5 ms·

How much of America's wealth is that?

eck 13y ago
Not much. A fraction of Americans have negative net worths. If you have no debts and a nickel in your pocket, you're worth more than all of them put together. It's an oft-used misleading statistic.
- KnightHawk3 13y ago
  From a quick google, then reading some wikipedia then linking the source, it seems its about 5~% of households http://www.federalreserve.gov/pubs/oss/oss2/papers/concentration.2001.10.pdf http://www.federalreserve.gov/pubs/oss/oss2/papers/concentra...
- dwiel 13y ago
  Also, if your net worth is -$0.05, you're worth more than all of those with less than you combined! Not only that but as someone with a net worth of -$10k, you too are worth more than the bottom 5% [1] of Americans combined as well. I guess a more interesting metric would be to count people with debt in these combined statistics as having nothing rather than having negative net worth, even if they do. [1] https://news.ycombinator.com/item?id=6527192 https://news.ycombinator.com/item?id=6527192
  - tobr 13y ago
    So you could craft a headline targeting the individual with the highest debt and still say "this greedy scumbag has more money than n% of the population combined", where n is the percent of people who have negative wealth.
    - delinka 13y ago
      Either you have logicked incorrectly, or I cannot read you. (I'll take the blame for the latter...) Care to clarify with some numbers?
      - Livven 13y ago
        If you have $100K in debt, you have "more" than 20 people with $10K each in debt combined.
      - nilkn 13y ago
        He's saying that if you add up a bunch of negative net worths, eventually the sum is going to be very negative, even if each individual number was small. In particular, he's talking about the case where each of those numbers that you add up is individually smaller than your personal debt, but their sum exceeds your personal debt. Therefore, it looks like you are wealthier than all of those people combined (since your worth exceeds the sum of all theirs!).
        tedunangst 13y ago
        Not to mention, that by having a negative net worth, you are a part of the bottom X%. But your debt is less than the sum of all debt, by definition. So 100% of Americans have more net worth (individually) than the bottom 5% combined.
    - dwiel 13y ago
      You could even include some people who do have wealth since it will get canceled out by those who have negative wealth.
  - hedgew 13y ago
    If you discount households with negative net worth, the Walmart heirs' wealth is still equal to the combined net worth of the bottom 28%, which translates to about 33 million households. Of course, wealth is not the only statistic we should study, as many households with little wealth may still have decent income. There are many factors to consider, but the simple fact is that a single family owns more than a third of Americans - a powerfully descriptive statistic of wealth inequality.
    - twoodfin 13y ago
      the Walmart heirs' wealth is still equal to the combined net worth of the bottom 28%, which translates to about 33 million households. Let's assume the Walmart heirs acquired that money in absolutely the worst possible way: They went out and flat stole it from these 33 million households. If you took it from the Waltons and gave it all back, each of those households would receive a whopping $3,000 on average. Now, that's not nothing, but as a one time "refund" of wealth generated over decades it's not particularly impressive. If your household of four is at the poverty line, it would up your income by about 15% for one year. And of course they didn't steal it. And I suspect that over only a decade (Walmart has been in business generating that wealth for five), the average low net worth household probably saved much, much more than $3,000 by shopping at Walmart. That's a win-win, and it's how an economy grows.
      - wavefunction 13y ago
        >>the average low net worth household probably saved much, much more than $3,000 by shopping at Walmart. That's a win-win, and it's how an economy grows. Dunno, it doesn't seem to be win-winning. Maybe because the pressures exerted by Walmart to get those low-low prices has forced the formerly decently paying manufactoring jobs overseas. So the guy who used to work at a factory now works at McDonalds making 33% of what he made without any decent benefits.
        twoodfin 13y ago
        Of course it's a win-win. The money those low net worth households save doesn't disappear: The poor spend most of their income, and as a result, the money that was going to a more inefficiently manufactured product is now being spent on something more economically competitive. A burrito at Chipotle or a pair of sneakers or an Android phone. Nobody's entitled to a job, but when Walmart trims inefficiencies, it ensures that consumer spending is going towards the products of more efficient producers at their own stores and elsewhere, adding jobs where they can be the most productive.
  - yummyfajitas 13y ago
    You are also worth more than 6 people with net worth of -$0.01, each of whom individually has more than you.
- dreamfactory 13y ago
  So what? Those people are still part of the economy. e.g. if 95% of people had net negative wealth it wouldn't mean that they could be discounted and you'd only look at the remaining 5% for any meaningful view of how the wealth that society produces is distributed.
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eck 13y ago

Not much. A fraction of Americans have negative net worths. If you have no debts and a nickel in your pocket, you're worth more than all of them put together. It's an oft-used misleading statistic.

