Private jets and trillion-dollar windfalls: Why 2019 was a great year to be rich
Any year is a good year to be rich, but 2019 was particularly remunerative. All told, the 500 masters of the universe topping the Bloomberg Billionaires Index gained $1.2 trillion in net worth in the past year—a remarkable 25% gain. To put that figure in perspective, $1.2 trillion is about the same as the entire gross domestic product of Mexico. Their total net worth—now $5.9 trillion—exceeds the GDP of every country in the world, except for the United States and China. In September, the US government reported that income inequality in the country had hit the highest level since the Census Bureau began tracking it more than five decades ago.
Of course, it’s not all bad news for lower income earners. Unemployment in the US also hit a 50-year low in 2019, forcing employers to raise wages. Based on Federal Reserve Bank data, the Wall Street Journal estimates that wages for the lowest-earning 25% of Americans rose a healthy 4.5% in the past year.
Still, the gains are relative: In November, managers earned about twice as much as the employees they supervise, according to Labor Department data. And while wages for the richest 25% increased less than the bottom 25%, wealthier Americans receive more income from capital gains and investment income than from wages.
Here are a few other reasons why 2019 was a banner year for the rich:
Wealthier Americans are living longer
They say money can’t buy you happiness, but it seems able to buy healthiness. Senator and presidential hopeful Bernie Sanders recently commissioned a study of wealth and age by the Government Accountability Office, with some dramatic findings. Among people born between 1931 and 1941 (Sanders’s cohort), nearly 75% of people who had been in the top 20% of earners at mid career were still alive in 2014. Among the bottom 20% of earners, just 52% were still kicking.
Private jet sales are skyrocketing
As the year winds down, the New York Times reports that the sale of private jets soared 15% in 2019. These planes start at about $3 million and can cost several dozen million more—putting them out of range for all but the best-financed midlife crisis. Just the operating expense of these mini airliners can range from nearly $1 million to about $4 million—or 16-63 times the median American family’s earnings.
Tech billionaires multiplied their wealth
Even by billionaire standards, tech titans’ gains were hyperbolic. In 2019, for instance, Facebook CEO Mark Zuckerberg’s net worth increased $27.3 billion, or about $75 million per day. Zuckerberg is one of 6 techies in the top 10 on Forbes’s Real-Time Billionaires list. With $77.1 billion, Zuckerberg beats Larry Ellison, Carlos Slim Helu, and Larry Page but trails Bill Gates and Jeff Bezos. Bezos, the Amazon founder and rocketeer, saw his net value blast off from $12.3 billion in 2010 to around $115.9 billion today.
Generational wealth continued to grow
America may bill itself as the land of opportunity, but not of equal opportunity. Many of the country’s richest residents are rich from birth. The 15 wealthiest dynasties in the US are worth a combined $618 billion. And more than half of that amount—$348.7 billion—is held by just three families: the Waltons, Kochs, and Marses. Their fortunes have increased 5,868% since 1982. In about the same timeframe, inflation-adjusted median income in the US has gone up by 22%.
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