Economy / Finance, Globalization, Inequality and Social Justice

Richest 26 People Own As Much As Capital 3.8 Billion Poorest Combined, New Report Says

Jan 21 2019

By David Brennan – Newsweek  

Global wealth inequality is continuing to reward a handful of billionaires at the expense of the world’s poorest people, a new report has warned

On its “Public Good or Private Wealth” report, development charity Oxfam noted that the 26 richest billionaires on Earth now own as much wealth as the poorest 3.8 billion humans combined—half the global population.

Oxfam released its annual wealth analysis to mark the start of the World Economic Forum in Davos, Switzerland—the yearly event bringing together top business leaders, politicians and economists.

Last year was a profitable one for the world’s 2,200 billionaires, who increased their wealth by 12 percent in 2018. This totaled $900 billion, meaning their fortunes swelled by around $2.5 billion per day. By contrast, the world’s poorest 50 percent saw their total wealth decrease by 11 percent.

These trends left just 26 people owning as much as the poorest 3.8 billion. And the gulf is widening with speed—in 2017, 43 billionaires owned the same as the world’s poorest half, while in 2016 it was 61 billionaires.

The report also found that between 2017 and 2018 a new billionaire was created every two days. The decade since the financial crisis has been a success story for the world’s richest, and in the 10 years since the financial crisis the total number of billionaires has doubled.

Oxfam singled out Jeff Bezos, the world’s richest man and owner of Amazon, as an example of the staggering wealth enjoyed by the most elite billionaires. Now worth around $112 billion, just 1 percent of Bezos’s fortune is equivalent to the health budget of Ethiopia, a country of 105 million people.

Matthew Spencer, Oxfam’s director of campaigns and policy, told the The Guardian: “The massive fall in the number of people living in extreme poverty is one of the greatest achievements of the past quarter of a century but rising inequality is jeopardizing further progress.”

The report warned that “chronic underfunding” in public services by national governments was exacerbating the widening gap. Lack of access to good health care and education, for example, were two of the most pressing concerns. Oxfam said around 10,000 people die each year due to lack of healthcare, while around 262 million children are not in school because their parents cannot afford the related fees, uniforms or equipment.

Winnie Byanyima, Oxfam’s executive Director, said: “The size of your bank account should not dictate how many years your children spend in school, or how long you live—yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care.”

Oxfam suggested governments should introduce a wealth tax and more stringent restrictions on offshore banking to help fund better public services. The charity claimed that a 0.5 percent tax on the richest 1 percent of people would cover the cost of educating the 262 million children out of school and fund healthcare saving the lives of 3.3 million people.

“It doesn’t have to be this way—there is enough wealth in the world to provide everyone with a fair chance in life,” Spencer added. “Governments should act to ensure that taxes raised from wealth and businesses paying their fair share are used to fund free, good-quality public services that can save and transform people’s lives.” 1/21/19

——

Related:

The Rich Get Richer: 2017 Was Best Year for Billionaires in Recorded History With U.S. Leading the Way  (David Brennan – Newsweek)

Billionaires around the world enjoyed their most profitable period in recorded history, increasing their wealth by around 20 percent in 2017 as the gap between the super-rich and the rest of humanity continued to widen.

The world’s richest people added $1.4 trillion to their fortunes last year, according to a new report published by Swiss bank UBS and cited by The Guardian. This represents a faster rate of growth than ever before, including the infamous uber-capitalist Gilded Age in the U.S, which produced hugely influential and wealthy family dynasties.

According to the UBS Billionaires 2018 report, a new group of super-elites is emerging. It said the Gilded Age “bred generations of families in the U.S. and Europe who went on to influence business, banking, politics, philanthropy and the arts for more than 100 years. With wealth set to pass from entrepreneurs to their heirs in the coming years, the 21st century multi-generational families are being created.”

The U.S. remains home to the highest number of billionaires, at 585, Business Insider noted. China, though behind at 373, is rapidly closing the gap. Twelve years ago, there were only 16 Chinese billionaires, but now they represent almost 20 percent of the global total. As the report suggested, the “Chinese Century” is progressing well.

There were 2,158 billionaires worldwide last year, UBS said. Of those, 179 were new members of the club, more than 40 of whom inherited their wealth—a situation expected to become more common over the next 20 years due to the number of billionaires over the age of 70.

This trend marks a “major wealth transition,” the report suggested, noting that over the past five years, “the sum passed by deceased billionaires to beneficiaries has grown by an average of 17 percent each year, to reach $117B in 2017.”

The new generation of billionaires, UBS said, “seem highly motivated, committed to their chosen careers, the family business and/or doing social good.” Born in the information age, they “are more willing to take risks” and “have more information and can be more courageous about trying new ideas and being entrepreneurial.”

It might be party time for the super-rich, but in an era of growing inequality this news will do little to comfort the rest of the world. The globe’s richest 1 percent now own around half of the world’s entire wealth, their share having risen from 42.5 percent in 2008, according to a 2017 Credit Suisse report cited by The Guardian.

Humanity’s 3.5 billion poorest citizens, making up some 70 percent of the world’s working population, account for only 2.7 percent of global wealth.

The revelations of the Panama and Paradise Papers, leaked in 2015 and 2017 respectively, shed some light on how the globe’s richest people squirrel away their wealth. Rather than reinvesting and creating jobs as proponents of the widely discredited trickle-down economic theory argue, the super-rich often take money out of national economies and hoard it offshore using tax avoidance loopholes.

The UBS report did contain some good news. Some of the vast fortunes of global billionaires will be given away to charity thanks to the Giving Pledge—a plan launched by Bill Gates and Warren Buffett, the world’s second and third richest people. More than 180 people have so far signed up to give up at least half their wealth.

 

site admin