Jab at the wealthy comes just ahead of Davos gathering
We all know the rich are getting richer and the poor are getting poorer — but the inequality gap may be widening faster than you think. Within two years, the top 1% will have more wealth than the remaining 99% of people on the planet, a new study says.
Just in time for the billionaire-and-politician get-together in Davos, Switzerland, Oxfam’s report on Monday lays out the increasing concentration of global wealth among a small elite.
This first chart, based on Credit Suisse Data from 2000-2014, shows how the bottom 99% has been losing wealth over the past decade or so, and the top 1% has been gaining:
“In 2014, the richest 1% of people in the world owned 48% of global wealth, leaving just 52% to be shared between the other 99% of adults on the planet,” said development organization Oxfam in its report. Nearly all of that remainder is owned by people in the richest 20%, and just 5.5% goes to 80% of the world’s population.
And then here’s the depressing kicker: “If this trend continues, of an increasing wealth share to the richest, the top 1% will have more wealth than the remaining 99% of the people in just two years ... with the wealth share of the top 1% exceeding 50% by 2016,” said Oxfam.
Here’s the chart on that:
The most commonly cited source of wealth for the rich is a Wall Street connection, said Oxfam.
Among the “predominantly male and greying” elite who’ve made money from the financial sector is Berkshire Hathaway BRK.B, +1.10%BRK.A, +0.95% chief Warren Buffett, whose pile increased 9% between 2013 and 2014 to $58.2 billion. He’s at the top, followed by Bloomberg LP founder Michael Bloomberg, worth $33 billion — a 22% gain on the previous year. Carl Icahn is third with a tally of $24.5 billion, up 23%.
Hammering its point home a year ago, Oxfam told us that the wealth of the 85 richest people around the world was equal to the assets held by half the world’s population. That report was released ahead of the 2014 edition of the World Economic Forum in Davos.
In 2010, it took 388 billionaires to equal the wealth of the bottom half of the world’s population. Last year, that figure was down to just 80, said Oxfam. In other words, 3.5 billion people together owned the same amount as 80 wealthy people. Here’s the chart that lays that out:
Blame QE? Blogger Notayesmanseconomics took a look at how much expansionary monetary policy, such as quantitative easing, has raised inequality. The European Central Bank is widely expected to announce plans to buy sovereign debt later this week. The blogger notes that in July 2012, the Bank of England itself said QE had led to a demand for assets such as corporate bonds and equities.
“Who owns the most equities? The richest and the wealthiest of course, so we see something of a QED for QE,” said the blogger.
He also points to problems with Oxfam’s methodology, citing commentary by Felix Salmon. The former Reuters columnist took issue with how it aggregated wealth among the poor.
“Some poor people have modest savings; some poor people are deeply in debt; some poor people have nothing at all. (Also, some rich people are deeply in debt, which helps to throw off the statistics.) By lumping them all together and aggregating all those positive and negative ledger balances, you arrive at a number which is inevitably going to be low, but which is also largely meaningless,” Felix wrote.