U.S. Median Wealth Only 27th in the World

By Kenneth Thomas

As I discussed last week, U.S. median wealth per adult is lower than many other countries. To be exact, it comes in at #27 for 2012, at $38,786 per adult. This is more than 1/4 lower than had been reported by Credit Suisse’s Global Wealth Databook for 2011. I contacted one of the authors, Professor James Davies of the University of Western Ontario, to find out the reason for the big change for the United States as well as the even bigger change for Denmark.

Professor Davies was kind enough to lay out the technical issues for me. First, of all, data for mean wealth is more reliable than median wealth. For rich countries like the United States, there is usually household balance sheet information which provides high-quality information on total wealth and, when combined with population data, wealth per adult.

Wealth distribution data is more difficult to estimate accurately, although it is known to be more unequally distributed than income for every country, as the 2012 Databook reports. The reason Denmark had such a sharp increase in its estimated median wealth is that its wealth distribution survey information was becomingly increasingly questionable, so the authors changed to a different estimation method that is not comparable with previous figures.

Finally, Professor Davies said it was unlikely that U.S. wealth per adult dropped by 1/4 in one year, but that the new lower estimate is more accurate. The research team is still working on ways to make distribution estimates more accurate, such that year-to-year changes will be more meaningful. As he wrote to me, “We haven’t emphasized year-to-year changes in the shape of the wealth distributions since we are still improving our approach to that and making changes each year.”

That leaves the United States still with low levels of median wealth for rich countries. as Les Leopold reported on Alternet.  In total, it trails 20 OECD countries and six non-OECD countries.

These low levels of wealth contribute, of course, to the coming retirement crisis as Americans have low levels of savings to supplement Social Security, while almost half of private sector workers have no retirement plan of any type.  A solution to the crisis will require a tremendous push politically, but otherwise millions of Americans will be condemned to poverty in their old age.

Here is the list of the top 27 countries by median wealth per adult.

Country                        Median Wealth

                                     Per Adult

1. Australia                   $193,653

2. Luxembourg              $153,967

3. Japan                        $141,410

4. Italy                          $123,710

5. Belgium                    $119,937

6. United Kingdom         $115,245

7. Iceland                      $ 95,685

8. Singapore                  $ 95,542 (non-OECD)

9. Switzerland                $ 87,137

10. Denmark                  $ 87,121

11. Austria                     $ 81,649

12. Canada                    $ 81,610

13. France                     $ 81,274

14. Norway                    $ 79,376

15. Finland                    $ 73,487

16. New Zealand            $ 63,000

17. Netherlands              $ 61,880

18. Ireland                      $ 60,953

19. Qatar                       $ 57,027 (non-OECD)

20. Spain                      $ 53,292

21. United Arab Emir.     $ 47,998 (non-OECD)

22. Taiwan                     $ 45,451 (non-OECD)

23. Germany                 $ 42,222

24. Sweden                   $ 41,367

25. Cyprus                     $ 40,535 (non-OECD)

26. Kuwait                     $ 40,346 (non-OECD)

27. United States           $ 38,786

Cross-posted from Middle Class Political Economist.

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Source: U.S. Median Wealth Only 27th in the World

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