According to studies offered by the Swiss firm Credit Suisse, the number of millionaires during the pandemic has increased. Thus, the data show us how millionaires, like the luxury sector, do not understand economic crises.
A few weeks ago, my colleague and analyst David Lopez Cabia spoke to us about how the luxury market, in crisis situations, does not suffer as much as other sectors. In fact, as shown in the analysis, we have dealt with situations in which, despite experiencing a very severe crisis like the one we are experiencing today, the sector, as could be seen in the indicators, shot up notably. And it is that, although it is quite paradoxical, crises do not usually have a great impact on companies that operate in this sector, so that, unlike the rest, they are less affected.
Greater access by many buyers who, previously, were not; the safe haven value that these assets usually present; as well as the very resilience shown by the great fortunes in crisis situations are some of the factors that, as we mentioned in the aforementioned article, cause this sector not only not to fall, but to emerge stronger. Proof of this are the yachts that have been sold during the pandemic, reaching record highs when we analyze the sale of this type of luxury goods in past years.
However, in addition to the factors that are mentioned throughout the article, we forget one of great relevance that should be highlighted; especially after knowing a publication of the financial company Credit Suisse which indicates what we are going to comment on. And, according to the Swiss firm, COVID has had a significant impact on household income. According to the FEDEA itself, and only in the case of Spain, more than 8 million people have suffered a clear deterioration in their income. But what we are commenting on, when a more global vision is applied, we see that it is repeated in many territories.
However, this deterioration, by income deciles, has nuances that we must point out, such as the one pointed out by Credit Suisse. Nuances such as that the number of millionaires, such as the luxury sector during crises, has increased substantially during the pandemic.
But how much has it increased? Let’s see next!
More crisis, more millionaires
“According to the report published by the firm, about 1% of the adult population worldwide became millionaires during the pandemic.”
According to the figures provided by Credit Suisse, what we see is that, despite the crisis, the number of millionaires has not stopped growing. So much so that in 2020, according to the report published by the firm, about 1% of the adult population worldwide became millionaires during the pandemic. A rather paradoxical situation, as I mentioned, since it is observed that what for some was a real disaster, for others, as we mentioned in an article we published recently, it has been a real opportunity.
And it is that the saying that is said in Spain that it never rains to everyone’s taste is going to be true.
In the analysis carried out by the company, it is observed that, with regard to the millionaires who are operating on our planet, this, like the luxury sector during crises, has increased during the past year. According to the firm, the figure already exceeds 56 million millionaires worldwide. Although the crisis has had a notable impact as we said, the analysis shows us that the pandemic did not have a significant impact on the creation of wealth in the world.
Observing the increase, we see how this is quantified in 5.2 new millionaires, which shows us, together with the other mentioned indicator of 1%, that the creation of wealth on the planet does not understand crisis or pandemics. In fact, according to the report, this wealth has not stopped increasing, in the same way, with growth shown by the report of 7.4% during 2020. Increases that, although we highlight now, it should be added that they have been visible for some time years.
Since 2000, the number of people with wealth between $ 10,000 and $ 100,000 has tripled, from 507 million people in 2000 to 1.7 billion in the middle of last year. A situation that is also highlighted by the magazine in charge of making the famous ranking of billionaires, with data that shows us that, despite the pandemic, 2020 was a record year for the richest in the world, with an increase of 5 billion dollars. in wealth, as well as an unprecedented surge in new millionaires.
Some data that shows us that, as the headline says, millionaires and wealth do not understand crisis or pandemics.
New millionaires: more millionaires, more digital
“We are talking about a very substantial increase in new millionaires, but with a notable presence of the digital industry in this private and select group.”
From Bezos to Bill Gates, through Mark Zuckerberg, they are some of the great millionaires who have made technology and digitization the economy of the future, ignoring a pandemic that only triggered their billing.
Such is the degree of advancement and penetration of these companies that, while in 2014, 6 years ago, it was difficult to find any of them in the TOP 10, in 2020, the unusual and what is striking is that in the same ranking are people who, like Warren Buffet or Bernard Arnault, do not lead companies as avant-garde as those led by the aforementioned leaders.
According to the Forbes list, Jeff Bezos, Elon Musk, Bernard Arnault, Bill Gates and Marck Zuckerberg are the ones who lead the ranking of millionaires on our planet right now. Excluding, with all the respect in the world, Mr. Arnault, the rest of the names cited are those that preside, respectively, companies such as Amazon, Tesla, Microsoft, Facebook, Instagram, WhatsApp, among others.
This shows us that, apart from the president of the Luois Vuitton group – which is dedicated to the luxury sector – the richest people in the world are also those who run the most powerful digital companies.
But we cannot forget other names that follow those mentioned. Names like Larry Ellison, Larry Page or Mukesh Ambani are some of those that follow the list cited above. However, like the former, they are also within the digital sector, presiding, respectively, companies such as Oracle, Google or Reliance Industries.
In short, a very substantial increase in new millionaires, but with a notable presence of the digital industry in this private and select group.
“In the same way that digital companies have broken into the rankings, it should be added that new women have also broken into these lists.”
We cannot close this article without first stopping along the way and pointing out that, in the same way that digital companies have broken into the rankings, dethroning the biggest ones, it should be added that new women have also broken into the Forbes list.
In this sense, the first woman we observe appears in position 17, this being Alice Walton, the only daughter of the founder of Walmart. However, to this we are commenting, another woman is added, more from the entertainment world, who is sweeping and who has already become what Forbes calls a “billionaire.”
This woman is the socialite, model and businesswoman Kim Kardashian West, who had a fortune that reached 1,000 million dollars last year. And this, after the launch of her cosmetics line, as well as the income derived from all the appearances that this model has made on television.
A growing inequality
“If we look at the income deciles, we can identify a greater widening between the highest and lowest deciles.”
In summary, it is convenient to end by mentioning the growing inequality that we observe, and that, in a certain way, is measured by this substantial increase in millionaires, as well as the notable increase in people who have suffered deterioration in their income during the pandemic. And, despite the fact that the GINI coefficient tells us that inequality has not stopped reducing for more than 40 years, the truth is that, if we look at the income deciles, we can identify a greater widening among the highest deciles and the lowest.
This growing inequality is very dangerous, and it does not benefit the economy. Well, as the Oxfam organization mentions, with what has been spent in 2021 on yachts, entire countries could have been vaccinated.
Therefore, although the creation of wealth and the appearance of more millionaires is good news, we must not forget this inequality that plagues many countries on the planet. Especially in emerging economies, where, coincidentally, this increase in millionaires, as well as the increase in spending on luxury goods, is greater.