As many of you are familiar, the richest 1% of the world’s population are wealthier than over half of the world. They own more wealth than 4 continents, and now, a new report has shown that they have increased their combined wealth by as much as the poorest 50% – or 3.8 billion people – since 1980.
The latest inequality report to come out, this time published by French economist Thomas Piketty, drew on the work of more than 100 researchers around the world. The World Inequality Report found that the richest 1% of the global population “captured” 27% of the entire world’s wealth growth between 1980 and 2016.
It would seem more accurate to say robbed, not captured. And the wealthiest of the wealthy managed to increase their capital by even more. The top 0.1% gained 13% of the world’s wealth, and the top 0.001% – about 76,000 people – collected 4% of all the new wealth created since 1980.
“The top 0.1% income group (about 7 million people) captured as much of the world’s growth since 1980 as the bottom half of the adult population,” the report said. “Conversely, income growth has been sluggish or even nil for the population between the global bottom 50% and top 1%.”
The world’s richest person is Amazon’s founder and chief executive, Jeff Bezos, who has a $98.8bn (£73.9bn) fortune, according to the Bloomberg billionaires index. Bezos, the biggest shareholder in Amazon, has seen his wealth increase by $33bn over the past year alone.
Together, the world’s five richest people – Bezos, Bill Gates, Warren Buffett, Amancio Ortega, and Facebook’s Mark Zuckerberg – hold $425bn of assets. That is equivalent to one-sixth of the UK’s GDP.
In the UK, the richest 1% control 22% of the country’s wealth, up from 15% in 1984. The richest in the UK have seen a massive surge in their wealth. The top 0.1% – around 50,000 people – have seen their share of the nation’s wealth double from 4.5% in 1984 to 9% in 2013.
“The increase in the concentration of wealth in the last four decades is very much a phenomenon confined to the hands of the top 0.5% (the richest 250,000 Britons), and in particular the top 0.1% (the richest 50,000),” the report said.
As we know from the Panama Papers and the Paradise Papers, as well as any serious reading of history, wealthy people are able to keep and increase their wealth. Those who own large corporations are able to take immense profits while their thousands upon thousands of employees are given pittance by comparison — usually just enough to pay bills and survive, but never enough to reinvest, generate their own wealth, and stop working.
The economists said the widening inequality gap was “not inevitable” if countries simply brought in a progressive income tax — something that companies like Google don’t even pay. “It not only reduces post-tax inequality, it shrinks pre-tax inequality by discouraging top earners from capturing higher shares of growth via aggressive bargaining for higher pay.”
It might surprise people that, despite the almost unthinkable amount of wealth these individuals have, that people are still in poverty. However, their wealth is primarily because of poverty, and people not being paid enough while they work and produce those profits that the CEOs etc. so generously take home.
More inequality reports will continue to be released, telling us what we have known for centuries: the rich are getting richer, but it does not have to be this way. The question is: what are we going to do about it?