The top 1% of income earners globally are incredibly wealthy compared to the rest of the world’s population. But exactly how rich are they? Let’s dig into the data and statistics to understand the massive wealth concentrated at the very top.
What income level is required to be in the global 1%?
To be considered part of the global 1% in terms of income, you need to earn around $34,000 per year after taxes. This may not seem like a high bar, but consider that the average global per capita income is only around $10,000. So the global 1% earn over 3 times the world’s average income.
Most of the global 1% live in developed countries like the United States and Western Europe. The threshold to be in the 1% in the US is around $500,000 in annual income. Therefore, the bar is much higher in wealthy nations compared to the worldwide standard.
How much wealth does the 1% control?
The share of global wealth concentrated among the 1% is staggering. According to the Credit Suisse Global Wealth Report, the richest 1% own 43.4% of the world’s wealth. That’s nearly half of the total pie.
To put this concentration of wealth into perspective:
| Global Wealth Group | Share of Global Wealth |
|---|---|
| Richest 1% | 43.4% |
| Richest 5% | 68.6% |
| Richest 10% | 76.7% |
| Richest 25% | 89.1% |
| Bottom 75% | 10.9% |
As the table shows, the top 1% owns over 4 times the wealth of the bottom 75% of the global population combined. This illustrates the massive imbalance in how prosperity and resources are allocated worldwide.
How many millionaires are part of the global 1%?
There are approximately 50 million millionaires in the world, controlling 46% of the world’s $361 trillion in total wealth, according to Credit Suisse. The vast majority of these millionaires are part of the global 1% income group.
However, you do not need to be an outright millionaire to be in the 1%. As stated earlier, the income threshold is around $34,000 globally. But nearly all millionaires have incomes exceeding that level, and are therefore part of the top 1% of earners worldwide.
What professions and backgrounds are most common in the 1%?
The typical member of the global 1% comes from the following backgrounds:
– Business owners and executives – Top corporate managers and shareholders fall into the 1% income bracket. The highest earners are concentrated in sectors like finance, technology, healthcare, and energy.
– Celebrities – Sports and entertainment celebrities often have annual incomes in the millions, propelling them into the 1%. The highest paid actors can make over $50 million per year.
– Inheritors – People who inherit wealth from family members are a major part of the 1%. For example, the children of business tycoons often live off the family fortune.
– Highly paid professionals – Doctors, lawyers, engineers, and bankers can breach the 1% income threshold, especially later in their careers. Salaries for top professional talent often exceed $500,000.
– Politicians – Senior government officials and politicians earn lucrative salaries that can reach the 1% bracket.
So in summary, the global 1% comprises mostly of business leaders, celebrities, heirs to fortunes, and other high earners. The club is relatively exclusive. But swelling salaries for elite professions provide more access for professionals to reach top income levels over time.
Has the wealth gap between the 1% and rest widened?
Yes, the divide between the super rich and everyone else has grown over the past decades. Take a look at how the income share of the top 1% in the United States has risen since 1980:
| Year | Income Share of Top 1% |
|---|---|
| 1980 | 10% |
| 1990 | 13.5% |
| 2000 | 17.7% |
| 2010 | 20.2% |
| 2019 | 16.1% |
This table demonstrates that the U.S. 1%’s slice of the total income pie has expanded substantially from 10% in 1980 to over 16% by 2019. Meanwhile, the income shares for lower and middle class Americans have declined over the same period.
This divergence between the super rich and everyone else is even more dramatic on a global scale. Researchers estimate that the share of total wealth owned by the top 1% grew from 28% in 1987 to 33% by 2013. So in recent decades, the rich have pulled away from the rest of society when it comes to wealth and income.
How many ultra rich individuals are there worldwide?
The ultra rich segment of the global 1% includes billionaires and centi-millionaires with a net worth exceeding $100 million. According to Forbes, there were approximately 2,755 billionaires worldwide as of 2020 with total net worth around $13.1 trillion.
The billionaire class is a tiny fraction of the 50 million or so global millionaires. But billionaires and hundred-millionaires control a disproportionate share of global wealth due to their massive fortunes. The ultra rich also saw their wealth swell dramatically during the pandemic as stock markets surged.
Which countries have the most members in the global 1%?
The United States and China have the most citizens that are part of the global 1%:
| Country | Number of Global 1% |
|---|---|
| United States | 21 million |
| China | 9 million |
| Japan | 3.7 million |
| Germany | 2.5 million |
| United Kingdom | 2.4 million |
The U.S. has by far the most wealthy individuals due to its massive economy and high average incomes. Japan and major Western European nations like Germany and the U.K. also have millions of citizens in the global 1% bracket.
China is rapidly catching up thanks to its explosive economic growth over the past decades which has created a new class of wealthy elites. Overall, North America and Europe still account for the majority of people in the top 1% worldwide.
How did the pandemic impact billionaire and millionaire wealth?
Despite the economic turmoil of COVID-19, the net worth of global billionaires actually increased substantially. According to a study by Swiss bank UBS, total billionaire wealth grew from $8.6 trillion in March 2020 to $13.1 trillion by July 2021, marking a 53% increase over just 16 months.
While the pandemic caused mass unemployment worldwide, government stimulus and surging stock markets boosted assets held by the mega rich. The majority of billionaires’ wealth is tied to investments rather than salaries, so they benefited disproportionately from rising financial markets while their workers suffered job losses.
Millionaires also saw gains, albeit more modest ones. The number of millionaires edged up by around 5% during the pandemic according to Credit Suisse. So the past two years have been good for the finances of the world’s top income groups, further cementing their economic dominance.
Conclusion
The top 1% of income earners around the world hold a remarkably large share of global income and wealth. While thresholds to enter the 1% vary by country, individuals generally need to earn around $34,000 after tax or more to reach this privileged status.
The concentration of wealth among billionaires, multi-millionaires, and other members of the 1% has increased over recent decades. This had led to growing debate about rising inequality and policies like wealth taxes that could reduce it. While the pandemic hurt the broader economy, the superrich saw their fortunes grow even larger. So the divide between the 1% and everyone else may widen even further in the years ahead without concerted policy actions.