The world’s billionaires “did extremely well” during the coronavirus pandemic, growing their already-huge fortunes to a record high of $10.2tn (£7.8tn).
A report by Swiss bank UBS found that billionaires increased their wealth by more than a quarter (27.5%) at the height of the crisis from April to July, just as millions of people around the world lost their jobs or were struggling to get by on government schemes.
The report found that billionaires had mostly benefited from betting on the recovery of global stock markets when they were at their nadir during the global lockdowns in March and April. UBS said billionaires’ wealth had hit “a new high, surpassing the previous peak of $8.9tn reached at the end of 2017”. The number of billionaires has also hit a new high of 2,189, up from 2,158 in 2017.
Josef Stadler, the head of UBS’s global family office department that deals directly with the world’s richest people, said: “Billionaires did extremely well during the Covid crisis, not only [did] they ride the storm to the downside, but also gained up on the upside [as stock markets rebounded].”
Stadler said billionaires typically have “significant risk appetite” and were confident to gamble some of their considerable fortunes.
Luke Hilyard, executive director of the High Pay Centre, a thinktank that focuses on excessive pay, said the “extreme wealth concentration is an ugly phenomenon from a moral perspective, but it’s also economically and socially destructive”.
“Billionaire wealth equates to a fortune almost impossible to spend over multiple lifetimes of absolute luxury,” Hilyard said. “Anyone accumulating riches on this scale could easily afford to raise the pay of the employees who generate their wealth, or contribute a great deal more in taxes to support vital public services, while remaining very well rewarded for whatever successes they’ve achieved.
“The findings from the UBS report showing that the super-rich are getting even richer are a sign that capitalism isn’t working as it should.”
Stadler said the fact that billionaire wealth had increased so much at a time when hundreds of millions of people around the world are struggling could lead to public and political anger. “Is there a risk they may be singled out by society? Yes,” he said. “Are they aware of it? Yes.”
Stadler has previously warned that the yawning inequality gap between rich and poor could lead to a “strike back”.
Billionaires’ fortunes have swelled by $4.2bn (or 70%) in the three years since Stadler warned about the threat of a global uprising against the super-rich. “We’re at an inflection point,” Stadler said. “Wealth concentration is as high as in 1905, this is something billionaires are concerned about. The problem is the power of interest on interest – that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?”
The world’s current super-rich people hold the greatest concentration of wealth since the US Gilded Age at the turn of the 20th century, when families such as the Carnegies, Rockefellers and Vanderbilts controlled vast fortunes.
The UBS report did not rank the fortunes of the world’s wealth, but the richest person on the planet is Jeff Bezos, the founder and chief executive of Amazon, with $189bn. Bezos’s wealth has increased by $74bn so far this year, according to the Bloomberg billionaires index, due to the surge in Amazon’s share price as more people turned to the company. One of the few women is the cosmetics entrepreneur, Kylie Jenner.
Elon Musk, the maverick founder of electric car company Tesla, has made the most money so far this year with his fortune increasing by $76bn to $103bn.
UBS said many billionaires had quickly and generously donated some of their wealth to help with the fight against Covid-19 and the financial impact of lockdowns on families.
“Our research has identified 209 billionaires who have publicly committed a total equivalent to $7.2bn from March to June 2020,” the report said. “They have reacted quickly, in a way that’s akin to disaster relief, providing unrestricted grants to allow grantees to decide how best to use funds.”
The research shows that UK billionaires donated much less than those from other countries. In the US, 98 billionaires donated a total of $4.5bn, in China 12 billionaires gave $679m, and in Australia just two billionaires donated $324m. But in the UK, nine billionaires have donated just $298m.