“You know, a million dollars isn’t what it used to be,” my friend said wistfully.

He was troubled. He smiled, but there was a pained look in his eyes. He felt betrayed. There he was, a millionaire, and it felt like someone had changed the rules without telling him. All along, he had thought that a million dollars meant something, but now that he had it…  well, it just wasn’t enough. It wasn’t what he thought it would be — or do.

The trouble with measuring wealth

I’ve been troubled by that encounter for years, for many reasons. The obvious one is that a million dollars of wealth in 2018 isn’t the same as a million dollars in, say, 1970 or 1980 or 2000. There’s this thing called inflation. Money doesn’t age well.

It’s further complicated by Forbes magazine and its unrelenting adoration of wealth. Every year, they raise the bar for being part of the Forbes 400 because the 400 keep getting richer.

But inflation and investment wealth aren’t the only problems. It’s also an issue of place.  What money buys depends on where you spend it. A cool million might buy a one-bedroom condo in Boston, San Francisco or Los Angeles, but you can still buy some wide-open urban or suburban spaces, for the same money in much of Texas.

Going further, your money will buy more in poor countries than in rich countries.

We need a better yardstick than cash for got-it-made-ness.

Introducing the Minion

I have one to propose. It isn’t perfect, but it’s a start. I call it the Minion. And it’s not a measure of wealth in hand; it’s a measure of annual income from wealth or work.

I’m not thinking of the cute creatures in the “Despicable” movies.

I’m thinking of the dictionary definition of minion: an underling, flunkey, a lackey, servant or vassal. Someone whose life you essentially control because you provide his or her income.

Are you a Minion?

Start thinking in minions and you quickly get two questions.

First, Are you a minion? (Turns out most of us are, pretty much.)

Second, if you aren’t a minion, how many minions do you have?

We need to ask such questions because talking about money isn’t very useful if you measure it in dollars. Since a dollar buys more in some places than in others, the dollar isn’t a very accurate measure of got-it-made-ness.

To move this study further I went to two sources. The first was Branco Milanovic’s, “The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality” (Basic Books, 2011).

While he doesn’t call it the Minion Measure, he’s got the basic idea — measure in multiples of typical income. He begins the search by measuring the income of historical rich people. Think Croesus and Crassus. Or Andrew Carnegie, John D. Rockefeller and Bill Gates, as well as Carlos Slim.  (English majors will enjoy his discussion of the income differences between Elizabeth and Mr. Darcy in “Pride and Prejudice.”)

The very rich have thousands of Minions

In each case, he estimates their annual income, and then divides it by the income of a typical worker at the time — basically, a minion. Croesus, he found, had the income of about 32,000 people, “a crowd that would fill about half of the Colosseum.”

John D. Rockefeller had even more, the income equivalent of 116,000 workers in the United States in the 1930s. That’s nearly four times the wealth of Croesus and enough to “easily fill Pasadena’s Rose Bowl.”

My second source was the MIT Living Wage study. This is an exercise in which they measure the actual cost of living for different household sizes around the country by state, county and standard metropolitan area. I did this because there’s a big gap between the minimum wage and the living wage all around the country. I make the giddy assumption that we actually want everyone to eat, so I choose the Living Wage.

The Minion Measure in Texas

So how are we doing, here in Texas, when measured in minions?

Here are the numbers. In Texas, the living wage for a single person is $11.03 an hour, or $22,936 a year before taxes. With a median wage of $17.06 an hour, the median worker can support himself and can hire the services of less than a single minion. Even workers at the top 10 percent of income can’t support more than themselves and three other household members at the minion level.

What this means is that the vast majority of people who work for a living are minions committed to supporting other family members at the minion level. In other words, nearly all of us live in Minion World.

You need real wealth to rank in the Minion Measure, lots of it. Investment wealth of $1 million, for instance, will produce only enough income to sustain two minions, which is about the same as earning the average wage in Texas.

So my friend’s disappointment in his million isn’t surprising.

Even wealth of $5 million only sustains 11 minions. Not much to crow about.

Ditto wealth of $50 million. The 109 minions it would support are substantial, but way short of the gilded ones of the past or present.

Some people may feel rich, but the reality is that the vast majority of us, including people of substantial wealth, live in Minion World. We have a lot more in common than we think.

Related columns:

Scott Burns, “Finding the Top of Up-Scale, 7/8/18  https://scottburns.com/finding-the-top-of-up-scale/

Scott Burns, “Our Wealth Scoreboard,” 8/12/18  https://scottburns.com/wealth-scoreboard/

Sources and References:

Branco Milanovic, “The Haves and the Have Nots: A Brief and Idiosyncratic History of Global Inequality,” Basic Books, 2011  https://www.amazon.com/Haves-Have-Nots-Idiosyncratic-History-Inequality/dp/0465031412/ref=sr_1_2?s=books&ie=UTF8&qid=1541602270&sr=1-2&keywords=branco+milanovic

MIT Living Wage Project, Texas  http://livingwage.mit.edu/states/48

Governing.com: Pay levels in Texas  http://www.governing.com/gov-data/wage-average-median-pay-data-for-states.html

This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.

Photo: Scott Burns, A classic Kadey Krogen 42 in Longboat Key Marina, Florida, 2017. (Requires many minions)

(c) Scott Burns, 2018