Wealth of billionaires soars in 2021, with more inequalities

The wealth accumulated by the world’s billionaires has exploded this year due to the financial effects of the COVID-19 crisis, which has caused an increase in inequalities, particularly with the poorest half of the population, who only owns 2% of the assets.

The wealth of the 520,000 people that make up the select group of 0.01% of the wealthiest has grown in relative terms this year -marked by the effervescence of financial markets- to represent 11% of the world total, highlights the Laboratory of Global Inequalities in the second edition of his report published this Tuesday.

That 0.01% accumulated 7% of wealth in 1995, a percentage that rose slightly above the threshold of 10% on the eve of the global financial crisis, which reduced it to 8% in 2010 before beginning a recovery trend that has accelerated this year, highlight the authors of this study coordinated among others by economists Thomas Piketty and Gabriel Zucman.

The evolution is almost symmetrical when one examines the group of those with more than US $ 1 billion in goods and assets, who in 1995 owned about 1% of the world’s wealth, which had risen to just over 2% in 2020 and has climbed this year to 3.5%.

If the sample is broadened a little more, the most advantaged 1% have kept 38% of the increase in wealth generated in the world between 1995 and 2021, while 50% of the poorest have only achieved 2.3 %.

It concentrates 76% of the wealth

The result is that this half of the population has an average wealth of 2,900 euros per adult, which together represents only 2% of the world total, while the top 10% accounts for 76%.

When income is examined, the 10% of the richest in 2021 will keep 52% ​​of the total (on average 87,200 euros per adult), while the poorest 50% have to be content with 8.5% (2,800 euros for the whole year).

Latin America is, together with North Africa and the Middle East (MENA), the region with the most inequalities in the world. The top 10% take up to 58% of revenues in MENA, 55% in Latin America or 45.5% in the United States. Europe is signified for being the area with the smallest gap, since that 10% concentrates 36%.

The wealth accumulated by the most privileged 10% represents up to 78.7% in Mexico, 79.8% in Brazil and 80.4% in Chile, while in these three countries the wealth of the poorest 50% is negative, which means that their Debts are greater than the value of your estate.

The report’s authors point out that inequalities between the populations of the poorest and richest states have decreased in the last two decades, but at the same time, they have increased within countries, which are of the same magnitude than those that existed during the height of colonialism at the beginning of the 20th century.

In practice, the income of the richest 10% is 38 times higher than that of the poorest 50%, when in 1820 that gap was practically half.

Gender gap

The authors of the study present in this edition a new indicator on the gender gap, which shows that women in global terms receive less than 35% of the income from work, and that taking into account that in 1990 they earned about 30% the progress in these three decades has been “very slow”.

They also note that income and wealth are directly linked to emissions of carbon dioxide (CO2), the main greenhouse gas.

The 0.01% of the richest population is responsible for 11% of these emissions. That is why they consider that climate policies such as carbon rates should be directed much more selectively against the most economically favored people.

Those responsible for the Laboratory of Global Inequalities insist that all these fractures are not inevitable, but the consequence of political decisions and can be corrected.

His main proposal to achieve this is a progressive tax on billionaires around the world that, with an average rate of 1% on wealth, would raise the equivalent of 1.6% of world income to be reinvested in education, health and health. ecological transition.