Inequality has been on the rise across the globe for several decades. Some countries have reduced the numbers of people living in extreme poverty. But economic gaps have continued to grow as the very richest amass unprecedented levels of wealth. Among industrial nations, the United States is by far the most top-heavy, with much greater shares of national wealth and income going to the richest 1 percent than any other country.
Covid-19 and Global Inequality
The vaccine rollout around the globe has been rife with inequality. In mid January, 2022, the number of vaccine doses administered per 100 people was almost than 13 times higher in high-income than low-income countries, according to data from the WHO and the World Bank. The costs of this greed-driven global vaccine gap became painfully clear when the Omicron variant discovered in South Africa quickly spread across borders.
Extreme pandemic disparities are not unique to the United States. Oxfam reports that from March 18 to the end of 2020, global billionaire wealth increased by $3.9 trillion. By contrast, global workers’ combined earnings fell by $3.7 trillion, according to the International Labour Organization, as millions lost their jobs around the world.
Global Wealth Inequality
According to the Credit Suisse Global Wealth Report, the world’s richest 1 percent, those with more than $1 million, own 45.8 percent of the world’s wealth. Their data also show that adults with less than $10,000 in wealth make up 55.0 percent of the world’s population but hold just 1.3 percent of global wealth. Individuals owning over $100,000 in assets make up 12.2 percent of the global population but own 84.9 percent of global wealth. Credit Suisse defines “wealth” as the value of a household’s financial assets plus real assets (principally housing), minus their debts.
“Ultra high net worth individuals” — the wealth management industry’s term for people worth more than $30 million — hold an astoundingly disproportionate share of global wealth. These wealth owners held 6.5 percent of total global wealth, yet represent only a tiny fraction (0.003%) of the world population, based on Institute for Policy Studies analysis of Capgemini and Credit Suisse wealth data and UN Population Fund population estimates.
The world’s 10 richest billionaires, according to Forbes, own an astonishing $1.448 trillion in combined wealth, a sum greater than the total goods and services most nations produce on an annual basis, according to the World Bank. The globe is home to 2,755 billionaires, according to the 2021 Forbes ranking.
Those with extreme wealth have often accumulated their fortunes on the backs of people around the world who work for poor wages and under dangerous conditions. According to Oxfam, the wealth divide between the global billionaires and the bottom half of humanity is steadily growing. Between 2009 and 2018, the number of billionaires it took to equal the wealth of the world’s poorest 50 percent fell from 380 to 26.
Capgemini defines a “high net worth individual” as someone with at least $1 million in investment assets (not including their primary residence and consumer goods). Between 2012 and 2020, the members of this world millionaires club grew by 74 percent, compared to just an 8 percent growth rate for the total global population. The vast majority of these world millionaires hold less than $5 million in assets. But the the top tier, those with at least $30 million, have expanded their ranks the fastest, according to Capgemini.
The Capgemini World Wealth Report shows that individuals with between $1 million and $5 million in investment assets make up the largest share of world millionaires. But those with more than $5 million hold a large majority (56.7 percent) of world millionaire wealth. This top tier also enjoyed the largest expansion of their wealth during the first year of the pandemic.
Global Income Inequality
World Inequality Report data show that the share of national income going to the richest 10 percent has increased in nearly every country. The 10 countries where the richest 10 percent increased their share of the national economic pie the most between 1980-2020 are India, Russia, South Africa, Poland, China, Korea, the United States, Australia, Germany, and Japan. In several of these countries, the sharp increase in inequality has coincided with the rollback of various post-World War II policies aimed at narrowing economic divides.
Rapid economic growth in Asia (particularly China and India) has lifted many people out of extreme poverty. But the global richest 0.1 percent and 1 percent have reaped a much greater share of the economic gains, according to the World Inequality Report. In 2020, the richest 1 percent pocketed 20.6 percent of global income, up 2.8 percentage points since 1980. The top 0.1 percent pocketed 8.59 percent in 2020, up 1.98 percentage points since 1980. These ultra-rich individuals did take a hit in the 2008 financial crisis, but the richest top 0.1 percent have nearly regained the global income share they enjoyed in 2007.
U.S. Wealth Concentration Versus Other Countries
OECD statistics show that the top 1 percent in the United States holds 40.5 percent of national wealth, a far greater share than in other OECD countries. In no other industrial nation does the richest 1 percent own more than 27.1 percent of their country’s wealth.
The United States dominates the global population of high net worth individuals, with nearly 6.6 million individuals owning at least $1 million in financial assets (not including their primary residence or consumer goods), according to Capgemini’s World Wealth Report.
China has had the most rapid growth in the share of world millionaires, nearly doubling from 5 percent of the global total in 2017 to 9 percent in 2020. But 65 percent of the world’s millionaires continue to reside in Europe or North America, with almost 40 percent of these millionaires calling the United States home, according to the Global Wealth Report.
The United States is 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. China is rising rapidly up the ranks, with the number of individuals in the $50 million club rising from 9,555 to 28,129 between 2017 and 2020, according to the Global Wealth Report.
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, according to the Credit Suisse Global Wealth Report.