If you want to run into a celebrity, you go to Hollywood. If you want to run into a billionaire, you should move to San Francisco.
There are more American billionaires than ever before, according to a new study, and Silicon Valley is their home turf. One out of every 11,600 people in San Francisco is a billionaire. That makes San Francisco, globally ranked fourth in number of billionaires, the city with the most billionaires per capita — by far.
That’s according to the annual census of billionaires by Wealth-X, which tracks the 10-figured.
Billionaires have had a rough year. The American left has cast them as corporate villains whose exorbitant wealth reflects a system that no longer works. They have become political piñatas, and not just the billionaire in the White House. A growing number of billionaires have even become critics of capitalism, saying it must be reformed in order to be saved.
And in 2018, their global wealth actually did decrease. There are fewer of them, too. The survey finds that the total number of billionaires fell by 5 percent to about 2,600 worldwide, with their total wealth declining by 7 percent to about $8.6 trillion.
Much of that drop, though, reflects rough times for billionaires in Asia, where the number of the megarich fell substantially, largely due to economic slowdowns in China. Here in the US? Things are going pretty okay.
The new conversation in the US about billionaires makes sense given that the number of them hit an all-time high in 2017. And the number of American billionaires increased by 4 percent last year, “consolidating its position as the world’s dominant billionaire country,” although their net worth fell by 5 percent last year.
In some circles in San Francisco, it’s hard not to personally encounter a billionaire who is doing pretty okay. In second place is New York City, which has merely one billionaire for every 81,000 people.
Statistics like that throw into sharp relief the challenge for Silicon Valley and its leaders in 2019: They are stereotyped, and perhaps not unfairly, as out of touch with the people whose lives they affect around the world. If you’re a billionaire who dines with other billionaires, skis with other billionaires, and raises your family alongside other billionaires, then maybe your work decisions are based on a narrow understanding of the world outside of San Francisco.
Those statistics should also tell you a lot about San Francisco, which, until very recently, has barely grown in total size since 1950. So the denominator has stayed static at a time of enormous wealth creation.
Meanwhile, the amount of money in a fairly small city makes the cost of living higher for working-class people, especially given the city’s limited supply of housing — displacing less-wealthy people out of the city proper. And critics might say that San Francisco hasn’t focused on problems like homelessness or drug prevention in part because the city caters to billionaires and tech companies.
The concentration of wealth explains why city leaders are now pushing for measures like an IPO tax.
The run-up in value of tech stocks in recent years had made those leaders far richer, too, although 2018 was not as much of a banner year. Today, about 5 percent of billionaires come from the tech industry, and five of the 10 wealthiest people in the world come from the tech industry. The average tech billionaire owns $6 billion in wealth, though that figure is distorted greatly by the very richest people in tech like Jeff Bezos, who is worth more than $130 billion.
The survey also offers a revealing look each year at who these billionaires really are:
- 56 percent of billionaires are self-made — meaning that their money primarily did not come from a hefty inheritance.
- Billionaires are, in general, old. The average age is just over 65. And while the young might be rich in Silicon Valley, only about 10 percent of global billionaires are under the age of 50. And they are extremely disproportionately male — 88 percent of the world’s billionaires are men.
- And in an era when billionaires are being questioned more than ever about the role they play in the world, the top hobby for these billionaires is philanthropy. Calling that a “hobby” may be quite accurate — given that it’s a good question whether much of their philanthropy really does any good.
Recode and Vox have joined forces to uncover and explain how our digital world is changing — and changing us. Subscribe to Recode podcasts to hear Kara Swisher and Peter Kafka lead the tough conversations the technology industry needs today.