By Emily Peck
A new Oxfam report finds income inequality is benefiting a few billionaires who already have “biblical” fortunes.
Just eight super-rich men hold the same amount of wealth as the poorest half of the world’s population, according to an analysis from the charity Oxfam released Sunday night.
Six of these billionaires, from Forbes’ list of the world’s richest people, are American entrepreneurs: Microsoft co-founder Bill Gates, Berkshire Hathaway chairman and CEO Warren Buffett, Amazon founder and CEO Jeff Bezos, Oracle co-founder Larry Ellison, former New York Mayor Michael Bloomberg and Facebook founder and CEO Mark Zuckerberg. Rounding out the list are Carlos Slim, the Mexican tycoon, and Amancio Ortega, the Spanish founder of a retail conglomerate that includes clothing chain Zara. Together their net wealth ― assets minus debts ― amounts to $426 billion.
We cannot name the bottom half of humanity, more than 3.6 billion people, with that kind of precision, but they mostly live in the developing world.
The Oxfam statistic is one of the starkest ways to portray the disturbing rise of economic inequality, which can be a hard concept to grasp when portrayed in percentages and billion-dollar denominations. The global anti-poverty group has been tracking inequality since 2014.
Worsening inequality threatens to upend the very fabric that’s held democracies together in the post-World War II global order. In the United States, the widening gulf between the rich and everyone else helped propel Donald Trump into office. Overseas, the trend is credited with sparking Brexit, the U.K.’s vote to leave the European Union.
“Left unchecked, growing inequality threatens to pull our societies apart,” Oxfam writes in its report, citing Brexit, Trump’s campaign and “a worrying rise in racism and the widespread disillusionment with mainstream politics.”
In 2016, the richest 1 percent of the world held slightly more than half of the wealth of the entire planet, Oxfam notes. And the 1,810 billionaires on Forbes’s list ― 89 percent male ― hold $6.5 trillion, as much wealth as 70 percent of humanity.
Put another way, billions of people are fighting over crumbs from half of a pie, while the rich dig into fat slices all to themselves.
For its analysis, Oxfam used Forbes’ ranking of global billionaires and wealth data from Credit Suisse. According to the wealth data, 80 percent of the bottom half of the world’s population are adults living in Africa and India. They’re younger and more likely to be single and poorly educated. Women who are poorly educated are even more likely to have very little wealth.
A very small sliver of the bottom half live in the United States, mainly because the wealth data looks at net wealth, subtracting the amount of debt a person has from assets. That means, for example, that young adults in the U.S. who have a big mortgage and maybe a car loan and a student loan will, on paper, seem poor.
Some economics writers, Felix Salmon of Fusion most prominently, have used this point to discount Oxfam’s report. It’s a fair criticism, Gawain Kripke, Oxfam’s director of policy and research, told The Huffington Post. But it’s a footnote, not a reason to dismiss the disturbing findings of the report, Kripke said.
If you ignore debt entirely, it would take 56 of the wealthiest individuals to equal the wealth of the bottom 50 percent, according to Oxfam’s report.
“The underlying trend is the same: At the very pinnacle of the economic pyramid, rich people are getting progressively and rapidly richer, while the rest of humanity is muddling along,” Kripke said. He called the wealth of the top eight individuals “biblical.”
Last year, when Oxfam did its report, it took 62 billionaires to equal the bottom half of the world. The change this year seems drastic because of improvements in the quality of the data Credit Suisse was able to get. If Oxfam had used that improved data last year, it would’ve taken just 9 billionaires to reach parity with the world’s bottom half, Kripke said. (Number nine? Charles Koch.)
Partly driving last year’s growing divide was the booming stock market, which fed even more money to wealthy folks invested in the market. The rising value of the dollar also contributed.
Trump, whose political fortune has benefited from increasing economic dissatisfaction, ranks 324 on the Forbes billionaires list ― tied with “Star Wars” creator George Lucas. The president-elect has nominated the wealthiest group in American history to his Cabinet. Combined, these future public servants hold about $12 billion, according to a recent estimate from Bloomberg.
Neither Brexit nor Trump’s policy proposals ― tax cuts, relaxed regulations, renegotiated trade deals ― are viewed as offering a solution to the growing economic disparity.
The administration’s first major policy push ― repealing the Affordable Care Act ― would take health insurance and other health protections away from millions, while giving a tax cut to the richest Americans, HuffPost’s Jonathan Cohn reported recently.
That’s a sure way to exacerbate income inequality.
Rising inequality causes more than a sense of moral outrage and the election of reality TV stars. There’s a wide body of research that shows inequality adversely affects the health of those at the bottom, raising the risk of cardiovascular disease, increasing suicide rates and shortening lifespans. Some attribute the rise in the death rate of white people and the heroin epidemic to inequality.