WEALTH INEQUALITY WIDENING WORLDWIDE
December 11, 2006
The world's richest two percent of adults own more than half of global household wealth, while half the world's population own only one percent, according to a new report from the United Nations.
According to the World Institute for Development Economics Research of the United Nations:
- In 2000, the top 1 percent of the world's population -- some 37 million adults with a net worth of at least $515,000 -- accounted for about 40 percent of the world's total net worth, according to the report.
- The bottom half of the population owned merely 1.1 percent of the globe's wealth.
- The net worth of the world's typical person -- whose wealth was above that of half the world's population and below that of the other half -- was under $2,200.
The widening gap between the global haves and the have-nots in large measure reflects the failure of less- developed countries to develop, while rich countries have experienced fast economic growth and a spectacular buildup of assets, according to the UN. For example:
- The United States accounted for 4.7 percent of the world's population but 32.6 percent of the world's wealth; nearly 4 out of every 10 people in the wealthiest 1 percent of the global population were American.
- By contrast, the average Chinese had a net worth of roughly $2,600, at the official exchange rate, and while home to more than a fifth of the world's population, had only 2.6 percent of the world's wealth.
- India, with 16.8 percent of the world's people, accounted for only 0.9 percent of the world's wealth.
However, global inequality in wealth may well be somewhat lower today. The data in the report is six years old. Fast growth and wealth accumulation in China and India since 2000 are likely to have closed the average gap between the rich world and the poor.
Source: Eduardo Porter, "Study Finds Wealth Inequality Is Widening Worldwide," New York Times, December 6, 2006; based upon: James B. Davies, Susanna Sandstrom, Anthony Shorrocks and Edward N. Wolff, "The World Distribution of Household Wealth," World Institute for Development Economics Research of the United Nations, December 5, 2006.
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