Please CLICK HERE to read an interesting article by Katie Holliday entitled “Emerging Asia’s Wealth to Overtake US by 2015”. While thought provoking, there are a couple of issues worth noting: 1. Emerging Asia excludes Japan – it is considered a developed nation; yet for this report, it is included. 2. The US has about 317 million people as of 2014 according to the US Census Bureau; Asia, including Japan, has 4.3 billion or 11 times more people.
The US financial wealth approximates $85 trillion while Asia, including Japan, has grown to $80 trillion. So the US wealth per capita is about $265,000 and Asia is about $18,000. The significance of the report is not that Asia is overtaking the US as the wealthiest area, but that the Wealth of the world has grown about $60 trillion more than it would have due to the rise of Asia. The article states that in a little more than a decade, Asian wealth tripled from approximately $27 trillion to its current $80 trillion.
No matter how we look at this, the fact that the economic pie has grown is a good thing. Hundreds of millions, if not better than a billion, of people have been lifted out of poverty during the last ten years. We see the increase wealth as a strain on the environment as more people can afford to live healthier and consume more of the earth’s resources. We also see it with lower mortality rates and dropping birth rates throughout the world.
The more interesting aspect of this experience has been how the unintended consequence of the US consumer driven capitalism encouraged Walmart and other businesses to source product in countries, such as China, to reduce the cost of a finished product. It was not done to raise the average Chinese from poverty, but, nevertheless, it had the same effect. So all the “stuff” that we buy and the debt taken on by the US, has had a very positive effect; it has increased the wealth of the world significantly. Since 2001 just Asia and the US’s wealth approximated $75 trillion. Now that wealth is approximately $165 trillion and growing. Yes, our debt hangover and unemployment in the US continues to run high, but that is not solved by having Americans work for wages of less than a $1 per hour as in most of Asia. We need to create opportunities that pay more and train Americans to fill those positions. Today, it appears we have a record mismatch between skills needed and applicants possessing those skills. That issue has nothing to do with outsourcing – but with the failure of our educational system and the lack of accountability of our political leaders.
Rather than fearing the rising tide of wealth that is flooding Asia, consider rejoicing in the results of our consumer styled economy – with all of its faults – that lifted almost a billion Asians out of poverty. The result occurred without US subsidies, without aid to those nations or without special programs.
