Why the Rich is Getting Richer

"The rich is getting richer and the poor is getting poorer". This statement accurately describes the economic situation for every country in the world. In 2005, the top 1% of Americans accounted for 21.8% of the total reported income for that year with the top 10% collecting about 48.5% of total reported income. Some say this disparity in wealth is due to technological advances that reward the untaught skill of a select few (Bill Gates and Steve Jobs) and others attribute this to the fact that personal finance and money investment is not a strong suit for most Americans. Although both of these are great reasons, I would like to explain the widening wealth gap as a function of disproportionate population growth.

The wealth gap widens when wealth is concentrated with a small group versus the masses. This widening is occurring not only because the "rich is getting richer" but rather because the "poor is getting bigger". Statistically, the population growth rate of the poor is far outpacing that of the rich. According to Keyfritz (1989), the ratio of poor people to rich people has more than doubled since 1950 with an extra 50% increase in this ratio by 2025. This rapid increase in the poor population will make wealth seem even more concentrated in the hands of the rich thus widening the wealth gap without the rich making more money.

So why the dearth in population growth for the rich? Population growth is determined by birth rates, death rates and demographic momentum. Here are some speculations for the disparity in population growth rates between the rich and the poor:

• Those who have high incomes generally have higher education and advanced degrees (doctors, lawyers, pharmacists) so many of them start their families much later than their lower education counterparts. As age increases (especially for women), it becomes more difficult to have children.
  

• Wealthy people are generally busy people who are constantly working so they have no time to have families and those who do have families usually hold off on having kids. They usually place their careers as one of their top priorities.
  

• With the proliferation of better health care and medicines to the poor, the population of the poor is living to an older age and there is a decrease in death rates.

• Lack of sex education and ignorance to teen pregnancy amongst the low income population results in a much younger "fertile" population. Similar to the baby boomer effect, this will lead to a drastic increase in population growth.
  

I hope this article was able to show that the wealth gap between the rich and the poor is not all about money. The greater the population of poor people the wider the gap is going to seem if all else stays constant. So for those who wish to narrow this disparity of incomes, it is not only necessary to talk about money but also about population control. This gives new meaning to "Blessed are the meek: for they shall inherit the Earth" (Matthew 5:5, The Bible).

Recommended Reading: Rich Dad Poor Dad by Robert T. Kiyosaki and Sharon L. Lechter

Bibliography

1. Keyfitz, Nathan, (1989). Population and Development Review 15, No. 2, 359-362.
2. Demeny, Paul (2003). Population Policy Dilemmas in Europe at the Dawn of the Twenty-First Century. Population and Development Review 29, No. 1, 4