Eight billionaires are as wealthy as half the world’s population, latest Oxfam statistics show, as the gap between rich and poor is revealed as being greater than feared.
Bill Gates tops the list of wealthiest people in the world. The Microsoft founder joins seven others who own the same amount of wealth as the 3.6 billion people who form the poorest half of the world’s population.
The shocking statistics are revealed in Oxfam’s ‘An Economy for the 99 Percent’ report, published on Monday, as global political and business elites gather in Davos for their annual meeting.
Oxfam calculated last year that 62 people owned the same wealth as the planet’s poorest half.
But new data from India and China now available to the organisation reveals that last year’s number could have been drastically reduced to just nine billionaires.
Oxfam’s report today shows how the world’s richest 1% retained their share of global wealth and own more than the other 99% combined. This concentration of wealth at the top is “holding back the fight to end global poverty”, Oxfam said.
Using Credit Suisse databank, Oxfam said that the total global wealth currently stands at $255 trillion.
Estimates from Credit Suisse find that collectively the poorest 50% of people have less than a quarter of 1% of global net wealth - the equivalent of $409 billion.
Oxfam used the Forbes billionaires list to add up how many of the richest individuals it takes to meet or exceed this sum. The top eight have a net wealth of $426 billion - slightly more than the bottom half of humanity.
But the Institute of Economic Affairs (IEA) accused Oxfam of “demonising capitalism”, adding that the organisation’s claim that eight people own as much wealth as half the world is “spurious”.
The report describes how the inequality crisis is being fuelled by companies whose business models are increasingly focused on delivering ever-higher returns to wealthy owners and top executives.
“Companies are structured to dodge taxes, drive down workers’ wages and squeeze producers instead of fairly contributing to an economy that benefits everyone,” Oxfam said.
Mark Goldring, Oxfam GB chief executive, said: “This year’s snapshot of inequality is clearer, more accurate and more shocking than ever before.
“It is beyond grotesque that a group of men who could easily fit in a single golf buggy own more than the poorest half of humanity.
“While one in nine people on the planet will go to bed hungry tonight a small handful of billionaires have so much wealth they would need several lifetimes to spend it. The fact that a super-rich elite are able to prosper at the expense of the rest of us at home and overseas shows how warped our economy has become.
“Inequality is not only keeping millions of people trapped in poverty, it is fracturing our societies and poisoning our politics.
“It’s just not right that top executives take home massive bonuses while workers’ wages are stagnating or that multinationals and millionaires dodge taxes while public services are being cut.”
Oxfam is calling for a fundamental change in the way we manage our economies so that they work for everyone, not just a privileged few.
Mark Littlewood, Director General at the IEA, said: “Once again Oxfam have come out with a report that demonises capitalism, conveniently skimming over the fact that free markets have helped over 100 million people rise out of poverty in the last year alone.
“Their claim that eight people own the same wealth as half the world is as spurious as their methodology - adding assets and subtracting wealth to make ‘net wealth’ - implies that some of the ‘poorest’ in the world are those with high debts.
“It is misleading at best to label the average university graduate who has accumulated £50,000 of debt among the world’s poorest, without any consideration of their future earning potential.
“Aggregating net wealth figures is largely meaningless headline fodder. Unfortunately there are some corrupt countries where wealth is accumulated at the expense of the poor but this is a case for tackling big government, not bashing free markets.
“As an ‘anti-poverty’ charity, Oxfam seem to be strangely preoccupied with the rich. For those concerned with eradicating absolute poverty completely, the focus should be on ensuring the right institutional frameworks are in place to encourage economic growth, instead of obsessing over the wealthy.”
The report was published amid increasing concerns about the economic status quo with the Bank of England’s Chief Economist warning recently that a ‘rebirth of economics’ is needed to replace out-dated models.
Oxfam said that, while the number of people living in extreme poverty has decreased in recent decades, 700 million more people would have escaped poverty if the gap between rich and poor had been addressed.
Oxfam’s report describes how life for the world’s poorest people remains brutally hard. Between 1988 and 2011 the incomes of the poorest 10% increased by just $65, while the incomes of the richest 1% grew by $11,800 – 182 times as much.
The world’s eight richest people, according to Forbes:
1. Bill Gates: US founder of Microsoft (net worth $75 billion)
2. Amancio Ortega: Spanish founder of Inditex, Zara fashion chain (net worth $67 billion)
3. Warren Buffett: US CEO, largest shareholder in Berkshire Hathaway (net worth $60.8 billion)
4. Carlos Slim Helu: Mexican owner of Grupo Carso (net worth: $50 billion)
5. Jeff Bezos: US founder, chairman, chief executive of Amazon (net worth: $45.2 billion)
6. Mark Zuckerberg: US chairman, CEO, co-founder of Facebook (net worth $44.6 billion)
7. Larry Ellison: US co-founder, CEO of Oracle (net worth $43.6 billion)
8. Michael Bloomberg: US founder, owner, CEO of Bloomberg LP (net worth: $40 billion)
Oxam described the poorest as the “biggest losers of our distorted global economy”, adding that women are particularly worst effected as they tend to work in the worst-paid jobs and take on the lion’s share of unpaid care work.
On current trends it will take 170 years for women to be paid the same as men, Oxfam said.
Oxfam is calling for a “more human economy”, key features of which would include:
Improved cooperation between governments to prevent tax dodging that costs poor countries at least $100 billion every year
Government action to encourage companies to act for the benefit of their workforces and wider society as well as their executives and shareholders
Taxes on wealth to generate funds for healthcare, education and job creation
Action to tackle the barriers that hold back women including lack of education opportunities and the burden of unpaid care work.
In the UK, the average pay of FTSE100 chief executives is 129 times that of the average employee – and equivalent to the earnings of 10,000 people working in garment factories in Bangladesh, Oxfam said.
Golding added: “Extreme inequality isn’t inevitable – with the right policies, world leaders can rebalance our broken economies so they work for all of us and bring the end of poverty closer.
“We need a new common-sense approach that ensures a fair deal for workers and producers; requires those who can afford it to pay their fair share of tax; and ensures that women get a fair chance to realise their potential.”
“Oxfam welcomes the Prime Minister’s pledge to tackle inequality in the UK - we’d like to see her make a similar commitment on the global stage. Standing up to powerful interests and corporate bad behaviour won’t be easy but is vital if we’re to ensure a better future for people at home and around the world.”
During the World Economic Forum, people are being urged to sign a petition to the world’s 1,810 billionaires asking them to help build an economy that works for everyone.