Growing inequality has been one of the most hotly debated topics in recent years. Thomas Piketty thrust it into the limelight with his book, ‘Capital in the 21st Century’, but a conversation with any average worker is enough to gauge the feeling of despair.
While the wages of top earners remained largely unscathed, for many, the weekly pay packet has stagnated at best in the wake of the global financial crisis. Few people needed to refer to indicators such as the Gini coefficient, a measure of inequality, to know their life was becoming more of a hardscrabble. Yet, the world as a whole is becoming more equal. Since the turn of the millennium, one feature has stood out in terms of global wealth generation – the rampant growth of the middle class. The eighth edition of the Allianz Global Wealth Report, which studies the asset and debt situation of households in more than 50 countries, shows that the number of people belonging to this group has more than doubled to over 1 billion today from around 450 million in 2000.
The global wealth middle class is defined as individuals with assets between 7,653 euros and 45,918 euros. “This jump is particularly remarkable given that the threshold for entry to the middle class moved significantly during this time,” note authors Kathrin Brandmeir, Michaela Grimm, Michael Heise and Arne Holzhausen in the report.
While someone with assets of over 3,600 euros could consider themselves as belonging to this class in 2000, the threshold today is more than twice as high. The increase is even more striking given that almost 150 million people rose from the global wealth middle class to join the ranks of the wealthy. So a total of 750 million people joined the global wealth middle class within just 16 years.