Rich­est 1pc own half the world’s wealth, study finds

The Myanmar Times - - Business -

THE globe’s rich­est 1% own half the world’s wealth, ac­cord­ing to a new re­port high­light­ing the grow­ing gap be­tween the su­per-rich and ev­ery­one else.

The world’s rich­est peo­ple have seen their share of the globe’s to­tal wealth in­crease from 42.5% at the height of the 2008 fi­nan­cial cri­sis to 50.1% in 2017, or $140tn (£106tn), ac­cord­ing to Credit Suisse’s global wealth re­port pub­lished on 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 very rich led to the cre­ation of 2.3 mil­lion new dol­lar mil­lion­aires over the past year, tak­ing the to­tal to 36 mil­lion. “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.

These mil­lion­aires – who ac­count for less than 0.5% of the world’s pop­u­la­tion – con­trol 46% of to­tal global wealth that now stands at $280tn.

At the other end of the spec­trum, the world’s 3.5 bil­lion poor­est adults each have as­sets of less than $10,000 (£7,600). Col­lec­tively these peo­ple, who ac­count for 70% of the world’s work­ing age pop­u­la­tion, ac­count for just 2.7% of global wealth.

The re­port said the poor are mostly found in de­vel­op­ing coun­tries, 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.”

Mean­while at the top of what Credit Suisse calls the “global wealth pyra­mid”, the 36 mil­lion peo­ple with at least $1m of wealth are col­lec­tively worth $128.7tn. More than two-fifths of the world’s mil­lion­aires live in the US, fol­lowed by Ja­pan with 7% and the UK with 6%.

How­ever, the col­lapse in the value of the pound since the Brexit vote meant the to­tal num­ber of dol­lar mil­lion­aires in the UK fell by 34,000 to 2.19 mil­lion. Just over half of the UK’s 51 mil­lion adults have wealth in ex­cess of $100,000. The mean av­er­age wealth of a UK adult is $278,038, but the me­dian is $102,641.

While the global pop­u­la­tion of mil­lion­aires has grown con­sid­er­ably, the num­ber of ul­tra-high net worth in­di­vid­u­als (UHNWIs) – those with a net worth of $50m or more – has in­creased even faster. “The num­ber of mil­lion­aires has in­creased by 170% [since 2000], while the num­ber of UHNWIs has risen five-fold, mak­ing them by far the fastest-grow­ing group of wealth-hold­ers,” the re­port said.

Most of the new UHNWIs have been cre­ated in the US, but 22% come from emerg­ing economies, no­tably China.

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, who is paid SFr4m (£3m), 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.”

He said that mil­len­ni­als are much more ed­u­cated than their par­ents. But he added: “We ex­pect only a mi­nor­ity of high achiev­ers and those in high de­mand sec­tors such a s tech­nol­ogy or fi­nance to ef­fec­tively over­come the ‘millennial dis­ad­van­tage’.

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