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, in 2021 the world’s richest 1 percent, those with more than $1 million, own 47.8 percent of all the world’s wealth. This is up from 45.8 percent of total wealth share in 2020. Their data also show that adults with less than $10,000 in wealth make up 53.2 percent of the world’s population but hold just 1.1 percent of global wealth, down from 1.3 percent in 2020. Individuals owning over $100,000 in assets make up 13 percent of the global population but own 85.6 percent of global wealth. Credit Suisse defines “wealth” as the marketable value of financial assets plus non-financial assets (principally housing and land), minus 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 2021, the members of the world millionaires club grew by nearly 88 percent, compared to just a 9.7 percent growth rate for the total global population over the same time period. The vast majority of the world’s millionaires hold less than $5 million in assets. But the top tier, those with at least $30 million, have expanded their ranks the fastest, according to Capgemini. Since 2012, the top wealth group of individuals with at least $30 million has increased by 98 percent, nearly doubling their population.
The Capgemini World Wealth Report shows that individuals with between $1 million and $5 million in investment assets account for 90 percent of the millionaire population. But those with more than $5 million hold a large majority of world millionaire wealth, with 56.8 percent in 2021.
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 over 7.4 million individuals owning at least $1 million worth of investable assets (not including their primary residence and consumer goods), according to Capgemini’s World Wealth Report. From 2020 to 2021, the United States added 885,000 high net worth individuals to its population, accounting for the largest increase (13.5 percent) among all countries.
China has had rapid growth in this top wealth tier. But while that country has more than four times as many people as the United States, the number of high net worth Americans is 4.8 times greater than the number in China.
The United States is home to more than twice as many adults with at least $50 million in assets as the next seven nations with the most super rich combined. Between 2020 and 2021, the number of Americans in the $50 million-plus club increased by over 30,000 – more than in any other country, according to the Credit Suisse Global Wealth Report. China is rising rapidly up the ranks, with the number of individuals in this ultra-rich club jumping from 9,555 in 2017 to 32,706 in 2021.
The United States has more wealth than any other nation. But the top-heavy distribution of that wealth leaves typical American adults with far less wealth than their counterparts in other industrial nations, according to the Credit Suisse Global Wealth Report.