Income Inequality – Here’s How Much Money You Need To Earn To Join the Top 1% in Your Country
Income inequality is already enormous and will continue to grow in the years to come.
Over the past eighteen months, more than 30% of all U.S. dollars currently in circulation have been printed out of thin air. The Fed decided to adopt an ultra-aggressive monetary policy to massively support the American economy in the face of the COVID-19 pandemic.
As the US dollar is at the center of the current monetary and financial system, all other world central banks have adopted the same approach as the Fed.
More than 12,000 billion dollars were printed out of thin air in a few months. This has triggered great monetary inflation that will have disastrous effects on wealth inequalities in the world. This phenomenon has a name: the Cantillon Effect.
It is something well known that was observed and highlighted by the economist Richard Cantillon as early as the 18th century.
A strong disparity between the 1% club and the middle-income workers within the richest countries
In addition to these growing wealth inequality problems, we can also expect that high inflation and the coming economic recovery will also increase income inequality in most countries of the world. At the heart of these income inequality is a question that many people frequently ask themselves:
How much money do you have to earn to join the 1% club in my country?
Answering this question also shows the large income disparities within the richest countries in the world. So it's something very interesting that is highlighted within an infographic revealed by the website How Much :
This infographic, using data from the World Inequality Database, highlights that the UAE has the most inequitable income distribution. To join the 1% club, you need to have an annual income of $922K. This is in contrast to the $22K annual income of the top 50% of earners on average.
The top 1% earn 41 times more than those in the 50% club.
The richest workers in America earn 13 times more than middle-income workers
In America, the top 1% earn 13 times more than the top 50% with an average salary of $488K versus $38K for the top 50%. The third highest annual salary country to reach the 1% club is Bahrain with $485K.
It is interesting to note a certain uniformity in Europe between the three largest economic powers, Germany, the United Kingdom, and France, regarding the average salary of the top 50% at $36K. The difference is however in the average salary to join the 1% club:
Germany - $277K
United Kingdom - $248K
France - $221K
At the opposite end of the spectrum of these data, India is among the poorest countries with an average annual salary of $4K to reach the 50% club and an income level of $77K to be part of the top 1%.
It is interesting to observe the inequalities between countries with finally very high levels for the top 50% in countries like America, Germany, Great Britain, or France. Middle-income workers in these countries earn respectively 3 and 7 times more than those in Brazil and South Africa.
Another disparity to keep in mind concerns the services provided free of charge by some countries to their citizens
To these raw data on income inequalities, which only show 14 major countries here, we can add different types of services that some countries provide for free to their citizens. For example, the French have a guaranteed retirement pension as well as social security, while Americans do not have access to these types of benefits directly outside of certain companies.
To return to the situation in America, we can also note a strong disparity between the different states of the country that we do not find in a country like France where the situation for workers is more balanced.
To be part of the 1% club in Connecticut or New York State requires an average annual salary of more than 2.2 million dollars. The 50% club is accessible at an average of $60K. On the other hand, you can be part of the 1% club from $350K of annual income in states like Maine or Mississippi.
Final Thoughts
In conclusion, income inequality is high in the world. The 1% remain privileged and have a growing gap with middle-income workers. The most worrying thing here is that the situation is bound to get worse in the years to come, as the data I have just revealed dates back to 2020.
After the pandemic that the world has been going through for several months, the situation will necessarily have worsened when the new figures for 2021 are known.
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