The New York Times reviews The Haves and the Have-Nots, what appears to be a fascinating new book from World Bank economist, Branko Milanovic. In addition to the review, the Economix blog features this extraordinary representation of world income distribution by country:
Milanovic has broken income (adjusted for purchasing power) by country down into twenty “ventiles.” So the lowest five percent of income earners are in the first ventile and the richest five percent are in the top ventile. What this piece shows is that the poorest of the poor in America are in the 70th percentile of world income. Compared with India — the average American in that first ventile has as much income (adjusted for purchasing power) as the richest Indian ventile.
I find that astonishing.
I also note with interest that there is a very steep ascent of the American distribution, indicating the poor here are really, really poor in relative terms, but the rest of the country is in pretty good shape. The median income in the US in comfortably in the top 10% of world income.
Well, I’m pretty happy, but maybe that’s just me.
I am guessing that the bottom of the Brazil, China and India lines is subsistence level. So, according to this, Schumpeter was right, capitalism could and has solved the problem with unemployment (in that the unemployed don’t have to go without the basics), and poverty has been practically eliminated in the US—except people don’t know that. The graph is interesting, even if I am very suspicious of this business of comparisons in international dollars.