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What Crash? Number of Middle-Income Earners in Stocks Drops by 16% [Chart]

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What Crash? Number of Middle-Income Earners in Stocks Drops by 16% [Chart]

What Crash? [Chart]

Number of Middle-Income Earners Invested in Stock Market Drops by 16% Since 2007

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Over the last six years, with some help of the loosest monetary policy in history, the S&P 500 tripled in value from its lows during the Financial Crisis. Then in the last week, U.S. markets have been up and down like a roller coaster with surprising daily movements of historical proportions in both directions. Currently, at our time of publication, the DJIA is down -7% year-to-date.

While the majority of investors are familiar with the above story, this time there are millions of fewer people along for the ride. And most of those that sat this one out are middle or lower income earners.

Several polls tell the same story, which is that the number of Americans invested in the stock market has decreased significantly since 2007, the year before the Financial Crisis. In a series of Gallup polls, which are what we use for today’s chart, respondents were asked the following question: “Do you, personally, or jointly with a spouse, have any money invested in the stock market right now — either in an individual stock, a stock mutual fund, or in a self-directed 401(k) or IRA?”

The total number of adults invested in the market has decreased from 65% (2007) to 55% (today). More alarmingly, it is people in the lower and middle income classes that make up the vast majority of this drop. For people making between $30k and $75k per year, the percentage of those invested has decreased from 72% to 56%. For those making less than $30k, it decreased from 28% to 21%.

The folks that make over $75k per year? The percentage is close to the same, going from 90% to 88% – likely the result of some baby boomers retiring or focusing on fixed income securities in their later years.

Going back further in the data, it actually turns out that the total amount of people invested in the markets is lower than virtually any time in the last two decades. Part of this is because of recent stagnation in wages, and another part is related to the rising distrust in the financial system itself.

In our view, part of the problem is also that policies such as quantitative easing, zero interest-rates, and bank bailouts tend to help those out that are closer to the top of the food chain. Inflating asset bubbles help the people that own such assets, and low rates give well-off people access to even more capital to invest with. However, for the middle and lower income earners that rely on regular paychecks to accumulate capital, these same policies encourage consumption and indebtedness. Lower earners do not get to see their house or stock portfolio sail in growth because they do not own them. They also rely more on credit cards, which have only dropped from 14.5% to 13% in average rates.

So don’t be surprised this weekend when your neighbor is unaware of the stock market mayhem over the last week. The majority of people in middle and lower income classes didn’t experience it.

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Debt

Visualizing $97 Trillion of Global Debt in 2023

Global debt has soared since the pandemic. Which countries have the biggest stockpile of debt outstanding in 2023?

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Visualizing $97 Trillion of Global Debt in 2023

Global debt is projected to hit $97.1 trillion this year, a 40% increase since 2019.

During the COVID-19 pandemic, governments introduced sweeping financial measures to support the job market and prevent a wave of bankruptcies. However, this has exposed vulnerabilities as higher interest rates are amplifying borrowing costs.

This graphic shows global debt by country in 2023, based on projections from the International Monetary Fund (IMF).

Debt by Country in 2023

Below, we rank countries by their general government gross debt, or the financial liabilities owed by each country:

