The good news: total global wealth just hit a new record. The bad news: most of it is going to the richest of the rich.
According to a new Credit Suisse report, global wealth hit a record $263 trillion by the middle of this year, an 8.3 percent increase over last year. It’s the largest annual rise recorded since 2007, and more than doubles the $117 trillion in global wealth in the year 2000. It’s also the first time the world’s wealth has passed $250 trillion. Wealth is now 20 percent higher than the peak it reached before the 2008 financial crisis.
But few are enjoying the spoils. The bottom half of the world’s income earners owns less than one percent of total wealth. It takes just $3,650 to be counted among the richest half of the world’s population. Yet 3.3 billion people, or 70 percent of global citizens, have below $10,000.
The top ten richest percent, on the other hand, owns 87 percent of the world’s wealth. And at the very top, the one percent of the world holds nearly half at 48.2 percent.
Things are similar, if slightly less stark, in the U.S. Here, the top one percent owned just under 40 percent of total wealth by mid-2014 and the top 10 percent held about 75 percent by 2013. Even so, wealth inequality here is now as bad as it was during the roaring 1920s.
Wealth inequality is a separate measure from income inequality, and Credit Suisse notes, “Wealth inequality is much higher than income inequality. This is a worldwide phenomenon.” In the U.S., the share of wealth held by the top one percent has typically been about 20 percentage points higher than the share of income it takes home and it’s been 30 points higher for the top 10 percent.
But income inequality has also been rising here. Income for the top one percent grew by 245 percent between 1979 and 2010, nearly five times faster growth than for overall average income. In 2012, the wealthiest 10 percent took home more than half of all income, a record share. It’s a trend that’s been growing since the 1970s and has accelerated since the recession.