The pandemic has increased the share of the super-rich in world wealth

The share of billionaires in household wealth increased to a record high during the pandemic, while millionaires also found financial benefits from Covid-19, according to a study released today.

The Global Inequality Report, a product of a network of social scientists, estimates that billionaires hold a total of 3.5% of the world’s household wealth this year, up from 2% when the pandemic began in early 2020.

“The Covid crisis has exacerbated inequalities between the very wealthy and the rest of the population,” said Lucas Chancellor, lead author of the report, noting that rich economies have used massive fiscal support to mitigate the growing poverty.

The report draws on a variety of specialized research and data from the public sphere, and its foreword was written by US-based economists Abhjit Banerjee and Ester Diflo, two of the three recipients of the 2019 Nobel Prize in Economics. for their work on poverty.

“As wealth is a major source of future economic gain and, increasingly, power and influence, it foreshadows a further increase in inequality,” they wrote of what they call “an extreme concentration of economic power in the hands of a very small minority of the super-rich.”

The findings confirm a range of existing studies, as “rich lists” and other evidence show growing inequalities in health, society, gender and race during the pandemic.

Forbes’s annual list of billionaires includes a record 2,755 billionaires with a total wealth of $ 13.1 trillion, up from $ 8 trillion last year.

The new report shows that a wider group of 520,000 adults, making up the top 0.01% richest, saw their total share of world wealth reach 11% this year, up from 10% last year.

Being in the top category of 0.01% means that the wealth of the household amounts to at least 16.7 million euros, an amount that is adjusted for equal purchasing power in other currencies, according to the report.

Analysts say some of the super-rich have benefited from the fact that much of the global economy has moved online during the lockdowns, while others have simply benefited from rising asset prices as financial markets bet on the speed and form it will take. the global recovery.

The study also found that while poverty increased sharply in countries with poorer welfare coverage, massive government support in the United States and Europe managed to mitigate at least part of the impact on lower incomes there.

“This shows the importance of the welfare state in the fight against poverty,” Chancellor said.

The report also welcomes this year’s agreement on a global minimum tax of 15% for multinational corporations as a potential milestone in the efforts for fair corporate taxation. “We will get to this point at some point simply because states need to finance their spending,” Chancellor said.

However, he added that the agreement has drawbacks because the 15% threshold is lower than the average taxpayer in high-income countries and because it offers exceptions and opaque arbitrage opportunities to many companies.

SOURCE: AMPE