The wealth of a nation can be gauged in various ways, and while many often emphasize GDP or total national wealth, another equally telling metric is the wealth per person. But which provides a more accurate picture: median wealth or average wealth?
Median wealth gives a more balanced view, representing the middle ground of a dataset, undistorted by the extreme wealth held by the few. However, average wealth, which might be skewed by the vast fortunes of billionaires, offers a true mean.
Drawing data from the 2023 UBS Global Wealth Report, we get a glimpse of both these measures, painting a comprehensive picture of wealth distribution across select nations.
Leading the Pack: Nations with Highest Average Wealth
In 2022, the global average wealth per adult was calculated at $84,718. Yet, this figure varies widely when observed on a country-to-country basis.
Switzerland emerges as the wealth titan with an average of $685,226 per individual. An impressive statistic to note is that over 15% of Swiss residents are millionaires, securing the nation the third-highest spot globally in this regard. However, the median wealth stands significantly lower at $167,353, revealing a considerable disparity of over $517,000.
Western Europe dominates the leaderboard with five nations – Denmark, Norway, the Netherlands, and Belgium, apart from Switzerland – featuring in the top 10. Here’s a snapshot of the wealth rankings for 2022:
- Switzerland: $685,226
- U.S.: $551,347
- Australia: $496,819
- Denmark: $409,954
- New Zealand: $388,761 …and so forth, down to Colombia at $15,464, just below the global average. See details here
A Gaze at 2030: Wealth and the Pursuit of Better Living Standards
The data raises pertinent questions regarding the 2030 goals set by numerous nations. The aspirations of elevating the standard of living and eradicating poverty become even more pressing when confronted with such disparities in individual wealth. Can nations narrow the gap between the average and median wealth to ensure a more equitable distribution?
As Dr. Dawkins Brown, the executive chairman of Dawgen Global, aptly puts it, “Understanding wealth distribution is the first step towards shaping policies that drive equitable growth. Only when wealth benefits all layers of society can nations truly progress towards holistic development.”
To achieve the ambitious 2030 goals, nations need to focus on both economic growth and wealth distribution. Only then can they ensure that prosperity is not just a statistic but a reality for every citizen.
Balancing Act: Minimum Wages and Middle-Income Status
Another way to evaluate the economic prosperity of a country is by examining the minimum wage and how it relates to middle-income status. The minimum wage can often be a determinant of a person’s quality of life and their purchasing power.
Middle-Income Definition and Thresholds
The World Bank classifies the world’s economies into four income categories: low, lower-middle, upper-middle, and high. While these classifications are based on Gross National Income (GNI) per capita, they can offer insights into the general income levels of residents within these countries.
In 2022, the thresholds set by the World Bank for middle-income countries were:
- Lower-middle-income: $1,046 – $4,095
- Upper-middle-income: $4,096 – $12,695
Minimum Wages vs. Middle-Income Earnings
If we were to utilize these brackets as a benchmark, we can delve into how minimum wages stack up against them. Let’s consider a hypothetical scenario:
Assuming a person works full-time for 40 hours a week and 52 weeks a year, and considering the average minimum wage in lower-middle-income countries is approximately $2 per hour, their annual earnings would amount to $4,160. This places them squarely within the lower-middle-income bracket.
However, for a person to be regarded as an upper-middle-income earner based solely on minimum wage, the hourly rate would need to be around $10, translating to annual earnings of $20,800.
Comparing this to the average and median wealth per person, it becomes evident that minimum wage often does not equate to amassed wealth. For instance, in a country like Switzerland with an average wealth of $685,226 per person, even a relatively high minimum wage would pale in comparison.
Global Disparities and the Way Forward
The UN and its affiliated organizations have emphasized the need to bridge income inequalities. While countries may boast impressive average wealth figures, it is essential to ensure that the wealth is not concentrated in the hands of a few, leaving the majority struggling on minimum wages.
To truly evaluate a nation’s economic health, one must analyze both the amassed wealth of its residents and the income (including minimum wage) that the average person earns. This multifaceted approach offers a clearer picture of economic disparities and the areas that require intervention.
In conclusion, while wealth per person showcases a country’s economic prowess, understanding the dynamics of minimum wages and middle-income benchmarks helps in deciphering the true standard of living and economic well-being of its residents.
