This blog is intended to go along with Population: An Introduction to Concepts and Issues, by John R. Weeks, published by Cengage Learning. The latest edition is the 13th (it will be out in January 2020), but this blog is meant to complement any edition of the book by showing the way in which demographic issues are regularly in the news.

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Sunday, January 23, 2011

Demographics of the Rich and the Rest

This week's Economist has a special section on the global elite--"The Rich and the Rest." There are too many good demographic insights and comments for a single posting, so here is a start. How many rich people are there in the world? The consulting firm Capgemini defines anyone with "investable" assets (not including the home you live in) of at least $1 million (in US dollars) as a "high-net-worth-individual." They estimate that there are 10 million such people in the world--about one tenth of one percent of the human population. Credit Suisse has a less stringent definition of rich, calling anyone a millionaire if the sum of all net assets (value minus debt), including their house, exceeds $1 million.

The Credit Suisse “Global Wealth Report” estimates that there were 24.2m such people in mid-2010, about 0.5% of the world’s adult population. By this measure, there are more millionaires than there are Australians. They control $69.2 trillion in assets, more than a third of the global total. Some 41% of them live in the United States, 10% in Japan and 3% in China.
How did these people grow rich? Mostly through their own efforts. Only 16% of high-net-worth individuals inherited their stash, according to Capgemini. The most common way to get rich is to start a business: nearly half (47%) of the world’s wealthy people are entrepreneurs.
The global wealth pyramid has a very wide base and a sharp point. The richest 1% of adults control 43% of the world’s assets; the wealthiest 10% have 83%. The bottom 50% have only 2%. This suggests a huge disparity of influence. The wealthiest tenth control the vast bulk of the world’s capital, giving them a lot of say in funding businesses, charities and politicians. The bottom 50% control hardly any capital at all.

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