Median Wealth: American Unexceptionalism

THis is usually the kind of post I just mention in the daily links, but Kenneth Thomas over at Middle Class Political Economist (a very good blog by the way) draws our attention to this depressing (if you’re a U.S.-ian) figure showing median household wealth for the OECD nations:

medianwealth_edited
(original from here)

Thomas raises two possible explanations. First, income inequality leads to wealth inequality. Since the U.S. is a very unequal society compared to most other countries, this would be reflected in median wealth (though Sweden and Denmark have low median wealth, accompanied by expansive safety nets and public services). The other explanation is that most other countries are civilized and do not require students to pile on massive amounts of debt to receive a college or advanced degree. I would also add that the lack of a comprehensive safety net and healthcare system means that various catastrophes and setbacks can also lead to high levels of debt (awesome).

There is one other thing to note–Thomas again (boldface mine):

One final point: Matthews skewers the claim by Globe and Mail author Michael Adams (whose firm conducted the study discussed in his article) and later commenters on both sides of the border who accepted Adams’ claim that this was a historical first. As he shows with U.S. and Canadian government data, Canada’s median household net worth was significantly higher in 2004-5, before the crisis, than here in the U.S. Given the huge disparities between the United States and some of the other countries, it is likely that net worth per adult has been higher in a number of these countries for quite some time. These data reflect trends that have been developing for a long time, and are not purely driven by the economic crisis or by any single set of policies. But they make for sobering reading, and deserve more than the superficial analysis most of the U.S. press has given them so far.

No doubt another dose of austerity and fiscal responsibility will fix this. If that fails, I say, cut Social Security further.

Yes, that is snark.

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5 Responses to Median Wealth: American Unexceptionalism

  1. JohnV says:

    I realize I’m missing the point, but why is Australia’s value so much greater than the others?

  2. anthrosciguy says:

    Right now Australia is around the peak of a housing bubble. There’s some of that to Canada as well, but the data from a few years ago shows that isn’t the whole story about Canada v USA, so I’m really happy to see that 2004-5 data comparison. Australia is also having a mining boom, but the story here is that this is a median comparison, which therefore compares inequality as well as overall wealth. Also, even if the housing bubble bursts in Australia, dropping to near US levels would be really unlikely.

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  4. Misaki says:

    Australia has a minimum wage of about 15 AUD.

    Some countries also might use a different system for retirement where people are expected to always save their own money, which would be included in wealth.

    For anyone who cares about ineqality, you have two choices: 1) support higher taxes, on everyone probably to avoid claims of “class warfare”. 2) Support this petition. https://petitions.whitehouse.gov/petition/endorse-drama-free-solution-high-unemployment/XBqSWcX6

    For people who don’t actually care about inequality but like to pretend to, neither of those actions are necessary.

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