CountryGross Debt (B)% of World TotalDebt to GDP
๐Ÿ‡บ๐Ÿ‡ธ U.S.$33,228.934.2%123.3%
๐Ÿ‡จ๐Ÿ‡ณ China$14,691.715.1%83.0%
๐Ÿ‡ฏ๐Ÿ‡ต Japan$10,797.211.1%255.2%
๐Ÿ‡ฌ๐Ÿ‡ง UK$3,468.73.6%104.1%
๐Ÿ‡ซ๐Ÿ‡ท France$3,353.93.5%110.0%
๐Ÿ‡ฎ๐Ÿ‡น Italy$3,141.43.2%143.7%
๐Ÿ‡ฎ๐Ÿ‡ณ India$3,056.73.1%81.9%
๐Ÿ‡ฉ๐Ÿ‡ช Germany$2,919.33.0%65.9%
๐Ÿ‡จ๐Ÿ‡ฆ Canada$2,253.32.3%106.4%
๐Ÿ‡ง๐Ÿ‡ท Brazil$1,873.71.9%88.1%
๐Ÿ‡ช๐Ÿ‡ธ Spain$1,697.51.7%107.3%
๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico$954.61.0%52.7%
๐Ÿ‡ฐ๐Ÿ‡ท South Korea$928.11.0%54.3%
๐Ÿ‡ฆ๐Ÿ‡บ Australia$875.90.9%51.9%
๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$835.00.9%167.9%
๐Ÿ‡ง๐Ÿ‡ช Belgium$665.20.7%106.0%
๐Ÿ‡ฆ๐Ÿ‡ท Argentina$556.50.6%89.5%
๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia$552.80.6%39.0%
๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$540.90.6%49.5%
๐Ÿ‡ต๐Ÿ‡ฑ Poland$419.40.4%49.8%
๐Ÿ‡ฌ๐Ÿ‡ท Greece$407.20.4%168.0%
๐Ÿ‡น๐Ÿ‡ท Tรผrkiye$397.20.4%34.4%
๐Ÿ‡ท๐Ÿ‡บ Russia$394.80.4%21.2%
๐Ÿ‡ฆ๐Ÿ‡น Austria$393.60.4%74.8%
๐Ÿ‡ช๐Ÿ‡ฌ Egypt$369.30.4%92.7%
๐Ÿ‡จ๐Ÿ‡ญ Switzerland$357.70.4%39.5%
๐Ÿ‡น๐Ÿ‡ญ Thailand$314.50.3%61.4%
๐Ÿ‡ฎ๐Ÿ‡ฑ Israel$303.60.3%58.2%
๐Ÿ‡ต๐Ÿ‡น Portugal$299.40.3%108.3%
๐Ÿ‡ฒ๐Ÿ‡พ Malaysia$288.30.3%66.9%
๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa$280.70.3%73.7%
๐Ÿ‡ต๐Ÿ‡ฐ Pakistan$260.90.3%76.6%
๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia$257.70.3%24.1%
๐Ÿ‡ฎ๐Ÿ‡ช Ireland$251.70.3%42.7%
๐Ÿ‡ต๐Ÿ‡ญ Philippines$250.90.3%57.6%
๐Ÿ‡ซ๐Ÿ‡ฎ Finland$225.00.2%73.6%
๐Ÿ‡ณ๐Ÿ‡ด Norway$204.50.2%37.4%
๐Ÿ‡จ๐Ÿ‡ด Colombia$200.10.2%55.0%
๐Ÿ‡น๐Ÿ‡ผ Taiwan$200.00.2%26.6%
๐Ÿ‡ธ๐Ÿ‡ช Sweden$192.90.2%32.3%
๐Ÿ‡ท๐Ÿ‡ด Romania$178.70.2%51.0%
๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh$175.90.2%39.4%
