The 62 Richest People in the World Now Own as Much Wealth as the Poorest 3.5 Billion
After years of hearing about the domination of the 1%, sometimes it can be hard to be surprised.
Indignation, shock, sadness — these once-reflexive reactions to the latest study showing the rich are getting richer and the poor are getting poorer have begun to fade. Over the past few years, each new statistic has driven home the point the richest among us are indeed incredibly, unfathomably wealthy, but the numbers on their own increasingly fail to command attention. The world is afflicted by inequality data fatigue.
But every now and then, a new finding is so jolting it serves as a stark reminder the inequality crisis is far more dire than most people realize think — and it's growing even worse very quickly. A stunning report by Oxfam on global inequality has several revelations that do just that.
The most shocking statistic in the report, released Sunday, is this: In 2015, a mere 62 people held the same amount of wealth as "the bottom half of humanity" — 3.5 billion people. Identifying the reasons why this is happening is as important as the statistic itself.
Things are getting bad, quickly: In 2010, it took 388 individuals to match the wealth of the bottom half. But in the past five years, wealth has become so concentrated in the hands of the global elite that the number has reduced dramatically:
According to the Oxfam analysis, the wealth of those 62 individuals has grown by 44% in the past six years. In 2010, they collectively held around $542 billion. Today they own $1.76 trillion.
The wealth of the poorest 3.5 billion actually fell by 41% during that same period. This is particularly noteworthy given the fact that the number of people living below the extreme poverty line has fallen significantly around the world for the past few decades. Those two facts might seem to be in tension with one another, but they're not, mainly because the poverty line is usually measured through income, which can increase independently of fluctuations in wealth.
Daily incomes for the bottom 10% of the world's population have risen by less than 1 cent every year.
Gawain Kripke, the director of policy and research at Oxfam America, says that in some cases those two trends are directly related.
"You can actually lose wealth even while you're gaining income," Kripke told Mic. "Both can happen as the same time, and in some cases, they could even be related. You might sell a cow to start a business, or you might take a loan — and go into debt or 'negative wealth' — to plant a crop. At the end, you might have more income, but less wealth."
Looking farther back, since 2000 just 1% of the increase in global wealth has gone to the bottom half of the world's population, according to the report.
By contrast, the global top 1% — a group that's less exclusive than the top 62, and which as of last year controls more wealth than the bottom 99% combined — has captured about half of the global increase in wealth since the turn of the century.
For nearly a quarter century, daily incomes for those in the bottom 10% of the world's population have risen by less than 1 cent a year.
Why is this happening? A great deal of this divergence can be explained by the sharply differing returns that come from wealth generated by capital, or ownership of assets, versus wealth generated through labor.
The income of the 1% is mainly derived from capital income, such as capital gains, interest and dividends. For the past three decades or so, the share of income going to capital has been rising. But the share of income going to labor — that is, money from wages and salaries and benefits that serve as the primary source of income for most people — has generally been on the decline.
According to French economist Thomas Piketty, this is part of how capitalism naturally operates when uninterrupted by the kind of economic shocks and world wars that rocked the world in the 20th century. Piketty predicts that the process of wealth accumulation will continue to outpace growth and only accelerate, barring some kind of unforeseen calamity or major redistributive measure.
Even among those who work, sharp increases in pay have mostly gone to workers at the very top of the latter, such as executives. In the United States, over the past 50 years CEOs have gone from making 20 times the pay of a typical worker nearly 300 times as much.
So while the entire global economy has been growing more productive and generating more prosperity, the fruits of growth have chiefly been flowing upward into the hands of an ever more powerful ownership class.
The fix? Oxfam's report also sheds light on the unique schemes the extremely wealthy devise to protect their wealth from tax requirements, mainly through offshore tax havens.
Economist Gabriel Zucman at the University of California, Berkeley has estimated that "roughly 8% of the global financial wealth of households is held in tax havens, about $7.6 trillion." Other credible estimates put the number much higher — up to $32 trillion.
In the United States, the uber wealthy have forged a much more powerful shield against the tax code than any time in recent history. The New York Times recently calculated that the 400 highest-earning taxpayers paid nearly 27% of their income in federal taxes during Bill Clinton's presidency, but were paying less than 17% by the middle of President Barack Obama's time in office. That means billionaires are paying roughly the same share of their income as someone making about $100,000 a year.
Addressing the concentration of wealth in the hands of the few at the expense of the many is more complicated than more effective taxation on wealth — although that is essential. Issues like monopolistic tendencies in the economy that stifle competition also have to be dealt with. The evisceration of the ability of working people to organize for power collectively in a globalized economy has to be addressed.
As the world searches for solutions to these problems, the gaps between the haves and the have-nots will only continue to widen.