The global rich just keep on taking

Austerity is wrecking the lives of millions of people around the world. But the global ranks of the super-rich continue to grow.

The annual Capgemini and RBC Wealth Management World Wealth Report estimates that the number of “high net worth individuals” (HNWI) – which it defines as those with investible assets of US$1 million or more – grew by 6.7 percent to 14.6 million last year.

Not only are there more of them, but their wealth also increased. Combined total wealth reached a record high of US$52.62 trillion in 2013 and continued to climb in 2014 to US$56.40 trillion. By 2017, combined total wealth of this millionaire class is estimated to rise to US$70 trillion.

A fraction of this wealth, about US$30 billion, would solve world hunger. According to the World Health Organization, the cost of providing every person in the world with a “regulated in-house piped water supply with quality monitoring and in-house sewerage connection with partial treatment of sewage” would be US$136.5 billion per year. In other words, the world’s millionaire class has accumulated enough to provide the latter for more than 400 years (at current cost and current population).

As has been the pattern for the last few years, the Asia-Pacific and North America lead the ranks of the rich. Located primarily in Japan and China, there are now more HNWI in the Asia-Pacific region than in North America. In 2014, the number of HNWI in the Asia-Pacific grew to 4.69 million; their wealth increased 7.2 percent to US$15.82 trillion.

While the total population of Australia represents just 0.33 percent of the world’s population, its share of HNWI is 4 percent. The total number here is 227,000 – up from 180,000 in 2011.

So much for the end of the age of entitlement.

While the rich are getting richer, this is only half the story. There are now many more super-rich, and their wealth is growing faster than the humble rich. Ultra-HNWIs – those with more than US$30 million of investable assets – grew by 8.6 percent. They account for 35 percent of all HNWI’s total wealth.

But it is not all roses for the rich. The report notes: “[W]ealth expanded at moderate rates in 2014, the second slowest rates of the last five years, and more modestly than 2013”. Yep, that’s right, the rich are getting richer but not fast enough.

The report identifies another problem. The rich are hoarding their cash to fund their extravagant lifestyles. “HNWIs continue to keep large amounts of cash on hand, primarily as a way to fund their lifestyles and ensure financial security.”

Slow world economic growth continues to put pressure on the living standards of workers around the world. But these parasites just can’t get enough.