๐Ÿ‡บ๐Ÿ‡ฆ Ukraine$152.80.2%88.1%
๐Ÿ‡จ๐Ÿ‡ฟ Czech Republic$152.20.2%45.4%
๐Ÿ‡ณ๐Ÿ‡ฌ Nigeria$151.30.2%38.8%
๐Ÿ‡ฆ๐Ÿ‡ช UAE$149.70.2%29.4%
๐Ÿ‡ป๐Ÿ‡ณ Vietnam$147.30.2%34.0%
๐Ÿ‡ญ๐Ÿ‡บ Hungary$140.00.1%68.7%
๐Ÿ‡จ๐Ÿ‡ฑ Chile$132.20.1%38.4%
๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark$126.70.1%30.1%
๐Ÿ‡ฎ๐Ÿ‡ถ Iraq$125.50.1%49.2%
๐Ÿ‡ฉ๐Ÿ‡ฟ Algeria$123.50.1%55.1%
๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand$115.00.1%46.1%
๐Ÿ‡ฎ๐Ÿ‡ท Iran$112.10.1%30.6%
๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco$102.70.1%69.7%
๐Ÿ‡ถ๐Ÿ‡ฆ Qatar$97.50.1%41.4%
๐Ÿ‡ต๐Ÿ‡ช Peru$89.70.1%33.9%
๐Ÿ‡ฆ๐Ÿ‡ด Angola$79.60.1%84.9%
๐Ÿ‡ฐ๐Ÿ‡ช Kenya$79.10.1%70.2%
๐Ÿ‡ธ๐Ÿ‡ฐ Slovakia$75.40.1%56.7%
๐Ÿ‡ฉ๐Ÿ‡ด Dominican Republic$72.10.1%59.8%
๐Ÿ‡ช๐Ÿ‡จ Ecuador$65.90.1%55.5%
๐Ÿ‡ธ๐Ÿ‡ฉ Sudan$65.50.1%256.0%
๐Ÿ‡ฌ๐Ÿ‡ญ Ghana$65.10.1%84.9%
๐Ÿ‡ฐ๐Ÿ‡ฟ Kazakhstan$60.70.1%23.4%
๐Ÿ‡ช๐Ÿ‡น Ethiopia$59.00.1%37.9%
๐Ÿ‡ง๐Ÿ‡ญ Bahrain$54.50.1%121.2%
๐Ÿ‡จ๐Ÿ‡ท Costa Rica$53.90.1%63.0%
๐Ÿ‡ญ๐Ÿ‡ท Croatia$51.20.1%63.8%
๐Ÿ‡บ๐Ÿ‡พ Uruguay$47.00.0%61.6%
๐Ÿ‡ฏ๐Ÿ‡ด Jordan$46.90.0%93.8%
๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia$46.80.0%68.5%
๐Ÿ‡จ๐Ÿ‡ฎ Cรดte d'Ivoire$45.10.0%56.8%
๐Ÿ‡ต๐Ÿ‡ฆ Panama$43.50.0%52.8%
๐Ÿ‡ฒ๐Ÿ‡ฒ Myanmar$43.00.0%57.5%
๐Ÿ‡ด๐Ÿ‡ฒ Oman$41.40.0%38.2%
๐Ÿ‡น๐Ÿ‡ณ Tunisia$39.90.0%77.8%
๐Ÿ‡ท๐Ÿ‡ธ Serbia$38.50.0%51.3%
๐Ÿ‡ง๐Ÿ‡ด Bolivia$37.80.0%80.8%
๐Ÿ‡น๐Ÿ‡ฟ Tanzania$35.80.0%42.6%
๐Ÿ‡บ๐Ÿ‡ฟ Uzbekistan$31.70.0%35.1%
๐Ÿ‡ฟ๐Ÿ‡ผ Zimbabwe$30.90.0%95.4%
๐Ÿ‡ง๐Ÿ‡พ Belarus$30.40.0%44.1%
๐Ÿ‡ฌ๐Ÿ‡น Guatemala$29.10.0%28.3%
๐Ÿ‡ฑ๐Ÿ‡น Lithuania$28.70.0%36.1%
๐Ÿ‡ธ๐Ÿ‡ป El Salvador$25.80.0%73.0%
๐Ÿ‡บ๐Ÿ‡ฌ Uganda$25.30.0%48.3%
๐Ÿ‡ธ๐Ÿ‡ณ Senegal$25.20.0%81.0%
๐Ÿ‡จ๐Ÿ‡พ Cyprus$25.20.0%78.6%
๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg$24.60.0%27.6%
๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR$23.50.0%6.1%
๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria$21.70.0%21.0%
๐Ÿ‡จ๐Ÿ‡ฒ Cameroon$20.60.0%41.9%
๐Ÿ‡ฒ๐Ÿ‡ฟ Mozambique$19.70.0%89.7%
๐Ÿ‡ต๐Ÿ‡ท Puerto Rico$19.60.0%16.7%
๐Ÿ‡ณ๐Ÿ‡ต Nepal$19.30.0%46.7%
๐Ÿ‡ฑ๐Ÿ‡ป Latvia$18.90.0%40.6%
๐Ÿ‡ฎ๐Ÿ‡ธ Iceland$18.70.0%61.2%
๐Ÿ‡ต๐Ÿ‡พ Paraguay$18.10.0%40.9%
๐Ÿ‡ฑ๐Ÿ‡ฆ Lao P.D.R.$17.30.0%121.7%
๐Ÿ‡ญ๐Ÿ‡ณ Honduras$15.70.0%46.3%
๐Ÿ‡ต๐Ÿ‡ฌ Papua New Guinea$15.70.0%49.5%
๐Ÿ‡น๐Ÿ‡น Trinidad and Tobago$14.60.0%52.5%
๐Ÿ‡ฆ๐Ÿ‡ฑ Albania$14.50.0%62.9%
๐Ÿ‡จ๐Ÿ‡ฌ Republic of Congo$14.10.0%97.8%
๐Ÿ‡ฆ๐Ÿ‡ฟ Azerbaijan$14.10.0%18.2%
๐Ÿ‡พ๐Ÿ‡ช Yemen$14.00.0%66.4%
๐Ÿ‡ฏ๐Ÿ‡ฒ Jamaica$13.60.0%72.3%
๐Ÿ‡ฒ๐Ÿ‡ณ Mongolia$13.10.0%69.9%
๐Ÿ‡ง๐Ÿ‡ซ Burkina Faso$12.70.0%61.2%
๐Ÿ‡ฌ๐Ÿ‡ฆ Gabon$12.50.0%64.9%
๐Ÿ‡ฌ๐Ÿ‡ช Georgia$11.90.0%39.6%
๐Ÿ‡ฒ๐Ÿ‡บ Mauritius$11.80.0%79.7%
๐Ÿ‡ฆ๐Ÿ‡ฒ Armenia$11.80.0%47.9%
๐Ÿ‡ง๐Ÿ‡ธ Bahamas$11.70.0%84.2%
๐Ÿ‡ฒ๐Ÿ‡ฑ Mali$11.00.0%51.8%
๐Ÿ‡ฒ๐Ÿ‡น Malta$11.00.0%54.1%
๐Ÿ‡ฐ๐Ÿ‡ญ Cambodia$10.90.0%35.3%
๐Ÿ‡ง๐Ÿ‡ฏ Benin$10.60.0%53.0%
๐Ÿ‡ฒ๐Ÿ‡ผ Malawi$10.40.0%78.6%
๐Ÿ‡ช๐Ÿ‡ช Estonia$9.00.0%21.6%
๐Ÿ‡จ๐Ÿ‡ฉ Democratic Republic of Congo$9.00.0%13.3%
๐Ÿ‡ท๐Ÿ‡ผ Rwanda$8.80.0%63.3%
๐Ÿ‡ณ๐Ÿ‡ฆ Namibia$8.50.0%67.6%
๐Ÿ‡ฒ๐Ÿ‡ฌ Madagascar$8.50.0%54.0%
๐Ÿ‡ณ๐Ÿ‡ช Niger$8.30.0%48.7%
๐Ÿ‡ฒ๐Ÿ‡ฐ North Macedonia$8.20.0%51.6%
๐Ÿ‡ง๐Ÿ‡ฆ Bosnia and Herzegovina$7.70.0%28.6%
๐Ÿ‡ฒ๐Ÿ‡ป Maldives$7.70.0%110.3%
๐Ÿ‡ฌ๐Ÿ‡ณ Guinea$7.30.0%31.6%
๐Ÿ‡ณ๐Ÿ‡ฎ Nicaragua$7.20.0%41.5%
๐Ÿ‡ง๐Ÿ‡ง Barbados$7.20.0%115.0%
๐Ÿ‡น๐Ÿ‡ฌ Togo$6.10.0%67.2%
๐Ÿ‡ฐ๐Ÿ‡ฌ Kyrgyz Republic$6.00.0%47.0%
๐Ÿ‡ฒ๐Ÿ‡ฉ Moldova$5.60.0%35.1%
๐Ÿ‡น๐Ÿ‡ฉ Chad$5.40.0%43.2%
๐Ÿ‡ฐ๐Ÿ‡ผ Kuwait$5.40.0%3.4%
๐Ÿ‡ฒ๐Ÿ‡ท Mauritania$5.10.0%49.5%
