Richest 0.1% boost their wealth by as much as poorest half

Andrew Cummings
December 16, 2017

There, the bottom 50 percent earn almost 22 percent of the income in those economies, while the top 1 percent take in just over 12 percent of the money.

The 2018 World Inequality Report, written by a team of leading worldwide economists, finds that the rise of income inequality in the United States is "largely due to massive educational inequalities, combined with a tax system that grew less progressive despite a surge in top labor compensation since the 1980s, and in top capital incomes in the 2000s".

Further, providing figures for the share of growth per adult captured by each group, the report said: "At the global level, the top 1% captured 27% of total growth-that is, twice as much as the share of growth captured by the bottom 50%".

It concludes that wealth inequality has become "extreme" in Russian Federation and the United States, where the richest 1% accounted for 39% of the nation's wealth in 2014, compared with just 22% in 1980. At the same time, the share of global income going to the bottom 50 percent rose slightly, to just under 10 percent, thanks to gains in populous, fast-growing China and India. The first shows the percentage of national wealth controlled by the top 10% of the population in 2016.

"An even stronger increase in the share of national income was experienced by the top 0.1% and top 0.01%, whose shares grew fivefold and tenfold, respectively, from 2% and 0.5% to nearly 10% and 5%, between 1983 and 2014", it said. The bottom 50%, meanwhile, had control over only 16% of the country's income.

The authors of the report said the data it analyzes were collected from a wide range of government sources over 15 years.

"Economic inequality is widespread and to some extent inevitable", they said in the report's summary.

World Wealth & Income Database is a global research organisation that tracks information on income distribution.

In all regions around the world, the 10% richest account for at least 30% of total national income, with Europe having the lowest figure at 37%, followed by 41% in China, 46% in Russian Federation, 47% in United States of America and Canada, 55% in sub-Saharan Africa, Brazil and India and 61% in the Middle East.

The yawning gap in wealth and incomes in the US largely reflects inequalities in education, taxes that have become less progressive and a shrinking share of private wealth going to labor.

They explained that as the richest one per cent's share of global wealth increases, the middle class will be "squeezed".

The report said that the transfer of public wealth to the private sector has left governments without the resources needed to invest enough in education, health and other measures to help counter inequality.

Following Europe's example in adopting policies to benefit middle and low income earners could help counter the trend toward extreme inequality, it said.

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