World's 8 richest men are worth as much as 3.6 billion people
Even as the world’s economies have expanded, their riches are increasingly concentrated in the hands of a few -- so much so that the richest 8 billionaires today hold as much wealth as the poorest half of humanity.
That statistic comes from the charity Oxfam, which will present its report on widening inequality at the World Economic Forum annual summit, which kicks off on January 17 in Davos, Switzerland. While the event is attended by the world’s top business executives, policy makers and academics, the forum often focuses on issues touching on economic justice, such as income inequality. This year’s forum theme, for instance, is “responsive and responsible leadership.”
Oxfam said it didn’t name the richest 8 billionaires in its report because its goal is to call attention to the political and economic mechanics that are creating widening inequality. Still, the 8 billionaires are those at the top of the Forbes’ billionaire list, many of whom have pledged to spend large portions of their fortunes on charity.
- Microsoft founder Bill Gates, $75 billion
- Spanish retail magnate Amancio Ortega, $67 billion
- American investor Warren Buffett, $60.8 billion
- Mexican investor Carlos Slim Helu, $50 billion
- Amazon.com founder Jeff Bezos, $45.2 billion
- Facebook founder Mark Zuckerberg, $44.6 billion
- Oracle founder Larry Ellison, $43.6 billion
- Media mogul Michael Bloomberg, $40 billion
Yet the problem goes deeper than that, Oxfam argues, since the rich-get-richer phenomenon is creating a feedback loop, where the richest have more resources to spend on creating favorable outcomes, such as lower taxation for the wealthy or lobbyists who can help sway lawmakers.
“It puts in in stark terms the biblical proportions of the economic health of the world, where 8 people have as much economic power as 3.6 billion people,” said Gawain Kripke, the director of policy and research at Oxfam American. “There is a moral frame to this: is it right, that so much economic power adhere to those few individuals? Is our economy working right if this is what is happening? Is it moral that so many people struggle when so much wealth is available?”
The incomes of the poorest people increased a mere $65 between 1988 to 2011, or about an additional $3 per year, the Oxfam report found. Yet the incomes of the richest 10 percent increased 182 times as much, putting an additional $11,800 in their pockets.
The research echoes recent findings from economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman, who in December published research that examined how Americans experienced the economic expansion since the 1970s.
Roughly 117 million American adults are living on income that has stagnated at $16,200 per year before taxes and transfer payments, they found. At the same time, the richest 1 percent have enjoyed growing income levels.
Their conclusion: the bottom half of the U.S. population has been “shut off from economic growth for over 40 years.”
Along with widening inequality has come a sense of anger and unfairness, which is credited with helping Donald Trump win the presidential election in November. His populist rhetoric, which includes blaming immigrants for the middle class’ economic problems as well as trade competition from China and Mexico, reflects a worldwide phenomenon, Kripke said.
The populist rhetoric “includes a critique that we share: the economy isn’t working well, and it’s not delivering benefits to working and middle class incomes, and incomes are stagnating there,” he said. “But we don’t share the diagnosis of the problem, and the solution set which includes being xenophobic isn’t going to help the economy, as far as we can tell.”
Along those lines, Kripke said he believes Mr. Trump’s tax and economic proposals are likely to exacerbate economic inequality rather than reduce it. An analysis of Mr. Trump’s tax plan by the Tax Policy Center found that middle-class families would receive tax cuts of about 2 percent, while the richest 1 percent would see a tax reduction of 13.5 percent Meanwhile, 8 million families including many single-parent households would pay more.
Instead, governments should be designed for the bottom 99 percent of income earners, Oxfam argues. In the charity’s view, that means governments should listen equally to its citizens, not just the richest, and create progressive tax systems that increase rates on the very wealthy and puts a stop to tax dodges.
Unfortunately, the inequality trend isn’t projected to end anytime soon. During the next two decades, 500 people will leave $2.1 trillion in wealth to their heirs, or more than the GDP of India. Oxfam projects that if inequality continues, the world may see its first trillionaire in 25 years.