KnightHawk3 13y ago
From a quick google, then reading some wikipedia then linking the source, it seems its about 5~% of households http://www.federalreserve.gov/pubs/oss/oss2/papers/concentration.2001.10.pdf http://www.federalreserve.gov/pubs/oss/oss2/papers/concentra...
dwiel 13y ago
Also, if your net worth is -$0.05, you're worth more than all of those with less than you combined! Not only that but as someone with a net worth of -$10k, you too are worth more than the bottom 5% [1] of Americans combined as well. I guess a more interesting metric would be to count people with debt in these combined statistics as having nothing rather than having negative net worth, even if they do. [1] https://news.ycombinator.com/item?id=6527192 https://news.ycombinator.com/item?id=6527192
- tobr 13y ago
  So you could craft a headline targeting the individual with the highest debt and still say "this greedy scumbag has more money than n% of the population combined", where n is the percent of people who have negative wealth.
  - delinka 13y ago
    Either you have logicked incorrectly, or I cannot read you. (I'll take the blame for the latter...) Care to clarify with some numbers?
    - Livven 13y ago
      If you have $100K in debt, you have "more" than 20 people with $10K each in debt combined.
    - nilkn 13y ago
      He's saying that if you add up a bunch of negative net worths, eventually the sum is going to be very negative, even if each individual number was small. In particular, he's talking about the case where each of those numbers that you add up is individually smaller than your personal debt, but their sum exceeds your personal debt. Therefore, it looks like you are wealthier than all of those people combined (since your worth exceeds the sum of all theirs!).
      - tedunangst 13y ago
        Not to mention, that by having a negative net worth, you are a part of the bottom X%. But your debt is less than the sum of all debt, by definition. So 100% of Americans have more net worth (individually) than the bottom 5% combined.
  - dwiel 13y ago
    You could even include some people who do have wealth since it will get canceled out by those who have negative wealth.
- hedgew 13y ago
  If you discount households with negative net worth, the Walmart heirs' wealth is still equal to the combined net worth of the bottom 28%, which translates to about 33 million households. Of course, wealth is not the only statistic we should study, as many households with little wealth may still have decent income. There are many factors to consider, but the simple fact is that a single family owns more than a third of Americans - a powerfully descriptive statistic of wealth inequality.
  - twoodfin 13y ago
    the Walmart heirs' wealth is still equal to the combined net worth of the bottom 28%, which translates to about 33 million households. Let's assume the Walmart heirs acquired that money in absolutely the worst possible way: They went out and flat stole it from these 33 million households. If you took it from the Waltons and gave it all back, each of those households would receive a whopping $3,000 on average. Now, that's not nothing, but as a one time "refund" of wealth generated over decades it's not particularly impressive. If your household of four is at the poverty line, it would up your income by about 15% for one year. And of course they didn't steal it. And I suspect that over only a decade (Walmart has been in business generating that wealth for five), the average low net worth household probably saved much, much more than $3,000 by shopping at Walmart. That's a win-win, and it's how an economy grows.
    - wavefunction 13y ago
      >>the average low net worth household probably saved much, much more than $3,000 by shopping at Walmart. That's a win-win, and it's how an economy grows. Dunno, it doesn't seem to be win-winning. Maybe because the pressures exerted by Walmart to get those low-low prices has forced the formerly decently paying manufactoring jobs overseas. So the guy who used to work at a factory now works at McDonalds making 33% of what he made without any decent benefits.
      - twoodfin 13y ago
        Of course it's a win-win. The money those low net worth households save doesn't disappear: The poor spend most of their income, and as a result, the money that was going to a more inefficiently manufactured product is now being spent on something more economically competitive. A burrito at Chipotle or a pair of sneakers or an Android phone. Nobody's entitled to a job, but when Walmart trims inefficiencies, it ensures that consumer spending is going towards the products of more efficient producers at their own stores and elsewhere, adding jobs where they can be the most productive.
- yummyfajitas 13y ago
  You are also worth more than 6 people with net worth of -$0.01, each of whom individually has more than you.
dreamfactory 13y ago
So what? Those people are still part of the economy. e.g. if 95% of people had net negative wealth it wouldn't mean that they could be discounted and you'd only look at the remaining 5% for any meaningful view of how the wealth that society produces is distributed.
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