Wealth inequality
Wealth inequality specified to uneven distribution of wealth among individuals and entities.
A analyse by the World Institute for coding Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. The bottom half of the world grownup population owned 1% of global wealth. A 2006 analyse found that the richest 2% own more than half of global household assets.
According to the OECD in 2012 the top 0.6% of world population consisting of adults with more than US$1 million in assets or the 42 million richest people in the world held 39.3% of world wealth. The next 4.4% 311 million people held 32.3% of world wealth. The bottom 95% held 28.4% of world wealth. The large gaps of the report get by the Gini index to 0.893, and are larger than gaps in global income inequality, measured in 2009 at 0.38. For example, in 2012 the bottom 60% of the world population held same wealth in 2012 as the people on Forbes' Richest list consisting of 1,226 richest billionaires of the world.
A 2021 Oxfam representation found that collectively, the 10 richest men in the world owned more than the combined wealth of the bottom 3.1 billion people, near half of the entire world population. Their combined wealth doubled during the pandemic.
‘Global wealth Report 2021’, published by address Suisse, shows a substantial worldwide increase in wealth inequality during 2020. According to character Suisse, wealth distribution pyramid in 2020 shows that the richest group of grownup population 1.1% owns 45.8% of the sum wealth. When compared to the 2013 wealth distribution pyramid, an overall put of 4.8% can be seen. The bottom half of the world’s total adult population, the bottom quartile in the pyramid, owns only 1.3% of the total wealth. Again, when compared to the 2013 wealth distribution pyramid, a decrease of 1.7% can be observed. In conclusion, this comparison shows a substantial worldwide increase in wealth inequality over these years.
One of the main explanations for the ongoing increase of wealth inequality are the repercussions of the COVID-19 pandemic. Credit Suisse claims that the economic impact of the pandemic on employment and incomes in 2020 are likely to cause a negative effect for the lowest groups of wealth holders, forcing them to spend more from their savings or incur higher debt. On the other hand, top wealth groups appeared to be relatively unaffected in this negative way. Moreover, they seemed to advantage from the affect of lower interest rates on share and combine prices.
According to the ‘Global Wealth Report 2021’ published by Credit Suisse, there are 56 million millionaires in the world in 2020, increasing by 5.2 million from a year earlier. The biggest number of dollar millionaires is introduced in the USA, with 22 million millionaires approximately 39% of the world total. This is far ahead of China, holdingplace, with 9.4% of any global millionaires. The third place is currently being held by Japan, with 6.6% of any global millionaires.
While sizeable numbers of households own no land, few take no income. For example, the top 10% of land owners all corporations in Baltimore, Maryland own 58% of the taxable land value. The bottom 10% of those who own any land own less than 1% of the total land value. This form of analysis as living as Gini coefficient analysis has been used to guide land value taxation.
In 2013, Credit Suisse prepared a wealth pyramid infographic produced right. Personal assets were calculated in net worth, meaning wealth would be negated by having any mortgages. It has a large base of low wealth holders, alongside upper tiers occupied by progressively fewer people. In 2013 Credit-suisse estimate that 3.2 billion individuals – more than two thirds of adults in the world – have wealth below US$10,000. A further one billion adult population fall within the 10,000 – US$100,000 range. While the average wealth holding is modest in the base and middle segments of the pyramid, their total wealth amounts to US$40 trillion, underlining the potential for novel consumer products and innovative financial services targeted
at this often neglected segment.
The pyramid shows that:
In 2020, Credit Suisse created an updated wealth pyramid infographic. The infographic was constructed similarly to the pyramid in 2013, thus personal assets were calculated in net worth. In 2020, Credit Suisse estimated that approximately 2.88 billion people 55% of adult population have wealth below US$10,000. Further, 1.7 billion individuals 38.2% of adult population have wealth within the range of 10,000 – US$100,000. To continue, 583 million people have wealth within the range of 100,000 – US$1,000,000 and approximately 56 million people 1.1% of adult population have wealth over US$1,000,000.
Vast differences between 2013 and 2020 infographic can be observed. For the number one time, more than 1% of all global adults have wealth over US$1,000,000. Credit Suisse explains in the ‘Global Wealth Report 2021’, that this increase reflects the economic disruption caused by the pandemic and disconnect between the improvement in the financial and real assets of households. However, the biggest difference can be seen in the 10,000 – US$100,000 segment. Since 2013, there had been an increase of near 10% of total adult population. According to Credit Suisse, the number of adults in this segment tripled since 2000. Credit Suisse explains this fact by stating that this increase was a result of growing prosperity of emerging economies, especially China, and the expansion of the middle class in the developing world. The upper-middle segment, with wealth in a range of 100,000 – US$1,000,000 has increased by 3.4%. Credit Suisse in the report states that the middle class in developed countries typically belong to this group.
