House of Commons Library Research

by: Liam Byrne MP, Chair of the All-Party Parliamentary Group on Inclusive Growth | on: 06.04.18 | in: Uncategorised

 

Assuming that recent annual growth rates in the amount of wealth held by the top 1% and other 99% are maintained up to 2030. We can then estimate the share of total wealth held by the top 1% under such a scenario – though this is clearly simplistic.

Nevertheless, following this approach, the table shows the share of global wealth that would be held by the top 1% and other 99% in 2030 if the total wealth of each group grew at the same rate as was observed between (a) 2008-2017 and (b) 2000-2017. Growth rates and total wealth are calculated from estimates published by Credit Suisse.

 

Figures are not adjusted for price inflation:

1. If aggregate total wealth of the top 1% and bottom 99% grow at the same rates as observed between 2008 and 2017:

• The wealth of the top 1% increases by around 6% per year, from around $140 trillion in 2017 to $305 trillion in 2030
• The wealth of the bottom 99% increases by around 3% per year, from around $140 trillion in 2017 to $195 trillion in 2030.

2. Aggregate total wealth of the top 1% and bottom 99% grow at the same rates as observed between 2000 and 2017:

• The wealth of the top 1% increases by around 6% per year, from around $140 trillion in 2017 to $295 trillion in 2030
• The wealth of the bottom 99% increases by around 3% per year, from around $140 trillion in 2017 to $255 trillion in 2030.

The figures for total wealth in 2017 and growth in total wealth between 2000/2008 and 2017 are based on data published by Credit Suisse in the Global Wealth Report and Global Wealth Databook. 

However, as the Credit Suisse report points out (p17) there is reason to think that recent trends will not be maintained and the wealth share of the top 1% will stabilise. So using data for past years to estimate future trends in this way could be misleading. More generally, any approach to projecting future trends will be extremely uncertain.

 

“You asked if we could express the amount of wealth held by the wealthiest 1% and the least wealthy 99% of the world population as a cash amount, under different assumptions about growth in wealth up to 2030.

Like the percentage figures, any cash figures will be purely illustrative – we don’t have forecasts for total wealth so we are limited to looking at what might happen in chosen scenarios. But the identified scenarios may not be the best ones to consider, as explained in the Credit Suisse Global Wealth Report 2017 (p17), “Either way, if equity price rises are curtailed in the years ahead, we expect to see wealth inequality levelling off and perhaps falling.” Not only might the distribution of wealth shift, but there may be slower growth in aggregate wealth across the distribution.”