Defining the world's richest 1%

A column at CNN Money reminds readers that even if they are not among the richest 1% in the United States, they may be in the richest 1% in the world.  You may be in this group (I am not).

It only takes $34,000 a year, after taxes, to be among the richest 1% in the world. That's for each person living under the same roof, including children. (So a family of four, for example, needs to make $136,000.)..

In fact, people at the world's true middle -- as defined by median income -- live on just $1,225 a year. (And, yes, Milanovic's numbers are adjusted to account for different costs of living across the globe.) In the grand scheme of things, even the poorest 5% of Americans are better off financially than two thirds of the entire world.

The sentiment is correct, of course, and many Americans need this kind of reminder.  But I would suspect the data as being a soft in several regards.  The first is the equating of "income" with "wealth."  There are many people with amassed wealth who have little current income; when I lived in Kentucky I often met old men from Eastern KY who lived on Social Security checks that would have represented several hundred dollars a month, but who owned parcels of land worth hundreds of thousands of dollars.

Secondly, the economist says the data are "adjusted for different costs of living," but that is an enormously complicated task - even just within a nonhomogenous country like the U.S. where a given income might represent "wealth" in one ZIP code but be marginal for living in another.

And finally, having a high current income may not place one "better off financially" than someone with a lower income living in a country with better health care and social safety nets.

Via Neatorama.