The Poverty Gap Is Growing: What Can We Do?

By
Services for Real Estate Pros with RealSatisfied

wealth and povertyI was just alerted to a groundbreaking, first of it's kind study by the World Institute for Development of Economics Research that shows "assets of $2,200 per adult placed a household in the top half of the world wealth distribution in the year 2000." (1) Let me state that in a different way... 50% of the world's population has assets of less than $2200. They represent just 1% of the total world wealth.  Astounding. But that's just the beginning of the astounding numbers.

Want to be among the richest 10% of adults in the world? No problem... only $61,000 in assets is required.

Shooting to be among the top 1% of wealth in the world? You only need $500,000 in assets.

This study is "the first of its kind to cover all countries in the world and all major components of household wealth, including financial assets and debts, land, buildings and other tangible property" (1) This is physical and financial assets minus debts.

''Income inequality has been rising for the past 20 to 25 years, and we think that is true for inequality in the distribution of wealth,'' said James Davies, professor of economics at the University of Western Ontario, one of the report's authors. - (2)

The study shows that 85% of the worlds wealth is owned by 10% of the population. The top 1% of the world population owns 40% of the wealth all by itself! 

These numbers literally floor me.

Intuitively I knew this to be true. I have to admit that. But seeing the numbers on the screen hit me like a ton of bricks.

It makes me wonder... what can we do?

The "we" I'm referring to is the ActiveRain community. Some of the brightest real estate people I've met to date are right here. I'm very impressed by what I see. There are almost 12,000 of us now. How do we put our heads together to come up with strategies to help lessen the gap, create opportunities for more and provide a path for home ownership?

Home ownership is the key. How can we lead the way?  How can we make our collective voices work for change? I'm not sure I have any answers. But I'm relatively sure that together we can make a difference. This seems to be right up our alley. Wouldn't you agree?

 

EDIT: i have posted a followup to this post here:

Harnessing The Power Of The ActiveRain Community: An Idea

 

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Rainmaker
1,086,961
Jeff Turner
RealSatisfied - Santa Clarita, CA

Tricia, I've done some research, but there is no one place that addresses your question. I have some anecdotal information, however. Here is a look at four countries total fertility rate, population doubling time and adult illiteracy. This is just four examples, but you can see an anecdotal link between total fertility and illiteracy. Logic tells me the link between this and poverty is strong as well. 

Japan Total Fertility Rate: 1.3 children per woman, population doubling time: 289 years. Adult Illiteracy: 1% male and female. 

United States Total Fertility Rate: 2.0 children per woman, population doubling time: 116 years. Adult Illiteracy:3% male and female.

India Total Fertility Rate: 3.0 children per woman, population doubling time: 36 years. Adult Illiteracy: 32% male, 55% female 

Mali Tital Fertility Rate: 7.0 children per woman, population doubling time 23 years. Adult Illiteracy: 64% male, 84% female.

 

 

Jan 03, 2007 05:04 AM #58
Rainmaker
498,501
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Jeff,  I think stable govenments and economic freedom are key.  After that one needs a way to inspire people to get going in the right direction.  It's really tough to break the cycle as long as corrupt governments are in place though.  All I know is that I need to focus on developing myself and my wealth before I can spend too much time on such a huge problem.  The more wealth I create the more I can provide to others and the more I can inspire others to do the same. I do what I can, where I am at the present moment.

Throwing money at the problem isn't going to solve it.  Some how something deep inside every individual must be sparked in a way that drives them forward to a better life.  I think with more people being able to move and travel and experience what's possible, it's just a matter of time before people become empowered to make the changes necessary to solve their own problems.  I'm all for trying to help that happen as soon as possible. 

Jan 03, 2007 09:21 AM #59
Rainmaker
1,086,961
Jeff Turner
RealSatisfied - Santa Clarita, CA

All... I have posted a follow up to this post.

