If everyone earned the same amount, what would it be?

February 6, 2010 9:22 AM

If every working person on the planet earned the same wage, what would we all be earning?

I was wondering the other day, if some magical perfect communist revolution happened overnight and wealth was redistributed equally, how much would each person earn? I understand that this is going to have to be pretty back of the envelope, and I don't really know how to tease out differing price of living (and other things like the role of women, etc.) but roughly speaking, where would we be? I assume we'd all be a good sight below first world level, but where, exactly?

posted by lhputtgrass to Work & Money (12 answers total)

This source gives world GDP as 60 trillion, not the 54 trillion I use above:http://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)?wasRedirected=true

I believe the 54 trillion number I had in my head may have come from an outdated version of the CIA world fact book.
posted by dfriedman at 9:30 AM on February 6, 2010

This also isn't what Communism means.
posted by youcancallmeal at 9:41 AM on February 6, 2010

Response by poster: Yeah, using "communist" like that was at best sloppy. I shouldn't have used it at all, I suppose. Marxism is a little more accurate, but I should have avoided tying the question to any sort of ideology. To be clear: I'm not interested in this as any sort of actual plan or debate of the merits of various systems of economic distribution. I'm just curious about how far the wealth of the world as currently constituted would go if equally split. I know entrenched interests wouldn't go for it in any way, shape or form, that any sort of revolution would be a huge, ugly mess, and that incentives in such a society would be unable to match those of capitalism. I'm more interested in the much more narrow question of what we would all earn if income were level across the globe. Sorry I didn't phrase the question better.
posted by lhputtgrass at 9:49 AM on February 6, 2010

Someone correct me if I understand Marx wrong, but I think the whole point of communism (or, the end result of a successful historical progression that ends in communism) is to make a money-based economy obsolete.

Obviously that hasn't really worked in practice, but a magical perfect communist revolution (in the Marxist sense) would result in common ownership of everything. Everyone is then put to work doing something that benefits everyone (farming/non-capitalist industry/having and raising babies). From everyone according to their ability, to everyone according to their need and all that-- it's kind of designed so that everyone has a decent, honorable standard of living. The first world-second world-third world way of thinking doesn't really apply. Living wouldn't have a monetary price any more. Everyone would work. No one would starve. Beyond that, I think it's impossible to tell how the average standard of living would change.
posted by oinopaponton at 9:49 AM on February 6, 2010 [1 favorite]

Best answer: 54 trillion divided by 7 billion gives about $7,700 per person, per year. Give or take.
posted by wyzewoman at 9:57 AM on February 6, 2010 [2 favorites]

Best answer: 54 trillion divided by 7 billion gives about $7,700 per person, per year. Give or take.

Note that GDP includes government spending which ranges from roughly 20% of GDP in the U.S. to about 80% of GDP in Cuba. So once you account for government services, the remainder left over for private consumption and savings would be somewhat less. So you could consider the number above to be roughly a pre-tax income with a wide range of tax rates.
posted by JackFlash at 10:11 AM on February 6, 2010

Best answer: 54 trillion divided by 7 billion gives about $7,700 per person, per year. Give or take.

This is the correct formula, but you might want to consider purchasing power parity as well.

Wikipedia lists Wikipedia lists global PPP GDP as about $70 billion dollars, over 6.6 billion means about $10,600 a person.
posted by delmoi at 11:23 AM on February 6, 2010 [1 favorite]

Mod note: few comments removed - OP is asking a clumsily worded math problem, please go to email or MeTa with semantic derails.
posted by jessamyn (staff) at 11:57 AM on February 6, 2010 [3 favorites]

I'm not an economist, so I don't know if dividing GDP by population is right, but I wonder if the $10,600 means anything, given that the value of the US dollar varies dramatically between different parts of the world. Would the number have to be adjusted according to how much a person's share of GDP compares to the cost of living?
posted by k. at 12:28 PM on February 6, 2010

Also if you want working people only, then wikipedia has the world labor force as 3,167,000,000
posted by Lanark at 12:43 PM on February 6, 2010 [1 favorite]

According to the CIA World Factbook:

Labor Force: 3.184 billion (2009 est.)
GDP (Purchasing Power Parity) in 2009 US dollars: $70.21 trillion (2009 est.)

So that would give each worker the purchasing power parity of $22,051 in 2009 US dollars. (For reference, the US GDP is $14.25 trillion with a labor force of 154.5 million, for a per-worker total of $92,233.)

You also mention wealth several times, which is a totally different question. Apparently global net worth per adult is (the purchasing power parity of) $44,024.
posted by EmilyClimbs at 6:21 PM on February 6, 2010

Something else to consider is that if this were to happen, a lot of money that's just sitting there because there's no way the person holding it would or even can spend it that fast, would suddenly go into circulation. As a result, the world GDP would go way way up (until we started to get to that guns/butter curve from economics class).
posted by Kid Charlemagne at 2:12 AM on February 7, 2010