The richest 10% control 76% of global wealth; 50% poorer get 2%

the pandemic of the new coronavirus worsened to huge financial gap between rich and poor across the world, concluded a new report.

You billionaires around the world enjoyed last year the biggest increase in their share of wealth since the World Inequality Laboratory began keeping records in 1995, according to the research group’s analysis released on Tuesday (7).

This group’s net worth grew by more than $3.6 trillion in 2020 alone, increasing its share of global household wealth to 3.5%.

At the same time, the pandemic has pushed an estimated 100 million people into extreme poverty, bringing the global total to 711 million by 2021, according to an estimate by the world Bank cited by the review.

Even more people would have fallen into poverty if many developed countries had not undertaken relief efforts to protect their residents from the financial consequences of the pandemic. Covid-19.

“The Covid-19 crisis has exacerbated inequalities between the very rich and the rest of the population,” said Lucas Chancel, lead author of the report and co-director of the lab. “However, in rich countries, government intervention has prevented a massive increase in poverty, which has not happened in poor countries.”

The World Inequality Report is based on more than four years of work by more than 100 researchers around the world. Inequality experts Emmanuel Saez and Gabriel Zucman, both from the University of California, Berkeley, and Thomas Piketty from the Paris School of Economics, coordinated the report with Chancel.

While Covid-19 has deepened the divide between rich and poor, the world has always been unequal. Financial deregulation, privatization and less progressive taxation in richer countries, and large-scale privatization in emerging economies have helped boost the fortunes of the rich in recent decades, the report said. Global inequality is close to where it was at the height of Western imperialism in the early 20th century, he noted.

“The work that we’ve been doing really shows that, in fact, these claims – or this trickle-down economy idea – don’t go through the scrutiny of the data,” Chancel said. “The main lessons from the data over the past 40 years are that tax rate cuts have not generated prosperity for all, as they should have.”

The report recommends charging a tax on the rich to generate revenue that governments can use to reduce inequality and invest in education, health and green measures.

US USASome Democratic Party politicians recently launched a plan to tax billionaires to pay for their proposed social safety net expansion, but the effort quickly faded.

Here are five more conclusions from the report:

Global wealth and income gaps are huge

The richest 10% of the global population controls 76% of the world’s wealth in 2021, according to the analysis. In contrast, the poorest 50% have only 2%. The average 40%, in turn, own 22%.

When it comes to revenue, the richest 10% capture 52% of global revenue, while the poorest 50% earn just 8%. The intermediate 40% make up 39%.

rich are getting richer

The top 1% captured 38% of global wealth growth between 1995 and 2021, while the bottom 50% secured just 2%, the report concluded.

The fortunes of the rich expanded at a much faster rate – between 3% and 9% a year during this period. But the poorest half saw their wealth grow by just between 3% and 4% a year. And since they have very little wealth, the total value hasn’t increased much.

Wealth gap varies greatly by region

A Latin America it has the biggest split between the top 10%, who control 77% of the wealth, and the bottom 50%, who own just 1%.

In contrast, the Europe has the smallest gap. The richest 10% own 58% of the total wealth, against 4% of the poorest 50%.

The large number of public programs available to low-income and middle-class residents – including free education, health and culture – are among the reasons why Europe is a less unequal society, Chancel said.

“Europe, with its very generous system of access to public services, has so far managed to contain rising inequalities, whereas the United States has not done so in recent decades,” he said.

Global income split has narrowed a bit but remains high

The overall income gap, which represents earnings such as wages, wages, interest and dividends, has narrowed somewhat since 1980 as the China and a few other large developing countries caught up with North America and Europe.

“Average income has been increasing faster in China, India, Brazil, the emerging world, than in Europe and the US,” Chancel said. “Because of this effect, you have a reduction in global inequalities between those who live in China and those who live in other parts of the world.”

The average income of the top 10% globally was 38 times that of the bottom 50% in 2020, compared to 53 times that in 1980. However, the current level is comparable to the income gap in 1910, when the average income of the global top 10% was 41 times higher.

But even with the increase in average income in emerging nations such as China and India, inequality within these countries has increased.

“This has really slowed down progress in terms of reducing global inequalities,” he said. “And it has also slowed down progress in terms of poverty reduction.”

The study adjusts countries’ incomes according to differences in the cost of goods and services, a practice known as purchasing power parity.

While much of the report’s data focuses on income inequality before taxes and government benefit transfers, the researchers also examined the impact of these factors on the difference.

They found that while taxes and transfers modestly reduce inequality, the divide remains “extremely high” in regions that were already very unequal.

Women’s income still lags behind men’s

The analysis provides the first estimates of global income inequality by gender. The participation of women in the total income from work is just under 35% in the period from 2015 to 2020.

But the number varies widely by country, ranging from less than 10% to 45%. Participation is highest in the countries of the former Soviet Union and lowest in parts of sub-Saharan Africa and the Middle East.

At the current rate of growth, it will take more than a century for women’s earnings to catch up with men’s, the report concluded.

*(Translated text. Click here to read the original, in English)

Reference: CNN Brasil

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