Harnessing The Power Of The ActiveRain Community: An Idea

 

Jan 04, 2007 03:59 PM #60
Rainer
51,447
John Hruska
Homes Charlotte, LLC - Charlotte, NC
Wow! Those statistics are staggering.  Thanks for taking the time to share them.
Jan 17, 2007 02:39 AM #61
Rainmaker
1,086,961
Jeff Turner
RealSatisfied - Santa Clarita, CA
John... if you find time, check out the follow up post above. Thanks!
Jan 17, 2007 11:10 AM #62
Rainmaker
303,399
ARDELL DellaLoggia
Sound Realty - Kirkland, WA
I don't do world well...got those numbers on a National scale?  Just here to vote you as #1 mostly
Jan 18, 2007 05:50 PM #63
Rainmaker
1,086,961
Jeff Turner
RealSatisfied - Santa Clarita, CA
ARDELL :: Everyone is with you. See the follow up posts to this one and you can see where my head went with it. (thanks!)
Jan 18, 2007 06:41 PM #64
Anonymous
Rich Paul
There is a strong correlation between freedom and wealth.  There is also a strong correlation between freedom and income.  The freer people are (defined as low taxes, little welfare, fair courts, stable government, light corruption, free trade, etc), the richer they get.  If people want what we have, they need to do what we did:  overthrow their government and prosper.  Sadly, we have abandoned the idea of freedom, so we will probably see more and more of our people slip into poverty.  Free markets enrich, but big governments impoverish.
Apr 26, 2007 04:30 PM #65
Rainmaker
1,310,330
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services
I have been working for a long time with various groups, communities etc. on affordable housing.  Unfortunately, every time these task forces, study commitees etc. come up with what has to be done to start to solve these problems, the political arena kills all of the ideas.  There are some great funding program in NH that help moderate and lower income folks buy houses.  I personally volunteer to do seminars 2-3 times a year, and I work with 2 -3 buyers each year to help them realize the dream of homeownership and get out of the rental cycle.  It takes a lot of effort, I am not the richest Realtor(r), but it gives me a real sense of satisfaction.
Apr 27, 2007 12:02 AM #66
Rainmaker
1,086,961
Jeff Turner
RealSatisfied - Santa Clarita, CA
Joan, what do your seminars concentrate on?
Apr 27, 2007 01:22 AM #67
Rainer
28,572
Colorado Springs Real Estate
Colorado Springs, CO

Jeff,

Thank you for the insightful statistics. I heard a statistic that 80% of small businesses are started with equity in personal residences. I think home ownership and small business help lesson the poverty gap.

Apr 27, 2007 01:25 AM #68
Rainmaker
78,618
Gary Smith
Agent Marketing Today - Commerce Township, MI
Jeff, this is very timely, thanks for posting on the eco-all stars group. Wow, 50 percent less than $2,200 in wealth. I guess that explains why the average car price in India is $3,000. Very staggering statisitics
Apr 27, 2007 05:27 AM #69
Rainer
1,738
Brett Cole
Brett Cole Insurance Agency - South Riding, VA

Congressman Elijah Cummings of Maryland just published an article that up to 2 million african americans may be at risk to default on sub-prime loans. One thing that can be done is so many municipalities have legitimate, lower interest mortgage programs. Sadly, few people seem to know about them. Research programs in your area and work with that population. Stabilization of poor areas begins with homeownership by people who can sustain ownership. They'll tend to spend money in their home areas.

I live in N.Va, but do a lot of investing in Baltimore. You're right the poor are getting poorer - not just financially, but in technological literacy. I told Rep Cummings my fear is our inner cities will be completely lost in 20 years. They'll look more like Detroit in Robo Cop than any dream we could have for a better outcome.

Baltimore has been recovering its rough areas for a few years, but there is a long way to go and it will be undone by massive defaults on mortgages.

BUT let's not forget one thing, the corruption that arises in the third world culture of our cities is a huge impediment to real progress and it's not just in upper government. Most of the problem is with people who serve that  population - attorneys, cops, and others. I see "estate" attorneys in Baltimore buying and trading client properties as if they are their own AND those very attorneys are from the communities they are raiding.

