Pandemic, golden age for the wealth of billionaires

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(Bloomberg) – The share of global wealth held by billionaires soared to a record during the COVID-19 crisis, according to a group founded by French economist Thomas Piketty.

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Some 2,750 billionaires control 3.5% of the world’s wealth, according to a report by the Paris-based Global Inequality Lab released Tuesday. The figure is up from 1% in 1995, and the largest increase has occurred since the onset of the pandemic, according to the group. The poorest half of the planet’s population owns about 2% of its wealth.

The results of the study add to the debate about the worsening of inequality during a public health crisis that has hurt developing economies – which lack vaccines and financial resources to cushion the blow – even more than advanced ones. Also in the rich world, financial and real estate markets have exploded since the worst moments of the crisis last year, widening internal gaps.

These pandemic trends come after decades of policies that have often been geared toward upper-class people, with the expectation that they would “leak out” and everyone else would end up benefiting as well, according to Lucas Chancel, one of the authors of the report.

“In reality, this polarization adds to a world that was already very uneven before the pandemic,” Chancel, co-director of the World Inequality Lab, said in an interview. He noted that billionaires accumulated 3.6 trillion euros (US $ 4.1 trillion) of wealth during a crisis in which the World Bank estimates that some 100 million people have fallen into extreme poverty.

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‘Absence of middle class’

In most of the world, the richest 10% of people control roughly 60% to 80% of the wealth. But the report highlights some clear regional differences.

In general, the poorest countries have caught up with the richest, but within those developing countries, inequality has skyrocketed. Disparities between the same countries now account for more than two-thirds of global inequality, up from about half in 2000, according to the lab.

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