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According to the 20/80 rule, in a given group, the top 20% are responsible for 80% of whatever factor you’re studying, good or bad. The classic example is in a
by sixQuarks 6y ago
According to the 20/80 rule, in a given group, the top 20% are responsible for 80% of whatever factor you’re studying, good or bad.
The classic example is in a sales group. The top 20% of salesmen bring in 80% of the business.
In customer support, the top 20% of customers take up 80% of a company’s time.
According to this article, the total wealth in this country is 112 trillion. If you applied the 20/80 rule to this figure, and then keep applying the 20/80 rule until you have 1% remaining, then the “natural” outcome should be that the top 1% control over 70 trillion in wealth. That’s twice as high as what we actually have.
- db48x 6y agoExactly. Also you have to remember that some people are older than others. If everyone properly planned for their own retirement, then 65-year-olds would own >80% of all assets in the country, even if everyone had the same earnings for their entire life. Then over the rest of their life they would sell off those assets to pay for their daily expenses and travel while retired. The buyers would all be young people saving up for retirement. Wealth inequality is the least surprising thing ever. But most people don't ever do math, so it makes for good clickbait.
- harimau777 6y agoMany people don't ever have the opportunity or training to properly plan for retirement.
- icedchai 6y ago"The Millionaire Next Door" should be required reading in high school.
- Scandiravian 6y agoYou write about a system that doesn't exist (everyone earning the same), then point out that wealth inequality is not surprising and that articles like this "makes for good clickbait", but what's your point? Is it that we should simply ignore wealth inequality and the societal issues it generates?
- db48x 6y agoThe point is that wealth inequality would still exist, even if every person in the world earned the same amount in their lifetime. The equality of outcomes of giving everyone the same amount of money would not lead to the equality of outcomes of everyone having the same amount of wealth. You can only get wealth equality by taking away wealth from everyone. That's not going to fix any "societal issues", it will simply cause more problems. See also all past attempts.
- newfeatureok 6y agoI don’t see your point at all - even if you were to control for any age of your choosing I’m sure you’d still see similar distributions. Your last point also requires some evidence since it is extreme.
- Scandiravian 6y agoNo one has at any point said that the goal is for everyone to have the same amount of wealth, so I'm not going to argue against, what's clearly a straw-man For your last point I'll have to go with a "citation needed" The Scandinavian countries and many other European countries in general, have a high level of wealth redistribution and have higher education levels, higher voter turnout, less crime, and higher standards of living than the US
- sanp 6y agoThe 80/20 "rule" is not indicative what should be the right distribution. Also, wealth concentration has worsened over time. So, there was a time when it wasn't this concentrated and without a somewhat more equitable distribution we will see societal problems. The 80/20 rule is just a heuristic and not meant to be a guide for how things should actually be.
- sixQuarks 6y agoI never said it should be used as a guide for how things should be. Merely pointing out that many systems naturally result in this type of distribution. We have to realize this is a natural outcome if we don't actively try to make things more equitable. Not just people, but companies as well. For example, the top 10 largest publicly traded companies make up 30% of the total value of the S&P500.
- newfeatureok 6y agoI don't know why people keep bringing up the 20/80 rule as if it's some sort of cosmic law. Suppose on some other planet with a civilization that evolved from something other than monkeys the "rule" is 100/100, meaning everyone contributes equally. On that planet I guess you'd be arguing that there's something wrong with the world considering that the Top% of Borg Households Hold 15 times more wealth than the bottom 50%, but everything is supposed to follow the "100/100 rule."