There are now more poor people in Europe and the U.S. than there are in China, according to a Credit Suisse report.
The report bases its finding on percentages of the world’s total population.
It says that 10% and 20% of the world’s poorest are in North America and Europe. The researchers who compiled the report define poor as lacking ‘wealth’, by taking into account assets and liabilities like cash and debt.
Using the data compiled by the researchers, Credit Suisse estimates that 50 percent of the world’s population has a net worth of less than $3,210, with a large percentage of Europeans and Americans not being able to make that cut because their net worth is in the negative. The report says that is especially true of young people, graduating college with an average of $35,000 in student debt.
Financial experts say that the American lifestyle of consumerism had led people to go into debt because they can’t afford to buy items they perceive as necessary.
Credit Suisse estimates that 25% of Americans have a negative net worth, and that combined U.S. residents have a net worth of negative $60 trillion. In comparison, the U.S. Government has $18 trillion in debt and another $42 trillion in unfunded liabilities.
The experts say the US financial system encourages debt by keeping interest rates low which in many cases means consumers can borrow money for less interest than they can save.
One expert says, using statistics, “If you’ve no debts and have $10 in your pocket you have more wealth than 25% of Americans.”
In Europe, some banks are actually paying people to borrow money.
Last week Credit Suisse released another report which showed the 1% of the world’s population owns 50 percent of the world’s wealth.
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