The Top 1 Percent Owns Over Half Of The World’s Household Wealth
Around half of the world’s household wealth is in the hands of the richest 1 percent of adults, according to a study published Tuesday by the financial services company Credit Suisse.
The Global Wealth Report 2017 reveals that while the world’s total wealth is increasing, it’s largely controlled by a sliver of the global population. The world’s wealth is divided extremely unequally between regions and within age groups. And everywhere on Earth, the gap between rich and poor is growing.
“While the bottom half of adults collectively own less than 1% of total wealth, the richest decile (top 10% of adults) owns 88% of global assets, and the top percentile alone accounts for half of total household wealth,” the Credit Suisse report says.
Such growing inequality has far-reaching political and social consequences. Since the financial crisis in 2008, economically disenfranchised citizens have been demanding radical changes to the status quo. In recent years, many nations have seen a growth in populist narratives of taking back power from a corrupt elite. In some places, this has been linked to anti-immigrant or anti-refugee ideology, based on the dubious idea that those groups are threats to the welfare state and social cohesion.
The levels of inequality are shocking when considered in individual monetary terms. Around 70 percent of the world’s adults have less than $10,000 in total assets, not accounting for debt, according to Tuesday’s report. In order to be part of the richest 1 percent, an individual would need to own at least $770,368. And the financial gap between the average person and the very, very wealthy is only increasing.
Since 2000, the wealth of the richest 1 percent has grown. In 2000, the report estimates, the top 1 percent held 45.5 percent of global household wealth. That figure is up to 50.1 percent in 2017 ― down a fraction from 2016, when it hit 50.8 percent.
While the wealthiest have benefited from an overall growth in global wealth since 2000, many other groups have been left out of the spoils, in a worrying trend for the future. Although no generation has been better educated than millennials, this group has a harder time building up wealth than previous generations. Baby boomers still hold “most of the top jobs and much of the housing,” the report notes.
“Millennials are not only likely to experience greater challenges in building their wealth over time, but also greater wealth inequality than previous generations,” the report says.
Migrant workers take a break after dinner outside a rooftop hut on June 3, 2017, in Hong Kong. Inequality has been on the rise for years, causing experts to worry about its destabilizing effects.
In total, global wealth rose 6.4 percent in 2017 ― an increase over the 3.9 percent growth that occurred in 2016. But due to economic inequality in much of the world, the median wealth still decreased in Africa, Latin America and the Asia-Pacific region, which excludes China and India.
“Our projections for 2022 suggest more pessimistic scenarios for the immediate years ahead,” the report says, regarding the median wealth drop.
Experts have long warned that such persistent inequality is a threat to stability and democratic institutions everywhere. If established systems of government and party structures can’t provide economic well-being, citizens could be driven to seek out more radical alternatives.
As inequality has grown, far-left and far-right parties alike have seen their support rise in response to grievances against the status quo.
Earlier this year, the World Economic Forum declared that inequality was a driving force behind both the election of U.S. President Donald Trump and the 2016 Brexit referendum. The organization’s global risk report warned that such growing income disparity would be the most important trend in the world for the next decade.
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