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Household wealth is hitting record heights, and not just in the United States. There are more millionaire households on the planet than ever before, particularly in Europe and in China, where growth rates are highest.
The number of world millionaire households -- those with assets of $1 million or more -- grew by 14% in 2006 to 9.6 million. These represent the richest 0.7% of all households and own $33.2 trillion, or about a third of the world's wealth, according to a study by Boston Consulting Group.
This is the first global wealth report from Boston Consulting that estimates the number of millionaire households per country, as well as estimating total wealth.
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The United States had by far the highest number of millionaire households, with nearly 4.6 million, and the highest number of $100-million-plus households, with 2,300. The number of millionaire households increased by a steady 10%, while $100-million-plus households grew by 7%, joining the ranks of Microsoft (MSFT, news, msgs) Chairman Bill Gates and Berkshire Hathaway (BRK.A, news, msgs) Chief Executive Warren Buffett.
Japan, Britain, Germany and China round out the top five countries with the most millionaire households, in that order. The number of millionaire households increased the most last year in China (up 39%), Spain (up 32%) and Britain (up 30%).
In Europe, the number of millionaire households grew by 26.4% in 2006, the highest of any region in the study, helped by its strong currency against the weakening dollar. In North America, millionaire households grew by just 9% in 2006.
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Japan, Britain, Germany and Italy have the most households in the $100-million-plus bracket, and in terms of growth, China (up 74%), Brazil (up 27%) and Russia (up 26%) saw the highest rates last year.
"China is a force to be reckoned with," says report co-author Bruce Holley, who noted that the country's total assets under management have grown at an annualized rate of 23% over the past five years. China's newest billionaire residents will find themselves in the company of powerful businessmen like Shi Zhengron of Suntech Power Holdings (STP, news, msgs), who lives in Wuxi.
| Country | Millionaire households | Population | Change (2005/2006) | Growth rank |
|---|---|---|---|---|
United States | 4,585,000 | 301,139,947 | 10% | 13 |
Japan | 830,000 | 127,433,494 | 6% | 15 |
Britain | 610,000 | 60,776,238 | 30% | 4 |
Germany | 350,000 | 82,400,996 | 21% | 10 |
China | 310,000 | 1,321,851,888 | 39% | 1 |
Some see a darker side to all this new wealth. "What these numbers disguise is the globalization of inequality everywhere in the world," says Charles Derber, professor of sociology at Boston College and author of "Corporation Nation." "This is the phenomenon of the rich getting richer. And it's not a phenomenon to be happy about -- that's my reaction."
According to Internal Revenue Service data announced last week, income inequality in the U.S. is at its worst since the 1920s (before the Great Depression). The top percentile of wealthy Americans earned 21.2% of all income in 2005, up from 19% in 2004, while the bottom 50% of wage earners earned 12.8% of all income that year, down from 13.4% a year earlier.
As of 2006, the United States held about 40% of the world's wealth and 50% of its millionaire households, according to the Boston Consulting Group. Now in China and India (which ranks 15th on the list of countries with $100-million-plus households but, interestingly, does not appear in the top 15 nations for millionaire households), it's clear a substantial upper class is emerging. But rural poverty numbers also are on the rise, Derber says.
Whether you're for it or not, "this is the name of the game in any part of the world," he says. "It's the Gilding Age of the globe."
This article was reported and written by Maya Roney for BusinessWeek.
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