The Wealth Gap: How It Affects Everyone and What We Can Do About It
The Credit Swiss Wealth Report 2021 measures the growth of Global Household Wealth and how that wealth is distributed. But what does that distribution look like? According to Ceoworld.biz Magazine, there are several categories of wealth:
Affluent individuals (net worth less than $1 million but more than $100,000)
High-net-worth individuals (HNWIs) (net worth: $1 million to $5 million)
Very-high-net-worth individuals (VHNWIs) (net worth: $5 million – $30 million)
Ultra-high-net-worth individuals (UHNWIs) (net worth: $30 million or more)
Billionaires (net worth $1 billion or more)
Alternatively, we can group the categories into the rich, the super rich, and the ultra rich.
But here's the shocking part: the world population owning more than $1M is just 1.2% of the world population, yet they own nearly 50% of total wealth. This wealth concentration has been bad for growth and has created untold crises besides socio-economic inequality.
What's even more alarming is that the same pyramid used to depict the distribution of wealth also tells the story of humans who create wealth but end up owning little or nothing. In fact, 70% of the world population has nothing or less than $2,000, which may not even be a liquid asset.
Research by Era Dabla-Norris, Kalpana Kochhar, and Evridiki at the World Economic Forum found that the ongoing trend of making the rich richer will continue to lower growth. However, they also found that making the poor and the middle class richer will raise GDP growth. In other words, boosting the incomes of the poor and middle class can help raise growth prospects for all.
So how can we make this happen? By empowering the poor and middle class to create wealth for themselves and their families. By using their savings and consumption to grow local economies, they can become an economic power to stimulate growth. This can be achieved by having more champions of growth within their local community who can come together to innovate finance and create new economic opportunities.
In conclusion, the wealth gap affects everyone, but we can work together to bridge that gap and create a more equitable world. By empowering the poor and middle class, we can stimulate growth and raise the living standards for everyone.
#people #money #growth #finance
