In America, Almost Anyone Can Be a Millionaire

Critics of capitalism miss how hard work and savings can make any of us rich.

Courtesy Getty.

This week, I ignited a small controversy on social media by claiming that “the rich are rich because they work, while the poor are poor because they don’t.” My critics were offended that I would, in their eyes, demean the poor this way. But it’s just simple reality: the top 10 percent of Americans income earners work more than 7 hours per week more than earners in the bottom 10 percent. Less-educated Americans are less likely to work at all than those with more education.

Not looking for work or working too little is indeed the main cause of poverty in America. This may seem unkind, but my critics are missing the wonderful upside: in America, anyone can become wealthy if they work full time and save reasonably over their careers.

This is one of the first things that wowed me about America. I still vividly remember the time I visited Florida from Venezuela in the early 2010s and met a Cuban-American cashier at a local Publix. While she was scanning our items, she told us she was taking a vacation with her husband the following week, a cruise to the Caribbean.

I was amazed. How could a cashier afford to go on a cruise vacation? Cashiers live in deep poverty in Venezuela; in America they get to live like the Venezuelan upper class.

That story is not unusual. The Wall Street Journal recently profiled a Costco worker named Tony Barzar from Arizona. Barzar never went to college, only taking some community college classes without finishing. Nonetheless, working his entire life in grocery stores and Costco, he has amassed over $1 million in his 401(k) account. He also owns a home with a pool and has traveled to Europe twice in the last decade—all while making just shy of $33 per hour.

He got there not by some great feat, but by slow and steady saving. Costco has a conservative employer retirement savings match program, matching 50 percent of contributions up to $1,000. To amass $1 million over the last four decades, Barzar would have needed to put just over 5 percent of his paycheck plus the Costco match in a standard ETF tracking the S&P500.

This kind of growth is achievable for the vast majority of young people in America today. At age 20, Barzar had a starting annual salary of $35,000 in today’s dollars. Today’s median 20- to 24-year-old full time worker earns over $42,000—nearly 20 percent more. Today’s young people are also better educated and have access to better jobs than existed 40 years ago.

The reality is that most poor households are poor because their members do not work full time. That’s true even when we look just at households headed by prime-age men—those between the ages of 25 and 54 years old—and exclude disabled persons.

Education has a lot to do with pay and productivity and thus economic success. But even Americans without a college degree can drastically improve their odds if they get a job, even part-time. Looking only a male-headed households—to exclude single mothers—poverty has a lot more to do with work than with education. Over one-in-three male high school graduates who do not work are poor, but under 5% of those who work full-time are.

In fact, the average full-time, prime-age worker in America, with some college education but without a degree, earns about $68,000—the same salary Barzar earns now after decades of additional experience. In other words, Mr. Bazar was able to make a million dollars earning a below-average salary for his level of education and experience.

It’s miraculous but true: the large majority of people in the United States can become millionaires simply by working a full-time job and having some discipline. As I know well, not every nation is so blessed—so Americans should be grateful for this fact, and take advantage of the immense opportunity this country offers them.