Chart of the day

Posted: 14 October 2015 in Uncategorized
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266-global-wealth

There is a wealth of data in the 2015 Credit Suisse Global Wealth Report.

One series (which Credit Suisse began compiling last year) measures global wealth inequality. As the authors of the report observe,

The updated and extended series displayed in Figure 6 shows that the top 1% of global wealth holders started the millennium owning 48.9% of all household wealth. According to our estimates, the top percentile share fell every year until it reached 44.2% in 2009, a drop of 4.7 percentage points. The downward trend then reversed and the share rose each year, overtaking the 2000 level within the last twelve months. We estimate that the top percentile now own half of all household assets in the world.

The shares of the top 5% and top 10% of wealth holders follow a similar pattern. The share of the top 5% dropped by 3.8 percentage points between 2000 and 2007, then flattened out until 2010 when it began rising again. The share is now 76.6%, the same as in 2000. Meanwhile the share of the top decile declined from a peak of 88.3% in 2000 to a low of 85% in 2007, after which it has been climbing slowly upwards. We estimate the current share of the top wealth decile to be 87.7%, again close to the level at the start of the century.

Clearly, one of the drivers of this trend of increasing wealth inequality in recent years, especially for the top 1 percent, is the increase in the value of financial assets, especially corporate securities, since wealthier households hold a disproportionate share of their assets in financial form. That’s particularly true in the United States, where 68.8 percent of gross wealth is held in the form of financial assets—greater than in any other country except The Netherlands and South Africa.

So, an economic recovery program that has privileged the recovery of financial markets and corporate profits has fueled the increase in wealth inequality, in the United States and across the world.

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