10 Facts About Money That Will Piss You Off
It doesn’t take a rocket scientist to realize there is a high level of frustration among Americans these days. After the Great Recession receded, many people had trouble finding work — and many others had trouble finding work that they felt paid fairly, or enough to live a secure, middle-class life. By and large, our frustrations center around one thing: money.
We respect money. We do everything we can to get more. We try to get better jobs, or additional jobs, all in an effort to earn more money and improve our stock in life. It may not be ideal, but our lives, more often than not, revolve around earning and spending.
There’s no doubt about it, money is frustrating. And the fact that wage growth has stalled, economic inequality is widening like never before, and prices on just about everything keep going up make it worse. It’s easy to become numb to it all — or angry.
Here are 10 facts about money, and the current state of the economic system, that are sure to get you pissed off.
1. The top 0.1% control more than 20% of all wealth
It’s a trope you’ve heard over and over again: the 1%, or the 0.1% more specifically, have way more than they should. Now, we don’t want to demonize the wealthy, necessarily. But there is something seriously out of whack. According to a 2014 research paper by economists Emmanuel Saez and Gabriel Zucman, the top tenth of the 1% have just about as much money as the bottom 90%. That’s roughly 160,000 families with more than $20 million.
2. There is $21 trillion stashed overseas
Much of that wealth concentrated among America’s wealthiest families isn’t even here in the U.S. — it’s stashed overseas, in order to avoid taxes. This is a move that has come under severe scrutiny in recent years, but in most cases is perfectly legal. To put that $21 trillion into perspective, it’s about as much as the GDPs of both Japan and the U.S. combined.
3. Top companies are sitting on trillions
It’s not just individuals stashing cash in tax havens — big corporations are doing the same. According to a 2015 study, up to $2.1 trillion is being held in overseas accounts by big American companies in an effort to avoid repatriation and taxation. Why is that a problem? It’s money that could be used to invest in new equipment, factories, or employees — thereby helping the economy.
4. The average American hasn’t seen wages rise in decades
While many people continue to get rich, most Americans haven’t seen a raise — at least in terms of purchasing power — in decades. By some accounts, wages haven’t risen in 15 years. There are a lot of reasons for that, but it mostly has come down to increased globalization and economic turmoil. But other studies have pegged that number at closer to 35 years; meaning that we’re earning roughly what we did in the late 1970s.
5. The financial industry rakes in billions in fees annually
Hidden fees are everywhere, and they are around every corner in our financial system. Your bank is likely charging you all sorts of fees for checking accounts, maintenance, or even having a debit or credit card. And those fees add up to big bucks and revenues for financial firms. For example, banks made more than $11 billion in overdraft fees alone in 2015.
6. Some industries are more profitable than ever
Judging by the way many airlines and hotel chains are run, you’d think they were on the edge of bankruptcy. But it isn’t so — both industries are as profitable as they’ve ever been. By cutting services to the bone, airlines (who run on tight margins anyway) have found ways to bolster revenues. That’s why free snacks and entertainment are hard to come by. As for hotels? It’s why some places charge you $15 per night for Wi-Fi.
7. The cost of the Iraq War is staggering
While government services and programs continue to suffer under budget shortfalls, we’ve been spending trillions overseas to fight wars that haven’t provided much in the way of a return. The Iraq War, for example, cost more than $2 trillion — much of that getting gobbled up by foreign governments, shady contractors, or just plain old disappearing into thin air.
Imagine what that kind of money could do to overhaul the V.A., or rebuild infrastructure?
8. An estimated $50 billion is stolen from workers annually
Wage theft is a much bigger issue than we care to admit, and according to some estimates, as much as $50 billion (per an Economic Policy Institute study) is lifted from workers every year. This happens in a variety of ways, from paying less than minimum wage, or refusing to pay overtime, and many employers get away with it. Lots of employees are scared to report it, so it’s often overlooked by regulators.
9. Retirement is becoming a pipe dream
Retirement is getting further out of reach for a lot of Americans, especially as it becomes clear that many baby boomers were counting on the Social Security system to keep them afloat. Well, there’s a real crisis in the pipe, and in all likelihood, you’ll need well over seven-figures in investments to safely and securely retire at 65. Of course, this will vary largely from family to family and region to region. But a lot of people are struggling just to pay rent — let alone figure out a way to sock money away into an IRA.
10. The average American has less than $1,000 in savings
Speaking of saving, Americans are having a very hard time with their rainy day funds. A recent survey found that 62% of Americans have less than $1,000 in savings, and a whopping 21% don’t even have a savings account. How does that translate into paying for houses, babies, cars, and ultimately, retirement? It doesn’t look good. Some of the problem lies in bad financial habits, but some structural economic issues are also at play.