The richest 1 percent in the world own a full half of all the world’s wealth, highlighting a dramatic increase in global inequality – the difference between the “super-rich” and the rest of us.
In 2008, at the height of the Great Recession, the world’s top one percent owned 42.5 percent of all assets on the planet. That number has soared to 50.1 percent, according to Credit Suisse’s “Global Wealth Report,” published Tuesday.
“The share of the top 1% has been on an upward path ever since [the crisis], passing the 2000 level in 2013 and achieving new peaks every year thereafter,” the annual report said. The bank said “global wealth inequality has certainly been high and rising in the post-crisis period.”
The increase in wealth among the already incredibly wealthy has meant the creation of 2.3 million new millionaires over just the past year. There are now more than 36 million millionaires in the world. “The number of millionaires, which fell in 2008, recovered fast after the financial crisis, and is now nearly three times the 2000 figure,” Credit Suisse said, The Guardian reports.
The total wealth owned by the world’s millionaires is now at $280 trillion.
On the other end of the spectrum, the world’s 3.5 billion poorest people have assets of less than $10,000 each. Collectively, these people – which account for 70 percent of the world’s population, account for about 2.7 percent of all global assets.
The poor are mostly found in developing countries, the report said, with more than 90% of adults in India and Africa having less than $10,000. “In some low-income countries in Africa, the percentage of the population in this wealth group is close to 100%,” the report said. “For many residents of low-income countries, life membership of the base tier is the norm rather than the exception.”
Almost 40 percent of the world’s millionaires live in the United States, the world’s richest country. Japan and the UK are a distant second and third with 7 percent and 6 percent of the world’s millionaires, respectively.
The biggest losers, the report says, are young people who should not expect to become as rich as their parents.
“Those with low wealth tend to be disproportionately found among the younger age groups, who have had little chance to accumulate assets,” Urs Rohner, Credit Suisse’s chairman, said. “But we find that millennials face particularly challenging circumstances.”
Rohner’s annual salary is $3 million per year. He said millennials have been dealt a series of blows including high unemployment, tighter mortgage rules, increased income inequality and reduced pensions. “With baby boomers occupying most of the top jobs and much of the housing, millennials are doing less well than their parents at the same age, especially in relation to income, home ownership and other dimensions of well-being assessed in this report.”
One of the main drivers of income inequality is tax-dodging by the rich, Oxfam said.
“The recent Paradise Papers revelations laid bare one of the main drivers of inequality – tax-dodging by rich individuals and multinationals,” Oxfam’s head of advocacy, Katy Chakrabortty, said. “Governments should act to tackle extreme inequality that is undermining economies around the world, dividing societies and making it harder than ever for the poorest to improve their lives.”