Just 162 billionaires have the same wealth as half of humanity
In a stark reminder of gaping global inequality, a new report by Oxfam reveals that 162 billionaires, including Facebook’s Mark Zuckerberg and Amazon’s Jeff Bezos, have the same wealth as the poorest half of the world. By Laura Paddison, HuffPost US.
There are 2,153 billionaires globally, and, in 2019, they held more wealth combined than 4.6 billion people, according to the report, which uses data from the Credit Suisse Global Wealth Report and Forbes’ billionaire rankings.
The report uses a striking analogy to put these amounts of wealth in context. If everyone sat on their wealth piled up in $100 bills, most people would be sitting on the floor, a middle-class person from a rich country would be the height of a chair, and the world’s two richest men would be sitting in space.
Oxfam’s report is published annually to coincide with the start of the World Economic Forum gathering in Davos, where high-profile policymakers, business leaders and the wealthy take their private jets to a Swiss ski town to discuss how to “improve the state of the world.”
Once someone is very wealthy, the report points out, it’s easy to just watch the money accumulate because the rich can afford the best investment advice. Billionaire wealth has increased by an average of 7.4% a year since 2009, according to the report published by Oxfam, an international development nongovernmental organization. And 2019 was a good year for the ultrarich. Despite their wealth levels dipping at the start of the year, they quickly rebounded, and the world’s 500 richest people managed to add $1.2 trillion to their wealth over the course of the year, according to a Bloomberg analysis.
For some, the ability of individuals to accumulate vast levels of wealth, more than some countries’ entire gross domestic product, is a sign of the American Dream in action. The U.S. has the highest concentration of billionaires (705 individuals) and last year was the only country to see an increase in its billionaire population.
But for others it’s a sign that something’s gone wrong. Economist Stephanie Kelton last year tweeted, “No one makes a billion dollars. You TAKE a billion dollars.” And Rep. Alexandria Ocasio-Cortez (D-N.Y.) said in July that “a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health is wrong.”
“Extreme wealth is a sign of a failing economic system,” according to the report, which calculates that about a third of billionaire wealth exists because of inheritance. President Donald Trump’s fortune, for example, was built off thehundreds of millions of dollars he was given or inherited from his father.
The gap between the world’s richest and poorest remains stark. Research by French economist Thomas Piketty found that the benefits of global growth have not been shared equally. From 1980 to 2016, the poorest 50% of people received 12 cents of every dollar of global income growth, while the richest 1% got more than double that, with 27 cents of every dollar.
Even though estimates of the wealth of the world’s poorest have been revised upward this year, the rate at which we are reducing global poverty has fallen by half since 2013, according to the World Bank.
And while huge numbers of people have been pulled from extreme poverty over the last few decades, 735 million people still live in extreme poverty ― meaning they survive on $1.90 or less a day ― and nearly half of the world (3.4 billion people) live on less than $5.50 a day.
“Global inequality is at crisis levels,” Rebecca Gowland, head of inequality at Oxfam, told HuffPost.
Women put in billions of hours of unpaid, undervalued care work
This report, called “Time to Care,” puts a spotlight on those who care for the young, the sick and the elderly, the vast majority of whom are women and girls working long hours for little or no pay.
Globally, women provide 12.5 billion hours a day of care work without pay, which the Oxfam report calculates adds at least $10.8 trillion of value to the economy every year.
This work is undervalued socially and economically, but, the report says, “It also lays the foundations in society that make possible enormous economic wealth accrued by others and helps to generate enormous economic wealth.”
Gowland gave the example of a woman in rural Zimbabwe who has to walk four hours a day to fetch water for her family. “The consequences of that are really obvious,” she said. “Girls are pulled out of school to do this unpaid care work, women can’t access fair, decent jobs and wages, and the biggest thing is the fact that they just don’t have time to contribute to societies, to any kind of political discourse or engagement with how their societies are run.”
This care crisis is not just affecting developing countries. The U.S. child care system, for example, is costing the country hundreds of billions of dollars a yearin lost wages and lost opportunities, according to a report published Wednesday by the Economic Policy Institute (EPI). Child care providers in America are overwhelmed and underpaid, with a median wage of $12 an hour, according to the report’s findings. Meanwhile, parents, most often women, are being forced to give up work or turn down better-paying jobs because of the expense of child care.
The burden of caregiving looks set to increase. The International Labor Organization estimates, for example, there will be 100 million more older people needing care by 2050. Then there are the effects of the climate crisis, which are causing myriad health problems, forcing people to leave their homes and depriving them of water and food.
“These factors threaten to further exacerbate gender and economic inequalities and fuel a spiraling crisis for care and carers,” says the report.
At the same time, most countries have no plan to deal with this, says the report, and are instead reducing public spending, increasingly privatizing health and education, and raising taxes on the poor.
“If world leaders meeting this week [at Davos] are serious about reducing poverty and inequality,” said Danny Sriskandarajah, the chief executive of Oxfam Great Britain, “they urgently need to invest in care and other public services that make life easier for those with care responsibilities, and tackle discrimination holding back women and girls.”
We know the solutions. There’s just not the will to implement them.
The report calls for a swath of policy changes, such as free and universal public services ― like education, child care and health care ― and policies to limit the influence of companies and the superrich.
Oxfam suggests a progressive taxation system, which closes the loopholes that allow companies and wealthy individuals to avoid tax. Amazon, for example, paid $0 in corporate income tax in 2018 despite making $11 billion in profits.
“The entire economy, and many corporations within it, exist solely to the benefit of its of their wealthiest stakeholders,” Marshall Steinbaum, an assistant economics professor at the University of Utah, told HuffPost. Where before we had companies whose workers were collectively represented and a society in which businesses and the wealthiest were taxed proportionately more than the less wealthy, he said, now companies’ only purpose is to benefit shareholders and we have low marginal income tax rates that allow huge fortunes to be amassed.
Increasing taxes on the wealth of the 1% by 0.5% could raise enough over the next decade to create 117 million jobs in education, health and elder care, and close the care deficits, the report says.
Though these kind of policy changes may feel remote in countries like the U.S., Gowland said, “we are slowly seeing some governments decide to take on more progressive policies.”
Uruguay, for example, implemented legislation in 2017 that enshrines in law a right to care for all children, older people and people with disabilities, meaning the state is obliged to provide good-quality care services.
And New Zealand is trying to tackle inequality with its new well-being budget.The country has pledged to prioritize citizen well-being over economic growth in its spending and in the way it measures its success.
“It is sobering that this is the first time we have had a national budget that explicitly focuses on well-being,” Anna Matheson, senior lecturer in health policy at Victoria University of Wellington, New Zealand, told HuffPost last year. “Governments worldwide are missing the crucial and pivotal role they play in stewardship, and in creating and maintaining collective well-being.”
Chances of bold policies aimed at inequality passing under the Trump administration appear incredibly slight, but the Democratic presidential candidates are raising the issue. Sen. Elizabeth Warren (D-Mass.) sent billionaires into a panic with a proposed 2% wealth tax on those earning over $50 million.
And even the International Monetary Fund, which traditionally supported lower taxes, has called for taxes to be raised on the rich to tackle inequality.
“It’s not changing yet,” Growland admitted of inequality, “and that is a question of political will. But now, more than ever, we need to keep telling this story. We can’t afford to let this divide continue.”