While wages stagnate, stock prices rise and the rich get richer.
If you’re lucky enough to be a member of the global 1%, last year was another good year to be alive (every year is pretty great, though). Your wealth bracket increased its share of global riches so that it holds just over half of global wealth, according to a new report from Credit Suisse.
In the years 2000 to 2007, the richest people on Earth actually saw their proportion of global wealth fall, from 49% to 45%. But since the recession the trend has gone into reverse: The top 1% now controls 50.4% of all household wealth.
Wondering if you’re in this elite club? You’d need a total of $759,900 in assets, after debts have been subtracted. What about the top 10%? That’s a little easier: you’d only need $68,500. And the top half: Count yourself in if you have $3,210.
“While the bottom half of adults collectively own less than 1% of total wealth, the richest decile holds 87.7% of assets, and the top percentile alone accounts for half of total household wealth,” the report says. In fact, the 1% is doing better relatively speaking than the 10%, which achieved its highest wealth share back in 2000.
Credit Suisse puts the stunning rise of the 1%, and the inequality that goes with it, down to one main factor: growth in equity prices around the world. The rich are getting richer because they own things that are appreciating in value. At the same time, average wages in the U.S. and elsewhere have been stagnating: Wages now make up a record-low share of U.S. gross domestic product.
“Financial assets continue to increase in relative importance and … the rise in the [price of the U.S dollar] over the past year has given wealth inequality in the United States—which is very high by international standards—more weight in the overall global picture,” the report says. In other words, inequality here is contributing more to inequality globally speaking.
Almost three-quarters of the world (3.4 billion individuals) have wealth of $10,000 or less, while 21% are in the $10,000–$100,000 range. Still, the power of the bottom of the pyramid shouldn’t be underestimated: It amounts to $39 trillion globally.