Business First Look

Oxfam: World's eight richest people have same wealth as poorest half

A report from the antipoverty nonprofit Oxfam found that just eight people, all men, possess as much wealth as the poorest half of the world's population.

Mark Zuckerberg, chairman and CEO of Facebook, waves at the CEO summit during the annual Asia Pacific Economic Cooperation (APEC) forum in Lima, Peru, in November 2016. The eight individuals who own as much as half of the rest of the planet are all men, and have largely made their fortunes in technology.
Esteban Felix/AP/File | Caption

Hours ahead of the annual gathering of world leaders in the Swiss ski town of Davos, an anti-poverty organization released a stark analysis of the global poverty gap: just eight men, mostly Americans, own as much wealth as the 3.6 billion people who make up the poorest half of humanity.

“Public anger with inequality is already creating political shockwaves around the globe, as seen recently with the election of Donald Trump here in the US, and Brexit in the UK,” Oxfam said in a press release announcing the report. “But rather than moving forward with a constructive vision to unrig the rules, we are seeing dangerous, often xenophobic approaches, which blame inequality on the very people who bear its greatest burdens and empowers special interests to rig the rules even more.”

The Oxfam analysis is a sobering warning ahead of the World Economic Forum, the mission of which is “improving the state of the world.” But the organization also suggests solutions to close this gap, which include raising minimum wages and improving access to healthcare and education.

Oxfam updated its calculation of the wealth gap by using Forbes’s billionaires list that was published in March 2016. According to the Forbes list, Bill Gates is the world’s richest individual. The Microsoft founder is estimated to have a net worth of $75 billion. Mr. Gates has attempted to give away most of his wealth through philanthropy, although he has seen his fortune rise by 50 percent, or $25 billion, since he announced his plans to leave Microsoft in 2006. Among the other seven men that make up this list, five are American, one is European, and one is Mexican.

Oxfam released the same report a year earlier, calculating that the richest 62 people on the planet owned as much wealth as the bottom half of the population. Oxfam then revised that figure down to eight following new information gathered by Swiss bank Credit Suisse.

Oxfam notes this gap has further divided the richest and poorest 10 percent in the United States and in countries like Nigeria, Bangladesh, Britain, and Brazil. Between 1988 and 2011, the poorest 10 percent of Americans saw their incomes increase by an average of $427 while the richest 10 percent saw their income increase by $13,490. Overall, seven out of 10 people in the world live in a country that has seen a rise in inequality in the last 30 years, notes Oxfam.

"It is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day," Winnie Byanyima, executive director of Oxfam International, who will be attending the meeting in Davos, said in a statement. "Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy."

To address this problem, the organization says a new approach is needed. It called on President-elect Trump, Congress, and world leaders to develop policies that include: stopping some from sheltering their wealth in offshore accounts; raising the minimum wage; ensuring equal pay for equal work; building and investing in a “social safety net for everyone”; and ensuring everyone has access to good and affordable healthcare and education.

Some world leaders in Davos joined Oxfam on Monday in calling for new ways of addressing this problem.

“There is no point in blaming economic globalization for the world’s problems, as that is not the case and will not help with solving the problems,” China’s President Xi Jinping said at the start of the World Economic Forum, according to a statement. “If one is always afraid of the bracing storm, one will get drowned in the ocean sooner or later.”

Instead, Mr. Xi called on “more effective international cooperation and new models of global governance, bold action and a commitment to avoid protectionism,” according to the statement.

The Trump administration has also pledged to improve overall American wealth through economic growth. Mr. Trump has promised to grow the economy – by as much as 4 percent a year, as The Christian Science Monitor’s Simon Montlake reported in December. But economists aren’t sure such growth will distribute wealth evenly across the country: 

By Mr. Trump’s reckoning, a thriving economy lifts all workers – and that has been true in the past, most recently during the 1990s. But many economists counter that the Reagan-era economic mantra Trump is adopting has been a primary driver of income inequality – putting more money in the pockets of the rich and upper-middle class and keeping a lid on middle-income earnings.

Today’s economy shows the continuing effects of those Reagan-era shifts, and other global trends such as automation and outsourcing, these economists add. Some households are moving up the income ladder, but since 2000 more are sliding down. And the likelihood that today’s youth will earn more than their parents – a staple of the American dream – appears to be declining

 This report contains material from the Associated Press and Reuters.