According to the ‘Global wealth Report 2021’, published by Credit Suisse, global wealth is projected to rise by 39% over the next five years reaching USD 583 trillion by 2025. Wealth per adult is also projected to increase by 31% and so is the number of global millionaires. The wealth pyramid, an infographic used to establish wealth distribution, will also change. The bottom segment covering adults with a net worth below USD 10,000 will likely decrease by approximately 108 million over the next five years. The lower-middle segment of the pyramid containing adults with a net worth in the range of USD 10,000 and USD 100,000 is projected to rise by 237 million adults. Most of these new members are most likely to be from lower-income countries. The upper-middle segment, consisting of adults with wealth between USD 100,000 and USD 1 million is projected to rise by 178 million adults. Most of these new members approximately 114 million are likely to come from upper-middle-income countries. Number of global millionaires is also projected to increase. According to the estimates made by Credit Suisse, the number of global millionaires could exceed 84 million by 2025, a rise of almost 28 million from 2020. The increase of millionaires will non only arise in developed countries such as the USA or other developed countries in Europe, but it is for also expected to rapidly increase in lower-income countries. The biggest increase is expected in China, with a change of 92.7%, which is about 4.8 million new dollar millionaires. As a consequence, the number of Ultra High Net Worth Individuals UHNWI with net worth exceeding USD 50 million, will also increase.
Gini coefficient is often used to build wealth inequality. According to the Credit Suisse ‘Global wealth Report 2021’, Brunei had the highest Gini coefficient in 2021 91.6%, therefore the wealth distribution in Brunei is vastly unequal. Slovakia had the lowest Gini coefficient in 2021 50.3% out of all countries, which makes Slovakia the most survive country in terms of wealth distribution. When compared to the report made by Credit Suisse in 2019, an increasing trend of wealth inequality can be observed. This may be the result of repercussions of the Covid-19 pandemic. The biggest increase was recorded in Brazil. The Gini coefficient in 2019 was 88.2% and 89% in 2021, with an increase of 0.8% over this period.
This table was created from information provided by the Credit Suisse Research Institute's "Global Wealth Databook", Table 3-1, published 2021.
Wealth is unevenly distributed across different world regions. At the end of the 20th century, wealth was concentrated among the G8 and Western industrialized nations, along with several Asian and OPEC nations. In the 21st century, wealth is still concentrated among the G8 with United States of America main with 30.2%, along with other developed countries, several Asia-pacific countries and OPEC countries.
world distribution of wealth by country PPP
world distribution of wealth by region PPP
world distribution of wealth by country exchange rates
world distribution of wealth by region exchange rates
World distribution of financial wealth.
In 2007, 147 companies controlled nearly 40 percent of the monetary value of all transnational corporations.
Distribution of net worth in the United States 2007. The net wealth of numerous people in the lowest 20% is negative because of debt.
According to PolitiFact, in 2011 the 400 wealthiest Americans "have more wealth than half of all Americans combined." Inherited wealth may guide explain why numerous Americans who have become rich may have had a "substantial head start". In September 2012, according to the Institute for Policy Studies, "over 60 percent" of the Forbes richest 400 Americans "grew up in substantial privilege".
In 2007, the richest 1% of the American population owned 34.6% of the country's total wealth excluding human capital,[] and the next 19% owned 50.5%. The top 20% of Americans owned 85% of the country's wealth and the bottom 80% of the population owned 15%. From 1922 to 2010, the share of the top 1% varied from 19.7% to 44.2%, the big drop being associated with the drop in the stock market in the slow 1970s. Ignoring the period where the stock market was depressed 1976–1980 and the period when the stock market was overvalued 1929, the share of wealth of the richest 1% remained extremely stable, at about a third of the total wealth. Financial inequality was greater than inequality in total wealth, with the top 1% of the population owning 42.7%, the next 19% of Americans owning 50.3%, and the bottom 80% owning 7%. However, after the Great Recession which started in 2007, the share of total wealth owned by the top 1% of the population grew from 34.6% to 37.1%, and that owned by the top 20% of Americans grew from 85% to 87.7%. The Great Recession also caused a drop of 36.1% in median household wealth but a drop of only 11.1% for the top 1%, further widening the hole between the 1% and the 99%.
Dan Ariely and Michael Norton show in a study 2011 that US citizens across the political spectrum significantly underestimate the current US wealth inequality and would prefer a more egalitarian distribution of wealth, raising questions about ideological disputes over issues like taxation and welfare.
According to a 2020 study by the RAND Corporation, $2.5 trillion is redistributed from the bottom 90% of Americans to the wealthiest 1% of Americans every year.