If the wealthiest 62 billionaires on the planet decided to pool their resources, they could buy up every last thing owned by the 3.6 billion people who make up the poorest half of humanity, according to a new report from Oxfam. The report, which was released just as some of those billionaires were arriving in Davos for the World Economic Forum, shows that the gap between rich and poor has grown wider in recent years: In 2010, the bottom half owned as much as the richest 338 individuals.
Analyzing data collected by Credit Suisse, the anti-poverty organization further reports that the global one percent controlled as much wealth as the bottom 99 percent in 2015 — a milestone that was reached one year earlier than Oxfam had previously predicted.
Most concerning, this growing divide isn’t just the product of the rich getting richer: According to Oxfam, the wealth owned by the poorest 50 percent fell by a trillion dollars over the past five years, a 41 percent drop. The net worth of the richest 62 people grew by $542 billion, a 44 percent gain.
However, the loss of wealth in the bottom half came despite improving conditions for the poorest people on earth. Between 1990 and 2010, the number of humans living in extreme poverty was cut in half. The rate of progress toward eliminating extreme poverty has slowed in recent years, but the trend has not reversed direction.
Thus, the decline in the wealth of the bottom half appears to be driven in part by the growing indebtedness of individuals in advanced countries — a point emphasized by some of the report’s critics.
“The methodology of adding up assets and subtracting debts and then making a global ‘net wealth’ distribution implies that many of the poorest in the world are those in advanced countries with high debts,” said Mark Littlewood, director general of the Institute of Economic Affairs, a British think-tank, to the BBC. “Whilst we might have sympathy for the Harvard law graduate’s plight, it is unclear that worrying about her should be the focus of a development organization.”
Whether or not an indebted American millennial is poorer than a worker with a positive net worth in Bangladesh, both would stand to benefit from Oxfam’s recommendations for reducing inequality, which include cracking down on tax havens to fund greater investment in public services.
The report notes that the plutocratic class has an estimated $7.6 trillion in offshore accounts. If that income were taxed, an extra $190 billion would be available to governments every year. Such revenue could be used to subsidize the cost of public college in the U.S., or to aid in the eradication of preventable illnesses in the developing world.
As Oxfam notes, growing inequality hurts the world’s poorest even when the cohort’s absolute living standards are improving. The charity finds that as much as 30 percent of all African financial wealth is held offshore, costing the continent $14 billion in tax revenues each year. Were that wealth invested in social welfare instead of in the Cayman Islands, 4 million children’s lives could be saved through better health care, and enough teachers could be hired to put every African child into a classroom.
“As an organization that exists to tackle poverty, Oxfam is unequivocal in welcoming the fantastic progress that has helped to halve the number of people living below the extreme poverty line between 1990 and 2010,” the charity writes. “Yet had inequality within countries not grown during that period, an extra 200 million people would have escaped poverty.”