So the lowest 40% essentially have no wealth at all. Just to ballpark that number, it's pretty close to the percentage of the population that rents. Wow.

Someone on the source post commented:

"This isn’t as surprising as it first appears because the chart is showing wealth distribution, not income distribution. I presume that people in the bottom 40% are barely able to accumulate any savings and hence have almost no wealth and probably few assets. A chart showing income distribution would probably not be quite as skewed."

That would be an interesting follow-up. Income vs. Wealth.

Folks in the lower quintiles live hand-to-mouth and can't accumulate things like investments or homes or, really, many durable goods with any sort of long-term value (e.g., washing machine).

I wonder how much of this is due to the power of zero. Most people, given the option to break down "100", will not assign "0" to a group of people, and as likely shown on the graph will give at least a nominal number like 1, 2, or 3. It seems like people very consciously chose 2 or 3 for the lowest group, then 4, 5, or 6 for the next group. (No group has the bottom two add up to over 10). To get a graph similar to the actual results, you would basically have to give BOTH of the bottom groups scores of 0. Highly unlikely in any survey of a representative population.

I do think it's a powerful message that, as TJ said, the lowest 40% essentially have no wealth at all. I just think the underestimation is more likely due to survey issues rather than actual perception of distribution.

This statement strikes me as inaccurate...

"Americans imagine the poor to have many, many more financial resources than they actually do."

... as this graphic is about WEALTH, not resources. As another pointed out wealth is not income, & is certainly not "resources." The resources for the poor are not going to be reflected as wealth: for example, food, rent & utility subsidies would be considered resources but not income or wealth.

A poor person could (in theory) utilize many resources that a lower-middle class person would be paying for, which could (in theory) result in a higher net income. (A study was released recently that a person grossing $30k might, under certain circumstances, net more than a person grossing $45k)

I think it's interesting that all the groups surveyed arrived at similar estimates... I would have thought that as you got closer to the bottom 20% you might have a better idea how they actually lived but that doesn't seem to be the case. (Though I guess ".<

Looks like the bottom 20% need to do a better job of saving their money and creating stable households to raise children in.

Wealth is generally a more useful measure of poverty than income, because wealth grants economic power and privilege; the power to make decision which significantly impact the lives of others and the privilege to choose how the decisions of others will affect you.

Subsistance farmers sometimes have no income, but they are not necessarily impoverished because they could be perceived as having 'wealth' in the form of access to land, a means of producing food, etc. Whereas people with some income can still be impoverished if their position in the economic power-hierarchy prevents them from making significant decisions in their own life and weathering the decisions made by others with more power and privilege.

This discussion takes on a new dimension when framed in a global perspective. The legal poverty threshold for a 1-person family unit in the U.S. (as per the Dept. of Health of Human Services) is about $10,000. Yet, someone who has a $10,000 a year income is in the top 14% of income earners on the planet (1). When you factor in non-income resources (social services, free public education, Earned Income Tax Credits, etc) that many individuals also have access to, the global gap widens even more.

As per the U.N., there aren't really many people under the global poverty level in the U.S. The U.N. poverty threshold is about $1 a day or $300-400 a year. Many vagrants in the U.S. are able to make more than that. When you consider the amount of government and social resources that go into assistance for the homeless in the U.S., I would put forward that there is a pretty decent chance that most vagrants in the U.S. consume more resources than wide swaths of the global agricultural and industrial workforces.

In an era of global commodity markets, the cost of living is often higher in the Third World vis-a-vis the average wage as well. See the recent shortages in food staples in places like the Philippines that are otherwise food exporters.

This is one of the reasons why I've always been skeptical about most strains of feminism (not pertinent to this particular blog post, I understand, but pertinent to this blog as a whole I believe). I think most of the social advantages that women in the U.S. have over women in the Third World are primarily due to differential rates of economic development and global inequality between nations, not due to advancements or structural changes in gender relations. For example, many upper and middle-class women in the U.S. are able to lessen the burden of housework by hiring cleaning women, the majority of whom are immigrants from the Third World and many of whom work in what some might call the "informal sector."

Just some food for thought ... I definitely think this blog would benefit from a more international perspective.

(1)http://www.globalrichlist.com/index.php

This is not really surprising given the massive amount of propaganda designed to convince people that they are middle class. The reality is that income inequality is huge.

For those who dislike the Unrestrained Capitalism, chew on this:
1) US has at-will employment relationship (unique in the Developed world) you can be fired for any reason, no reason, etc... (with exceptions of age, racial, gender, ethnic reasons, you get constitutional protection for those). This is taken to the extent that even a handwritten signed contract by your boss saying you have life time employment is often disregarded by courts.
2) Almost zero regulation of the economy. There are close to 1 million lawyers in America. When a company designs a faulty product the may or may not get sued, when they do the market adjusts if the cost of the lawsuits is high enough, if not the behavior continues. In most countries the government takes a much more active role regulating drugs, pollution, etc...
3) No or very little in the way of a social safety net. All developed countries have universal health care (government run insurance for everyone). The US does not.
4) Massive privatization, the US privatizes far more services than any country in the world. If you can privatize it they will. This despite the fact that most often private companies are less efficient, as the Health Care industry proves if you care to examine the facts and figures.
5) No national media source. UK has the BBC, Canada has CBC, Japan has one, Korea, France, etc... the US does not. The closest thing is NPR, which is funded by Corporations like Exon Mobile.
6) US corporate case law says it is illegal for companies to act in any way other than to maximize the value of shareholders.
7) If your in the least bit in favor of government programs you are a communist. For many Americans communism, socialism, social democracy, welfare state, etc.. are all Communism. There is only the freedom of being a real American or Communism. So Sweden is communist, so is Japan, so is China, etc...

What should you call this in shorthand? I would say unrestrained capitalism, restrained capitalism is something Adam Smith might advise, or Keynes. But, alas for many Americans they would be Communists and they are evil.

I'm skeptical of these numbers. What about people with negative wealth? Mortgages, student loans, credit card debt, etc. If I were to buy a house, I'd have negative wealth for the next 10+ years (at that point I start owing about as much as I own in equity).

I'd be interested to see a graph showing what people estimate to be the actual average income (or wealth) to be for each of the five quintiles, rather than just their proportion of the total. That'd probably be more meaningful, since I don't reckon most people are good enough with numbers to work out the proportions accurately. Maybe i underestimate people's maths skills, but that would be my guess!

Why are the correspondent and the blogger credited, but not the researchers?

The challenge is all the data comes from 2004. Before all the chaos. It also does not look at salary distribution. According to a Stanford study you should never talk income distribution. It shows how the bottom 50% blow the money or don't put it into things that count as net worth, like homes. Plenty live in apartments and drive $40K cars. And if it is way off the bail out only served to preserve it. and Taxes will never correct it

TAX the RICH! http://www.facebook.com/pages/Tax-the-Rich/196563720368212