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The super-rich richer than ever

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The rise of new middle classes in emerging countries – particularly in post-Deng Xiaoping China since 1978 – has reduced income gaps in the world over the past thirty years but has not eliminated them, far from it. “Contemporary global inequalities are close to the level of the beginning of the XXand century, at the height of Western colonialism., notes the report on global inequalities published on Tuesday 7 December.

The average annual income of an adult: €16,700

The average income per adult in the world in 2021 (calculated taking into account taxes and social transfers) is €16,700 per year and the average wealth is €72,900. The best paid 10% receive an average of €87,000 and the poorest 50% €2,800. The average wealth of the richest 10% (calculated taking debts into account) is €550,900; that of the poorest 50% of €2,900…

This report is the second produced by the Laboratory of Global Inequalities, a global network of researchers headquartered at the Paris School of Economics (PSE). Some, like Thomas Piketty, Emmanuel Saez or Gabriel Zucman, are known for their active participation in public debate.

Their first report was published in 2018. It provided a detailed snapshot of the state of income and wealth inequality. This second report clarifies the picture and updates it, showing that the pandemic has increased wealth gaps.

The super-rich at the top

At the top of the pyramid, the super-rich like Elon Musk (Tesla) or Jeff Bezos (Amazon). They are not the only ones. “The richest 0.01%, who have assets of more than 15 million euros, held 7% of world assets in 1995. This figure is 11% today… It’s considerable”, analyzes Lucas Chancel, co-director of the laboratory on global inequalities.

The distance between the base and the top of the pyramid has only increased for thirty years. The report details: “Multimillionaires have captured a disproportionate share of the growth in wealth: the top 1% captured 38% of the additional wealth accumulated since the mid-1990s, while the bottom 50% received only 2%. »

One of the problems highlighted by the report is the importance of tax optimization practices, which means that the richest are proportionally less taxed than the middle class. But since the publication of the first report, a number of things have changed: the current American president Joe Biden shows a desire to increase taxes for the richest. The Trump years demonstrated the need for more support for the middle class. However, the US Senate is resisting these plans.

Europe, the least unequal continent

The report lists the most unequal regions. In the lead, the Middle East, followed by Latin America, sub-Saharan Africa, South-East Asia. In these regions, 10% of the population captures more than 55% of the income. In the United States it is 45%, in Europe 36%.

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With its social market economy, Europe appears to be the least unequal region in the world: “It has better resisted the rise in inequalities that occurred from the 1980s, even if it risks an American-style scenario if it is not careful”, believes Lucas Chancel. He notes that the race to the lowest tax bidder has led to the impoverishment of States.

France is, in Europe, one of the most redistributive countries in the world. The income share of the top 10% is 25%. At the same time, the bottom 50% receive 23% of the national income. This is better than in Germany (where this share represents 19%), the United Kingdom (20%) and Spain (21%). On the other hand, the differences remain very strong, in France, in terms of wealth. A tenth of the population owns 60% of total wealth, while the bottom 50% only owns 5%.

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