The US is much richer than Mexico.  So much so that millions of Mexicans will risk the horrors of human trafficking into the US to get crummy jobs picking tomatoes all day in the hot sun.
2.  China in 2011 is still considerably poorer than Mexico.  The Chinese take much greater risks to get here.
3.  China today is so much richer than China in 1997 that it’s like a different planet.  The changes (even in rural areas) are massive.
4.  The China of 1997 seemed like paradise compared to the China of the 1970s.  Throughout Hessler’s book, people keep talking about how horrible things were during that decade and how prosperous they are now (1997 in Sichuan!)
5.  The China of the 1970s was nowhere near as bad as during 1959-61, when 30 million starved to death.
It’s fine to worry about income inequality in the US.  I also worry about this issue.  But it’s important to keep in mind that there is much more to life than income inequality, and much more to the world than the US.  In the grand scheme of things, tinkering with government programs to help the poor, pitiful, beleaguered American middle class isn’t likely to make much difference, at least from a utilitarian perspective.  We need to broaden our outlook.


Emmanuel said...

(1)According to the CIA World Factbook, about 15% of its GDP comes from remittances

I've always wondered who writes these CIA Factbook entries, but more so with a simple factual error like this one any reasonably attentive Econ 101 student should be able to spot.

Remittances are not part of GDP. GNP, which consists of GDP + net factor income from abroad + transfers, does.

Kindred Winecoff said...

Oops. Thanks for noticing. Corrected above.

Alma said...

Now, if we add the time dimension into the equation, and look at the global poverty rates over the last 2.5 million years (I’m putting the Lower Paleolithic as the cut-off date), I’m pretty sure those suckers at Democratic Republic of the Congo would be embarrassed of their complaints

We Are the 1%
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