Tuesday, November 14, 2017

Top 1% of Wealthy Own 50% of the World's Income Creating Class Instability

A report by Credit Suisse indicates that more and more of the world's wealth is concentrating in fewer hands.  This trend appears to be more dire over time with people on the bottom part becoming poorer and the people on the top becoming wealthier. The risks associated with this divergence is political instability and rapid change. Yet there are things legislators can do to change the troublesome trend.

Credit Suisse expects to see 22% rise in millionaires by 2022 increasing from 36 million people to 44 million people. While there will be some moving to the top there is less growth on the bottom leaving 70% of the worlds population with less than $10K.

While 3.6 billion poor might seem like a remote problem for people in poor countries to deal with the problems are very much at home in the U.S. It is expected that Millennials will not have the same access to wealth, homes, pensions, and other items that were so common to the Baby Boomers.

A highly educated generation mixed with few to no opportunities creates a disaster decades down the road as frustration grows. Without opportunity that generation will impact the way their children think and influence the opportunities of the generation behind them.

One must wonder what the impact of declining influence of American financial strength mixed with declining opportunities both within the U.S. and across the globe. Such situations have fostered class struggles seen in major societal upheavals throughout history.

The very premise of the U.S. is that people have opportunity to change and grow to their maximum potential. That is becoming increasingly unlikely as large concentrations of wealth and political influence seek to ensure the "deck is stacked".

However, not all is lost. The American system is adaptable and the core principles of the nation rest on the inherent freedoms of the individual. Legislative changes that include increasing opportunities as well as supporting the development of small business can help ensure that income is distributed more evenly among those who are working hard and acting like entrepreneurs to achieve financial freedom. The economy can improve its innovative capacity through small business while creating enough variability in the system to keep it fluid and changing.

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