Divided We Stand

Society is pyramid-shaped.

There are two scales. One represents the distribution of people in the pyramid, while the other represents the distribution of wealth.

So, at the base we have the greatest number of people. I guess the pyramid demonstrates that without the arrow, but I missed the class on creating infographics.

The other arrow is meant to indicate that as we move further up the pyramid, the greater the wealth we encounter. Odd really. Wouldn’t you imagine that with so many more people at the bottom of the pyramid than the top, even allowing for the fact that some people are rich and some are poor, the actual distribution of wealth would largely even itself out?

Not the case though.

Based on figures from 2021, the poorest half of the world’s population possessed just 2% of global wealth.¹

At the same time, the wealthiest 10% of people possessed 76% of global wealth.

That’s not just slightly skewed and imbalanced. That’s entirely out of kilter.

Now granted, the cost of living between countries does vary, which makes it less straightforward to make absolute comparisons. Mr and Mrs H Forclift live in Europe, a decision partly driven by a desire for a better climate than the UK could offer, but also because we’ve been able to choose regions where we can live more cheaply.

However, let’s not worry about the difference in the varying cost of living between countries and focus on the differences in countries themselves.

In 1980, the inequality between nations was at its highest. Since then, that difference between nations has dropped off quite dramatically.

In 2020, less than a third of global inequality was a result of the differences between nations.

That means that inequality within nations has increased significantly across those 40 years.

That’s great news for those developing nations that have benefited from this change, but clearly less so for those in Western nations where the gap has grown.

Zooming in to look at just the UK. In 2022, the poorest 14 million people in the country had to cope with their income falling by 7.5%. At the same time, the UK’s richest 20% of people, about 13.5 million people, benefitted from their income increasing by 7.8%.²

ONS data from 2021, shows that the same top 20% of the UK’s population received 36% of all income, while the poorest 20% had to share just 8% of income between them.

Let’s switch to the USA now and rather than just looking at income, instead consider overall wealth. I’ve already highlighted how wealth between generations is distributed unevenly, but things are about to look a lot more unfair.

At the end of 2023, the top 0.1% of the US population possessed 13.5% of all the wealth.³ That’s about 340,000 people.

Expanding out a bit, just the top 10% of the US population possess 36.1% of the country’s wealth.

Here’s the most striking stat though, the bottom 50% of the population possess just 2.5% of all the wealth.

Let me repeat that so you’re sure it’s not a typo.

The poorest half of all the people in the USA possess just 2.5% of the wealth. And that’s based on data from the US central bank. I’m not just quoting what some flake on Facebook or YouTube is saying.

What’s also striking when you look at the data on the Federal Reserve page is how the wealth distribution has changed. Sure the poorest 50% were always doing pretty badly, possessing just 3.5% of the wealth at the end of 1989.

But if they’ve been getting poorer across the more than three decades since, why have the top 0.1% been getting richer? At the end of 1989, the richest 1% of Americans held 8.6%, compared to 13.9% at the end of 2023.

Surely, if anyone really needed to be gaining more wealth, shouldn’t it be the poorest 50%, not the richest 0.1%?

If the richest 50% of Americans gave 2.66941% of their wealth to the poorest 50%, the poorest group would have twice as much as they have now. And the richest 50% would probably not even notice the difference, as they’d still possess 94.8% of all the wealth.

And this hoarding of wealth by the rich isn’t exclusive to the USA either. In Europe, the divide is slightly less shocking, but only slightly, with the poorest 40% of people possessing just 3% of all wealth.⁴

Which makes the poorest 50% of Britons look positively loaded with their ownership of 5.92% of all the wealth.⁵

Of course, the idea that the wealthy would share some of their wealth to help the poor is a pure fantasy. The reduction in inequality between countries has been driven by the wealthy. Don’t imagine it’s a great act of altruism, though, it’s all about gaining more wealth.

Wealthy entrepreneurs have moved jobs from the West to developing nations because they can pay their workers less in developing nations. That means they can make greater profits and grow their wealth. At the same time, with less jobs in Western nations, employers can pay less, so the poor become poorer. The gap of inequality the result of movement at both ends of the scale.

Before moving on, it’s not just the hoarding of wealth by the rich that is a problem for the rest of us.

The richest 1% of people across the planet were responsible for 16% of the world’s CO₂ emissions in 2019, the same amount emitted by the world’s poorest 66% of people.⁶

Since the 1990s, when the available “carbon budget” to keep temperature rise to 1.5ºC was calculated, the richest 1% have used up twice as much of that budget as the poorest half of the world’s population.

Just one more stat to wind you up, the richest 1% cancel out the benefits of one million wind turbines. Thanks to the rich, we’ve got to build one million wind turbines just to stand still.

So clearly our societies are divided, but there’s more to the divisions between us than just wealth.

The divisions aren’t just between the different levels of society, we have marked divisions between the people at the different levels, though it’s probably most extreme right at the bottom of society’s pyramid.

If you look at the top levels of society, the wealthy generally share views and beliefs. Occasionally we may hear someone with an obscene amount of money say they want to pay more tax, but that’s an oddity. Most of them are focused on gaining more wealth and maintaining the wealth they already have. You can be pretty certain that come any election, the wealthy will almost invariably all vote for a right-leaning party with policies that will protect their wealth.

Common sense would say that we’d see a similar effect at the bottom of society, but left-leaning instead, but that simply isn’t the case.

Logically, the poorest should all vote for parties of the left that promise greater social care and higher taxes on the wealthy so that wealth is shared more equally and society is fairer.

That doesn’t happen though because the poorest of every society allow themselves to be divided. On paper, it’s crazy that those at the bottom vote for right leaning parties that support big businesses as they make the poor even poorer.

In fairness, perhaps poor people vote for the right because they’ve learned it doesn’t make such a great difference either way. The wealthy were given the freedom to transfer jobs overseas by politicians of both the right and the left. We’re now starting to hear politicians talk about bringing jobs back to Western nations and expecting the people to be grateful to them. They don’t make any mention of the fact they’ve been in cahoots for with big business for decades helping them take the jobs away in the first place.

And why are they talking about bringing jobs back now? Well, concerns over the Chinese Communist Party being more powerful and more unpredictable than the big businesses thought must be part of it, but remember that we saw that inequality between countries is falling. That means the cost of workers overseas is getting closer to workers in the West and throw in transport costs on top, suddenly keeping it in the family is looking attractive to the wealthy again.

Anyway, you’ll see I’m not a believer in conspiracy theories, but if I was, I might believe that all the forms of division between the poorest members of society were deliberately designed to keep those at the bottom of the pyramid divided so they don’t look up and wonder why all the money is floating upwards away from them.

Like a huge sleight of hand, our divisions distract us and keep our focus on the wrong things.

If we want to live in societies that are fairer and treat everyone as if they have a right to live a full and fair life, then we have to end the division between us.

Only when the poorest in society stop listening to the lies of the wealthy and fighting each other will they have the strength to change their societies and demand a fair share of the wealth that all of society creates.