Global Inequality
Tracking inequality levels worldwide can pose a variety of statistical challenges for researchers. Different nations, for starters, tally income and wealth in different ways, and some nations barely tally reliable stats at all. But researchers worldwide are increasingly taking on these challenges. We showcase below some key findings from their research and identify the key research sources.
More than 70 percent of the world’s adults own under $10,000 in wealth. This 70.1 percent of the world holds only 3 percent of global wealth. The world’s wealthiest individuals, those owning over $100,000 in assets, total only 8.6 percent of the global population but own 85.6 percent of global wealth.
Western and European countries host the lion’s share of the world’s millionaires. More than 70 percent of the world’s millionaires reside in Europe or North America, with 43 percent of these millionaires calling the United State home. The only non-Western nations with a significant share of millionaires: the industrial powerhouses Japan, China, and Korea.
Source: UBS, Ultra Wealth Report, 2014
“Ultra high net worth individuals” — the wealth management industry’s term of art for deep pockets worth more than $30 million — hold an astoundingly disproportionate share of global wealth. These wealth owners own 12.8 percent of total global wealth, yet represent only a tiny fraction of the world population.
Source: IPS analysis of Forbes’ 2016 Billionaire list and IMF 2016 GDP Projections
The world’s 10 richest billionaires, according to Forbes, own $505 billion in combined wealth, a sum greater than the total goods and services most nations produce on an annual basis.
Source: Pew Research Center
The share of the global population defined as “poor” — those making less than $2/day — has fallen since 2001 by nearly half, to 15 percent. Overall, the world has become “wealthier” compared to the turn of the millennium. Notably, those in the middle-income bracket making between $10 and $20/day have nearly doubled their global presence, from 7 to 13 percent.
Source: OECD Wealth Distribution Database, 2010 or latest available year
Wealth disparity in the United States is running twice as wide — and more — as wealth gaps in the rest of the industrial world.
Source: OECD Wealth Distribution Database, 2010 or latest available year
The top 1 percent in the United States hold an average $15 million in wealth, a total only comparable to the prosperous microstate of Luxembourg. No other nation’s top 1 percent own even half of the wealth the top 1 percent’s in the United States and Luxembourg hold.
Source: Capgemini and RBC Wealth Management, World Wealth Report, 2015
Capemini and RBC Wealth Management define a “high net worth individual” as someone with at least $1 million in assets. The vast bulk of the world’s millionaires hold less than $5 million.
Source: Capgemini and RBC Wealth Management, World Wealth Report, 2015
A small share of the world’s millionaire population holds a large majority of world millionaire wealth.
Source: Capgemini and RBC Wealth Management, World Wealth Report, 2015
The United States dominates the global population of high net worth individuals, with over 4.3 million individuals owning at least $1 million in financial assets (not including their primary residence or consumer goods).
Source: Credit Suisse, Global Wealth Databook, 2015
The United States has become home to more than twice as many adults with at least $50 million in assets as the next five nations with the most super rich combined.
Source: Credit Suisse, Global Wealth Databook, 2015
The middle class in the United States has less than half the wealth share of middle classes in much of the rest of the developed world.
Source: Credit Suisse, Global Wealth Databook, 2015
The United States has more wealth than any other nation. But America’s top-heavy distribution of wealth leaves typical American adults with far less wealth than their counterparts in other industrial nations.
The Global Wealth Trackers
A number of institutions and scholars currently monitor the distribution of income and wealth across the world.
OECD
A Paris-based research agency funded by the world’s developed nations, the OECD analyzes trends in inequality and poverty for advanced and emerging economies and provides country-level data on a variety of indicators, including wealth and income inequality. The organization also examines the drivers of growing inequalities and assesses the effectiveness and efficiency of a wide range of policies in tackling poverty and promoting more inclusive growth.
Luxembourg Income Study
Scholars connected with the Luxembourg Income Study have created a cross-national data archive, for both income and wealth, that seeks to address the challenges of collecting comparable data on world inequality. But this project remains more a basic resource for researchers than a source of information for the general public.
World Wealth and Income Database
This interactive online initiative, originally known as the World Top Incomes Database, offers scholars and the general public alike an accessible window into the income and wealth of the globe’s most affluent. Visitors to the site can graphically compare, over time, the income and wealth shares of the wealthy in over two dozen different nations. And the comparisons enabled can drill all the way to a nation’s most affluent 0.01 percent.
Financial Institutions
In more recent years, a number of global financial industry firms have been releasing their own annual calculations on worldwide wealth concentration. These firms include Capgemini and RBC Wealth Management, the Boston Consulting Group, the Singapore-based Wealth-X, the Swiss bank UBS, the German bank Allianz, and the Knight Frank property management group.
Each of the reports these firms produce takes a slightly different approach to tallying up concentrated wealth. Capgemini and RBC, for instance, look at “high net worth individuals,” affluent individuals who hold personal fortunes worth at least $1 million, excluding primary residences, collectibles, and consumer goods. The Boston Consulting Group analyze millionaire households. Wealth-X and UBS researchers place their statistical emphasis on deep pockets worth at least $30 million.
The most ambitious of all the annual financial industry wealth reports comes out of the Credit Suisse Research Institute in Zurich. Credit Suisse’s estimates the net worth — both financial and “real” assets like housing — for all the world’s adults.
Business Media
The longest-running series of estimates for wealth’s concentration at the global economic summit come from Forbes magazine. Forbes annually tallies the fortunes of the world’s billionaires.
The Bloomberg publishing group has in recent years joined Forbes in this space. The daily Bloomberg Billionaires Index ranks the world’s richest people.
The Global Big Picture
Branko Milanovic, a senior scholar with the Luxembourg Income Survey now at the City University of New York’s Graduate Center, has done the world’s most rigorous research on the global income inequality picture. His research has found inequality increasing within nations, but slightly decreasing for the globe as a whole as middle classes emerge in China and India and the incomes of typical families in the United States and other rich countries stagnate and even, after inflation, decrease. But this slight worldwide decrease in overall inequality, Milanovich cautions, may be somewhat illusory since available national data regularly underestimate top 1 percent incomes and global tax havens conceal still more income at the economic summit. In 2016, Milanovich published Global Inequality: A New Approach for the Age of Globalization, showing how global inequality moves in cycles, fueled by war and disease, technological disruption, access to education, and redistribution.
United Nations
In 2006, scholars with the United Nations University’s World Institute for Development Economics Research published the first paper to tally, for the entire world, all the major elements of household wealth, everything from financial assets and debts to land, homes, and other tangible property. This research, based on year 2000 data, found that the richest 1 percent of world adults, individuals worth at least $514,512, owned 39.9 percent of the world’s household wealth, a total greater than the wealth of the world’s poorest 95 percent, those adults worth under $150,145.