Income is actually a more sensible measure because it gives a better idea of your “lifetime wealth”, the total amount of stuff you could ever buy, than your current wealth. A lot of stupid talk about inequality uses wealth statistics that include debt, which gives you all the “Trump is richer that 37% of America households” bullshit articles. A young lawyer with $100,000 in student debt is richer in all meaningful senses than a hobo with $20 in his pocket, but not if you count “cash wealth + debt”. And since it’s really really hard to measure someone’s actual wealth, which includes things like the present value of education in future earnings, income is a reasonable proxy.
Income is actually a more sensible measure because it gives a better idea of your “lifetime wealth”, … than your current wealth.
Consumption is an even better measure, since people tend to smooth it both over time (e.g. by saving or taking loans as appropriate) and across individuals in any given social group (by engaging in informal social insurance, especially in poorer countries with no formalized welfare provision).
That’s a good point, but not very useful for GWWC. What was your consumption last year? It would take people a while to figure it out, but almost everyone knows their income off the top of their heads. GWWC’s goal is to make a salient point that westerners are rich. An American making $30,000 a year doesn’t feel rich, but they actually are rich, rich enough to improve many lives of the global poor without a serious deduction in their standard of living. Income and consumption (relative to other humans) rarely differ from each other enough to change that conclusion.
I disagree. I don’t think it gives you a better idea of your “lifetime wealth” either. Income is basically the first derivative of wealth and tends change, a lot.
A young lawyer with $100,000 in student debt is richer in all meaningful senses
So how about the same lawyer pre-graduation, when he was a law school student? His income was negative at that point.
actual wealth, which includes things like the present value of education in future earnings
You need to define “wealth” better before you go there.
A more basic problem is that “rich” generally refers to wealth and they are talking about incomes.
What exactly is income is also subject to discussion, but I don’t think that dividing GDP by population will give you a right number.
Income is actually a more sensible measure because it gives a better idea of your “lifetime wealth”, the total amount of stuff you could ever buy, than your current wealth. A lot of stupid talk about inequality uses wealth statistics that include debt, which gives you all the “Trump is richer that 37% of America households” bullshit articles. A young lawyer with $100,000 in student debt is richer in all meaningful senses than a hobo with $20 in his pocket, but not if you count “cash wealth + debt”. And since it’s really really hard to measure someone’s actual wealth, which includes things like the present value of education in future earnings, income is a reasonable proxy.
Consumption is an even better measure, since people tend to smooth it both over time (e.g. by saving or taking loans as appropriate) and across individuals in any given social group (by engaging in informal social insurance, especially in poorer countries with no formalized welfare provision).
That’s a good point, but not very useful for GWWC. What was your consumption last year? It would take people a while to figure it out, but almost everyone knows their income off the top of their heads. GWWC’s goal is to make a salient point that westerners are rich. An American making $30,000 a year doesn’t feel rich, but they actually are rich, rich enough to improve many lives of the global poor without a serious deduction in their standard of living. Income and consumption (relative to other humans) rarely differ from each other enough to change that conclusion.
Correct.
Notice the goal: to make a point. Notice what it is not: to gain understanding by exploring the complexities of “wealth”.
I disagree. I don’t think it gives you a better idea of your “lifetime wealth” either. Income is basically the first derivative of wealth and tends change, a lot.
So how about the same lawyer pre-graduation, when he was a law school student? His income was negative at that point.
You need to define “wealth” better before you go there.