Ultra-rich warned of ‘strike-back’ as global inequality hits a 100-year high and billions of poorer people see their earnings stagnate
Amazon founder Jeff Bezos is the world’s richest person, by $8.3bn. Photograph: Paul Morigi/Getty Images
On December 27, 2017, Rupert Neate writes in The Guardian:
The world’s 500 richest people have increased their wealth by $1tn (£745bn) so far this year due to a huge increase in the value of global stock markets, which are likely to finish 2017 at record highs.
The big increase in the fortunes of the ultra-wealthy comes as billions of poorer people across the world have seen their wealth standstill or decline. The gap between the very rich and everyone else has widened to the biggest it has been in a century and advisers to the super-rich are warning them of a “strike back” from the squeezed majority.
The globe’s 500 richest people, as measured by the Bloomberg billionaires index,have seen the value of the wealth increase by 23% so far this year, taking their combined fortunes to $5.3tn. The increase is largely the result of booming stock markets. The MSCI World Index and the US Standard & Poor’s 500 are both up almost 20% so far this year. The UK’s FTSE 100 is up more than 6% – and hit a new closing high of 7,620.7 points on Wednesday.
Jeff Bezos, the founder of Amazon, is the world’s richest man. His fortune has increased by $34.2bn so far this year to take his “net worth” to $99.6bn. On just one day in October Bezos’s fortune increased by $10.3bn, when Amazon posted profits much higher than analysts had expected and the company’s shares spiked.
Bezos,53, who founded Amazon in his Seattle garage in 1994, owns 16% of the retailer. He also owns all of space exploration company Blue Origin and the Washington Post newspaper, which he bought for $250m in 2013.
The Amazon founder’s fortune is $8.3bn larger than that of Microsoft founder Bill Gates, the world’s second richest man. In August Gates donated $4.6bn worth of Microsoft shares to the Bill & Melinda Gates Foundation, the charity he set up with his wife to improve global healthcare and reduce extreme poverty.
Bill and Melinda Gates have donated $35bn since 1994. They donated $16bn worth of Microsoft shares in 1999 and followed it up with another $5.1bn a year later. The Gates Foundation has grown to become the world’s largest private charity.
In 2010 the Gates and Warren Buffett (the world’s third richest person with a $85bn fortune) created the Giving Pledge, a promise to give at least half of their wealth to charity, and called on other billionaires to join them. More than 170 of the world’s richest people, including Mark Zuckerberg, Michael Bloomberg and Lord Ashcroft, have so far signed up. Bezos is not a signatory.
In June Bezos tweeted a request for ideas for a “philanthropy strategy”, asking for suggestions on how he should approach philanthropy. He later tweeted to thank his 400,000 followers for their input and said there would be “more to come”.
Collectively, the world’s five richest people – Bezos, Gates, Buffett, Amancio Ortega, the owner of Zara, and Facebook’s Zuckerberg – hold $425bn of assets. That is equivalent to one-sixth of the UK’s GDP.
The world’s super-rich hold the greatest concentration of wealth since the US Gilded Age at the turn of the 20th century, when families like the Carnegies, Rockefellers and Vanderbilts controlled vast fortunes. There are now 1,542 dollar billionaires across the world, after 145 multimillionaires saw their wealth tick over into nine-zero fortunes last year, according to the UBS / PwC Billionaires report.
Josef Stadler, the lead author of the report and UBS’s head of global ultra-high net worth, said his billionaire clients were concerned that growing inequality between rich and poor could lead to a “strike back”.
A report by Credit Suisse found that the world’s richest 1% people have seen their share of the globe’s total wealth increase from 42.5% at the height of the 2008 financial crisis to 50.1% in 2017, or $140tn.
“The share of the top 1% has been on an upward path ever since [the financial crisis], passing the 2000 level in 2013 and achieving new peaks every year thereafter,” the Credit Suisse global wealth report said. The bank said “global wealth inequality has certainly been high and rising in the post-crisis period”.
The increase in wealth among the already very rich led to the creation of 2.3 million new dollar millionaires over the past year, taking the total to 36 million. “The number of millionaires, which fell in 2008, recovered fast after the financial crisis, and is now nearly three times the 2000 figure,” Credit Suisse said.
These millionaires – who account for 0.7% of the world’s adult population – control 46% of total global wealth that now stands at $280tn. At the other end of the spectrum, the world’s 3.5 billion poorest adults each have assets of less than $10,000 (£7,600). Collectively these people, who account for 70% of the world’s working age population, account for just 2.7% of global wealth.