The 80/20 rule also says that 20% of the top 20% has 80% of the 80% of the total wealth. If you apply it three times, you get (0.2)^3 = 0.8% of the population h

The 80/20 rule also says that 20% of the top 20% has 80% of the 80% of the total wealth. If you apply it three times, you get (0.2)^3 = 0.8% of the population has (0.8)^3 = 0.51% of the wealth. Which is even worse than what you see in the graph. Also, your 7% number is wrong, from the graph it seems the poorest 80% has about 16%, which is less than the one predicted by 80/20, but not by much. Again, I am not saying this is fair. The Pareto principle doesn't say this is healthy for a society, only that it is common.