Inequality around the world has reached an irreversible tipping point.
The UK-based House of Commons Library said this week that, if current trends continue, the richest 1 percent will control nearly 66 percent of world’s money by 2030. Based on 6 percent annual growth in wealth, they would hold assets worth approximately $305 trillion, up from $140 trillion today, the Guardian reported. This follows a report released earlier this year by Oxfam, which said that just eight billionaires have as much wealth as 3.6 billion people — the poorest half of the world.
The US actually has a greater gap between rich and poor than many European countries. The divergence in the levels of inequality has been “extreme” between Western Europe and the US, according to a separate report, released earlier this year by the World Inequality Lab, a research project in over 70 countries based at the Paris School of Economics and co-authored by the French economist Thomas Piketty. “The global middle class has been squeezed,” it said.
There is an opportunity gap as well as a wealth gap, particularly when it comes to education. In the US, out of 100 children whose parents are among the bottom 10 percent of income earners, only 20 to 30 of them actually go to college. However, 90 out of 100 children go to college if their parents are within the top 10 percent earners. What’s more, research has shown that when elite colleges open their doors to students from poor backgrounds, academic performance at the institution doesn’t decline.
Many of the world’s richest people are already transferring their money to their children. Ultra high-net-worth individuals will transfer $3.9 trillion to the next generation by 2026, according to a study released last year by global wealth consultancy Wealth-X. This reflects a 5 percent decline from the report’s 2014 estimate of $4.1 trillion, but this is because the massive global wealth transfer among the world’s newest superrich has already begun.
Source: Read Full Article