๐Ÿ‡ญ๐Ÿ‡น Haiti$5.10.0%19.6%
๐Ÿ‡ฌ๐Ÿ‡พ Guyana$4.90.0%29.9%
๐Ÿ‡ฒ๐Ÿ‡ช Montenegro$4.60.0%65.8%
๐Ÿ‡ซ๐Ÿ‡ฏ Fiji$4.60.0%83.6%
๐Ÿ‡น๐Ÿ‡ฒ Turkmenistan$4.20.0%5.1%
๐Ÿ‡น๐Ÿ‡ฏ Tajikistan$4.00.0%33.5%
๐Ÿ‡ง๐Ÿ‡ผ Botswana$3.90.0%18.7%
๐Ÿ‡ฌ๐Ÿ‡ถ Equatorial Guinea$3.80.0%38.3%
๐Ÿ‡ธ๐Ÿ‡ท Suriname$3.80.0%107.0%
๐Ÿ‡ธ๐Ÿ‡ธ South Sudan$3.80.0%60.4%
๐Ÿ‡ง๐Ÿ‡น Bhutan$3.30.0%123.4%
๐Ÿ‡ฆ๐Ÿ‡ผ Aruba$3.20.0%82.9%
๐Ÿ‡ธ๐Ÿ‡ฑ Sierra Leone$3.10.0%88.9%
๐Ÿ‡จ๐Ÿ‡ป Cabo Verde$2.90.0%113.1%
๐Ÿ‡ง๐Ÿ‡ฎ Burundi$2.30.0%72.7%
๐Ÿ‡ฑ๐Ÿ‡ท Liberia$2.30.0%52.3%
๐Ÿ‡ฝ๐Ÿ‡ฐ Kosovo$2.20.0%21.3%
๐Ÿ‡ธ๐Ÿ‡ฟ Eswatini$2.00.0%42.4%
๐Ÿ‡ง๐Ÿ‡ฟ Belize$1.90.0%59.3%
๐Ÿ‡ฑ๐Ÿ‡จ Saint Lucia$1.80.0%74.2%
๐Ÿ‡ฌ๐Ÿ‡ฒ Gambia$1.70.0%72.3%
๐Ÿ‡ฉ๐Ÿ‡ฏ Djibouti$1.60.0%41.8%
๐Ÿ‡ฆ๐Ÿ‡ฌ Antigua and Barbuda$1.60.0%80.5%
๐Ÿ‡ธ๐Ÿ‡ฒ San Marino$1.50.0%74.0%
๐Ÿ‡ฌ๐Ÿ‡ผ Guinea-Bissau$1.50.0%73.9%
๐Ÿ‡ฑ๐Ÿ‡ธ Lesotho$1.50.0%61.3%
๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra$1.40.0%37.7%
๐Ÿ‡จ๐Ÿ‡ซ Central African Republic$1.40.0%50.1%
๐Ÿ‡ธ๐Ÿ‡จ Seychelles$1.30.0%60.8%
๐Ÿ‡ป๐Ÿ‡จ Saint Vincent and the Grenadines$0.90.0%86.2%
๐Ÿ‡ฌ๐Ÿ‡ฉ Grenada$0.80.0%60.2%
๐Ÿ‡ฉ๐Ÿ‡ฒ Dominica$0.70.0%93.9%
๐Ÿ‡ฐ๐Ÿ‡ณ Saint Kitts and Nevis$0.60.0%53.2%
๐Ÿ‡ป๐Ÿ‡บ Vanuatu$0.50.0%46.8%
๐Ÿ‡ฐ๐Ÿ‡ฒ Comoros$0.50.0%33.3%
๐Ÿ‡ธ๐Ÿ‡น Sรฃo Tomรฉ and Prรญncipe$0.40.0%58.5%
๐Ÿ‡ธ๐Ÿ‡ง Solomon Islands$0.40.0%22.2%
๐Ÿ‡ง๐Ÿ‡ณ Brunei Darussalam$0.30.0%2.3%
๐Ÿ‡ผ๐Ÿ‡ธ Samoa$0.30.0%36.2%
๐Ÿ‡น๐Ÿ‡ฑ Timor-Leste$0.30.0%16.4%
๐Ÿ‡ต๐Ÿ‡ผ Palau$0.20.0%85.4%
๐Ÿ‡น๐Ÿ‡ด Tonga$0.20.0%41.1%
๐Ÿ‡ซ๐Ÿ‡ฒ Micronesia$0.10.0%12.5%
๐Ÿ‡ฒ๐Ÿ‡ญ Marshall Islands$0.10.0%18.1%
๐Ÿ‡ณ๐Ÿ‡ท Nauru<$0.10.0%29.1%
๐Ÿ‡ฐ๐Ÿ‡ฎ Kiribati<$0.10.0%13.1%
๐Ÿ‡น๐Ÿ‡ป Tuvalu<$0.10.0%8.0%
๐Ÿ‡ฒ๐Ÿ‡ด Macao SAR<$0.10.0%0.0%
๐ŸŒ World$97,129.8100%93.0%

