The top 1% of households globally own 43% of all personal wealth while the bottom 50% have only 1%. The 1% are all millionaires in net wealth (after debt) and there are 52m of them. Within this 1%, there are 175,000 ultra-wealthy people with over $50m in net wealth – that’s a miniscule number of people (less than 0.1%) owning 25% of the world’s wealth!
This information comes from the 2020 Credit Suisse Global Wealth report which has just been released. The report remains the most comprehensive and explanatory analysis of global wealth (not income) and of the inequality of personal wealth. Every year the CS global wealth report analyses the household wealth of 5.2 billion people across the globe. Household wealth is made up of the financial assets (stocks, bonds, cash, pension funds) and property (houses etc) owned. And the report measures this, net of debt. The report’s authors are James Davies, Rodrigo Lluberas and Anthony Shorrocks. Professor Anthony Shorrocks was my university flatmate, where we both graduated in economics (although he has the much better mathematical skills!).
According to the 2020 report, total global household wealth rose by USD36.3 trillion during 2019. But the COVD-19 pandemic cut that 2019 increase by nearly half (USD17.5 trillion) between January and March 2020. However, because stock-markets and property prices then rebounded, thanks to government and central bank credit injections, the Credit Suisse researchers reckon that total household wealth was still slightly up by mid-2020 compared to the level at the end of last year, although wealth per adult was slightly down.
By mid-2020 global household wealth was USD 1 trillion above the January level, a rise of 0.25%. As this is less than the rise in adult numbers over the same period, average global wealth fell by 0.4% to USD 76,984. In comparison to what would have been expected before the COVID-19 outbreak, global wealth fell by USD 7.2 trillion, or USD 1,391 per adult worldwide.
The most adversely affected region was Latin America, where currency devaluations reinforced reductions in dollar GDPs, resulting in a 12.8% reduction in total wealth in dollar terms. The pandemic also eradicated the expected growth in North America and caused losses in every other region, except China and India. Among the major global economies, the United Kingdom has seen the biggest relative erosion of wealth.
Most shocking is the still huge inequality of household wealth globally. As shown by the wealth pyramid graphic below, inequality remains stark, both geographically between the ‘rich north’ and ‘poor south’; and between households within countries.
At the end of 2019, North America and Europe accounted for 55% of total global wealth, with only 17% of the world adult population. In contrast, the population share was three times larger than the wealth share in Latin America, four times the wealth share in India, and nearly ten times the wealth share in Africa.
Wealth differences within countries are even more pronounced. The top 1% of wealth holders in a country typically own 25%–40% of all wealth, and the top 10% usually account for 55%–75%. At the end of 2019, millionaires around the world – which number exactly 1% of the adult population – accounted for 43.4% of global net worth. In contrast, 54% of adults with wealth below USD 10,000 (ie pretty much nothing) together mustered less than 2% of global wealth.
The researchers reckon that the worldwide impact on wealth distribution within countries has been remarkably small given the substantial pandemic-related GDP losses. Indeed, there is no firm evidence that the pandemic has systematically favoured higher-wealth over lower-wealth groups or vice versa. In 2019, the number of millionaires worldwide soared to 51.9 million, but has changed very little overall during the first half of 2020.
At the apex of the wealth pyramid, the report estimates that at the start of this year there were 175,690 ultra-high net worth (UHNW) adults in the world with net worth exceeding USD 50 million. The total number of UHNW adults rose by 16,760 (11%) in 2019, but 120 members were lost during the first half of 2020, leaving a net gain of 16,640 in UHNW membership since the start of 2019.
During the first half of 2020, the number of millionaires shrank by 56,000 overall, just 1% of the 5.7 million added in 2019. Membership has expanded in some countries and some have lost significant numbers. The United Kingdom (down 241,000), Brazil (down 116,000), Australia (down 83,000) and Canada (down 72,000) all shed more millionaires than the world as a whole.
It seems that wealth inequality declined within most countries during the early 2000s. The fall in inequality within countries was reinforced by a drop in “between-country” inequality, fuelled by rapid rises in average wealth in emerging markets. The trend became mixed after the financial crisis of 2008, when financial assets grew speedily in response to quantitative easing and artificially low interest rates. These factors raised the share of the top 1% of wealth holders, but inequality continued to decline for those below the upper tail. Today, the bottom 90% accounts for 19% of global wealth, compared to 11% in the year 2000. In other words, there was a concentration of wealth towards the top 1% (and even more to 0.1%), but with some dispersion among the remaining 99%.
The researchers conclude that the small decline in wealth inequality in the world as a whole “reflects narrowing wealth differentials between countries as emerging economies, particularly China and India, have grown at above-average rates. This is the main reason why global wealth inequality fell in the early years of the century, and while it edged upward during 2007–16, we believe that global wealth inequality re-entered a downward phase after 2016.”