Apr 29, 2007 05:25 AM #70
Rainmaker
1,086,961
Jeff Turner
RealSatisfied - Santa Clarita, CA

Dan... home ownerships is a key. Education around how to save. live within your means and work toward home ownership is a key.

Gary.... very staggering indeed.

Brett... good stuff. It's very disheartening to hear your personal take on Baltimore. This is very troubling to me.  

May 01, 2007 10:21 AM #71
Rainer
21,361
Julia Fedak
Platinum Home Designs - Burlington, ON
IRIS, CSP

World Vision..changed mine AND my kids lives. Make your children accountable as well; since my youngest was 9...part of his allowance will go to assist charities/poverty.

Teach them now. Not everyone drives great cars, live in nice homes, and play rep. hockey.

DON'T give them everything they want. DON'T spend a small fortune on them for their birthday and X-mas..rather buy something for them, then together something for an underprivledged child.

STOP the "I need it NOW" epidemic of today's society......do you really NEED it??????????

Give generously, give lovingly.

We keep saying.."the children are our future"...well then let's teach our children well.

The affects are not going to happen overnight...and I LOVE many of the previous suggestions that we can implement to affect today. But this will help decrease the gap of tomorrow.

Idealistic?? What do you think?

 

 

 

May 01, 2007 12:37 PM #72
Rainer
302,425
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Impeach Cheney then Bush!

Terry Haugen - STAGE it RIGHT!

May 01, 2007 02:19 PM #73
Ambassador
370,453
Karen Hurst
RICOASTALLIVING.COM - Warwick, RI
Rhode Island Waterfront!

Jeff,

Just sneaking in here to applaud Julias comment. I totally agree.

However, now that I am here, I need to applaud Terry's comment as well:) And I am sure I am in the minority on that one!

May 01, 2007 11:56 PM #74
Ambassador
555,268
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Julia...

What a great comment that is. We Sponsor two children through World Vision. Mandla is 10 and Senanelo is 5. We keep their pictures, letters and drawings on our refrigerator.

When our Grand Children come to visit they always look for the latest photo of their siblings. We have taught them that there is a big difference between "Want" and "Need". Every year at Christmas time instead of spending a small fortune on gifts we buy a Farm through World Vision. 

The Grand Children understand all of this and the reasoning behind it. We hope that when they grow up they will in turn teach their Children the difference between "Want" and "Need".

If we don't all ban together and teach our Children these fundamentals our world will never change. The cycle can not be broken until we become pro active within our own families and Communities. Idealistic? I think not.

TLW...ROAR!

May 02, 2007 12:44 AM #75
Rainer
24,436
Bill Westel
Eco-Steward Realty - Asheville, NC
ECO

TLW:

I really like the idea of buying a farm or even some animals for women and children. Great Link!

May 02, 2007 04:11 AM #76
Rainer
21,361
Julia Fedak
Platinum Home Designs - Burlington, ON
IRIS, CSP

For the Canadians, you can be a part of the "Make Poverty History" campaign...

voice your thoughts!

http://www.makepovertyhistory.ca/

The G8 meeting this June in Germany is a great opportunity for the G8 leaders to make actions speak louder than words, and to make poverty history.

"Please ask Prime Minister Stephen Harper to go to the G8 meeting ready to:

  • announce a timetable for reaching the 0.7% of GNI aid target by 2015;
  • ensure full debt cancellation for all countries that need it;
  • press for trade rules that are just; and
  • take action to achieve Kyoto greenhouse gas reduction targets and provide funds to help poor countries develop sustainably and adapt to climate change.

When the G8 hear our voices, they must act. Raise your voice against poverty by sending an email to Canadian Prime Minister Stephen Harper. We will also let German Chancellor Angela Merkel, who leads the G8 in this crucial year, know that you want the G8 to help make poverty history. "



 

May 05, 2007 09:19 AM #77
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