The Bottom 1 Percent

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http://www.theatlantic.com/business/archive/2014/08/the-bottom-1-percent/379400/

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A homeless shelter in Cranston, Rhode Island (Brian Snyder/Reuters)

How is it different to be poor—very poor—in a developing country than in the richest country in the world? That's the question asked in a new paper from Brookings researchers Laurence Chandy and Cory Smith.

To answer it, Chandy and Smith needed to know more about that very bottom of America's wealth distribution—those living below the global poverty line of $2 per day. Not so easy: In contrast with how well-documented, how legible, the lives of the richest Americans are, those of the poorest are opaque, having fallen between the cracks in researchers' databases. The poorest are "the least explored and understood part of the distribution."

But that's only true for rich countries. In the developing world, precisely the opposite is the case: In such places, they write, "tax systems are insufficiently developed to provide an accurate portrayal of the rich so the upper tail remains largely unknown; by contrast the concentration of incomes near zero means
that surveys capture the lower tail relatively well."

The result of this is that "we know least about the top of the distribution in poor countries and least about the bottom of the distribution in rich countries." Unfortunately, in America, that means we have the worst understanding of "those whose lives are most precarious."