In short, what the report shows is billions of people have no wealth at all after debts and that the distribution of global personal wealth can be described as a few Gulliver giants looking down on the mass of Lilliputians.
Michael Roberts Blog 
Is there any data that takes into account the ownership of the means of production as well?
@Ari
Each statistical office of any capitalist country records the recipients of profit = owners of the means of production and the recipients of wages or wage substitutes = wage labourers. Isn’t this distinction enough for you?
In Germany, society is divided into 10% owners of production equipment and 90% wage earners.
Wal Buchenberg
“In Germany, society is divided into 10% owners of production equipment and 90% wage earners.”
Do you count the professional class in the wage earners? Or, generally, those employed in the service and public sector?
It is. But I think the extremity of the inequality would be exposed more explicitly when the extent of the corporate ownership [of the means of production] is somehow brought into the picture.
Hopefully, he will first define means of production for this current era. Here in the U.S., industrial capitalism has been in a downward spiral since the 1980s. Most jobs are in service industries and it seems most of the wealth has been created via intellectual property, real estate, & stock & bonds investments. He also needs to define ownership for this era as well. All of us with pension funds and IRAs own tiny pieces of companies or are among their micro creditors.
An objection to Fig. 1, if I may? The gray color layer, that supposedly represents over half the world’s population, is not over half the area of the figure. The dark green is to my eye much larger than 1% of the area. I don’t even think the green area is about one third the area of the pale green, even though the green is supposed to about 11% versus 34% for the pale green. I think the figure would be much more informative if it was to scale, not just an ideological icon. Even for a bank this is bad statistics. (I follow Andrew Gelman on thinking the graphics are part of statistics, or in this case, economics.)
I would also disagree with the arbitrary layering, dividing the pyramid into the layer of people with negative wealth, the people who would leave no taxable estate distinguished as much as possible. And the upper layers could be distinguished (or I think should be) into those whose property income is greater than the median income. I read someone the rule of thumb for the truly rich is interest etc. income greater than a million per year, which actually seems rule of thumbish, that is, almost right half the time. But this kind of thing would I believe be far to informative to serve the bank’s purposes.
Steven, You’re right.
In a correct scale representation, the “pyramid” is not like a pyramid, but a like television tower.
Like this:
https://marx-forum.de/Forum/gallery/index.php?image/987-reichtumsverteilung-in-der-welt-2017/
Wal Buchenberg
Very good!
Thank you, that’s much better.
Based on the provided pyramid diagram, I’m quite surprised by the fraction of the petty-bourgeoisie class (> USD 100,000 to USD 1 million) among the global population (11.4%, 590 million individuals), it is just impossible to believe. Upon closer inspection, the actual pyramid graph even from 2007, as pointed out in one of the comments, diverges radically. It is pretty apparent that such reports made by bourgeois economists, deliberately stuff in “unknowns” into their pyramid charts, just to justify a pyramid that represents only half of the human population, while omitting the rest, most of whom do not even own a dime. And it is unsurprising, upon a quick Google Image “wealth pyramid” search, there is hardly one non-misleading pyramid graph. All this just demonstrates the remarkable power of capitalist propaganda, which makes capitalism look like a progressive structure that puts people out of poverty, when the actual reality is the contrary. However, one figure that is still have trouble contending with, is the 590 million individuals figure, which still surprises me.
Hi VIL,
I think it is not possible to draw simple conclusions about class membership from the distribution of consumer wealth (pyramid diagram). Marx did not divide the social classes according to the respective income level, but according to the respective sources of income.
In Germany, for example, around 7 percent belong to the petty bourgeoisie (self-employed capitalists), but their average income is below the average income of wage workers.
Wal Buchenberg
VIL, it is not impossible to believe. I make between 50-60,000 per year USD working in a unionized supermarket in the states. My wife makes just over 100,000 USD working for a Big 3 accounting firm. We have 3 children. We each have pensions. Plus IRAs. We owe over 200,000 USD on our home but that home is worth over 500,000 USD. There are millions of people with IRAs (traditional, Roths, & rollovers). There’s millions of people that have pensions and annuities through their jobs or unions. Millions of people have equity in their homes if they don’t own them outright. How many millions of people work for the government directly or for government backed agency? All of those people could conceivably have 100,000 in assets within 5 to 10 years on the job. Its also conceivable that most of those 590,000,000 have been in their respective field for years, with the same firm for years, and are largely over 40 if not 50, and are mainly well-educated or have a skilled trade. Also, the majority are in North America, Europe, Australia, and wealthy Asia nations. If we exclude Latin America and Africa the overall percentage of the global population with between 100,000 to 1 million USD would be even higher. And I don’t think the number of people would fall considerably by excluding those two areas.
By the way, this sort of thing is why my KISS or index card program is: Kill all the billionaires!*
KISS=Keep It Simple Stupid
index card program=one written on an index card
Technically, billionaires can be killed by taking their billions, but this approach is rather bloody, as they tend to kill hordes of people to prevent that.