With $33.2 trillion in government debt, the U.S. makes up over a third of the world total.

Given the increasing debt load, the cost of servicing this debt now accounts for 20% of government spending. It is projected to reach $1 trillion by 2028, surpassing the total spent on defense.

The worldโ€™s third-biggest economy, Japan, has one of the highest debt to GDP ratios, at 255%. Over the last two decades, its national debt has far exceeded 100% of its GDP, driven by an aging population and social security expenses.

In 2023, Egypt faces steep borrowing costs, with 40% of revenues going towards debt repayments. It has the highest debt on the continent.

Like Egypt, several emerging economies are facing strain. Lebanon has been in default since 2020, and Ghana defaulted on the majority of its external debtโ€”debt owed to foreign lendersโ€”in 2022 amid a deepening economic crisis.

Global Debt: A Regional Perspective

How does debt compare on a regional level in 2023?

RegionGross Debt (B)% of World TotalDebt to GDP
North America$36,451.837.5%117.6%
Asia and Pacific$34,257.435.3%92.5%
Europe$20,123.420.7%79.1%
South America$3,164.93.3%77.2%
Africa $1,863.61.9%65.2%
Other/Rest of World$1,269.11.3%31.4%

We can see that North America has both the highest debt and debt to GDP compared to other regions. Just as U.S. debt has ballooned, so has Canadaโ€™sโ€”ranking as the 10th-highest globally in government debt outstanding.

Across Asia and the Pacific, debt levels hover close to North America.

At 3.3% of the global total, South America has $3.2 trillion in debt. As inflation has trended downwards, a handful of governments have already begun cutting interest rates. Overall, public debt levels are projected to stay elevated across the region.

Debt levels have also risen rapidly in Africa, with an average 40% of public debt held in foreign currenciesโ€”leaving it exposed to exchange rate fluctuations. Another challenge is that interest rates are also higher across the region compared to advanced economies, increasing debt-servicing costs.

By 2028, the IMF projects that global public debt will exceed 100% of GDP, hitting levels only seen during the pandemic.

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