Wealth accumulation and disparity.

If the level of wealth is going up and there is a tendency to accumulate later in life, this is the pattern we’d expect, right? [*footnote] That doesn’t mean it’s unfair. It just means the rate of wealth generation is accelerating, presumably a good thing.

It may indeed be a bad wealth distribution situation for Millennials, both in terms of absolute wealth and relative to other cohorts. I’ve seen some persuasive discussion of that. But the cited stat doesn’t inherently mean something bad.

*Please correct me if I’m wrong. What I mean is that 10,000 years ago when the rate of wealth accumulation was probably almost the same as 10,100 years ago, the distribution by age would be the same in -10,100 as -10,000.

But if in 1950 the rate of overall wealth increase for the society as a whole was 1% per annum and in 1960 it was 2% and in 1970 it was 3%, and so on, and people who have capital tend to accumulate wealth faster than those who don’t, and also people are living longer, then won’t we expect the relative ratios to skew increasingly towards the right but nonetheless the absolute value of youthful cohorts will be higher in later years than earlier years? And that youthful cohort, when they are old, can except to have an ever larger percentage of the wealth than the cohort ahead of them, as well as having in absolute terms more wealth all along the way?

So we may think growing wealth disparity is a bad thing. But it isn’t the same as saying that young people who have less wealth on an age normalized per capita basis (which isn’t even a correction made in the tweet) are worse off than their older cohort who when they were young had more percentage of the pie but less absolute wealth.

I didn’t mean to get into the question of whether wealth disparity itself is bad. I know people will try anyway. I’m just saying that the stats don’t imply that people got a raw deal, if trading places with the older folks at their same life stage means having less personal money. In everyday life most people are impacted by the lifestyle they have the capacity to afford more than how that compares to others.