Updated | Just 62 individuals together hold the same amount of wealth as the world's poorest 3.5 billion people combines, according to a new report from Oxfam.
With $1.76 trillion, 62 people held more wealth than half the world’s population combined in 2015; that number was 388 people in 2010. The concentration of wealth among those 62 individuals—smaller than the number of people who can fit on a double decker bus—increased by 44 percent between 2010 and 2015 and is roughly equivalent to the GDP of Canada. With a privileged few benefiting from a tightened concentration of wealth and an estimated $7.6 trillion hidden in offshore tax havens, global economic inequality is “reaching new extremes,” according to the report.
“The economy after the financial crisis and the recession is beginning to going to grow again and everyone takes that to be a positive, but what we’re seeing is that this growth, the increased income and wealth, is being captured by the richest,” Gawain Kripke, policy director for Oxfam, a U.K.-based nonprofit, tells Newsweek. “Working-class people and the poor are not benefiting from the growth, so something is deeply wrong with the economy and the social contract in which if you work hard and play by the rules [you'll be rewarded]. It’s broken.”
The staggering statistic comes ahead of the annual World Economic Forum in Davos, which will see business tycoons, politicians and celebrities convene in the Swiss mountain resort to hold discussions on the potential impact of robots and artificial intelligence—this year’s theme—alongside panels and talks on volatile world markets.
“Davos is the annual dance for the captains of capitalism, and it’s an appropriate time to ask them and ask the world to reflect on this rapidly growing concentration of wealth at the very tippy-top of the global economic pyramid,” says Kripke.
The majority of the world’s 62 richest people (53) are men, while women make up the majority of the world’s low-paid workers in the most “precarious” forms of employment, says Oxfam. The gender pay gap between men and women is also higher in more unequal societies.
Tim Worstall, a senior fellow at the London-based Adam Smith Institute, which is named after the 18th-century Scottish free market economist, says that while the headline number is true, it’s “just not very interesting or important because that’s just how wealth distribution works.”
To amend the wealth gap, the world’s leaders should pay workers a living wage and promote women’s rights and equality, says Oxfam. The organization says it also wants to see leaders agree on "a global approach to end the era of tax havens.”
Ahead of last year’s Davos conference, Oxfam warned that the combined wealth of the world’s richest one percent would overtake that of the rest of the 99 percent by 2016 if rising income inequality remained unchecked. That scenario is now reality, according to Oxfam. Many of the world’s richest people possess more wealth than a number of countries: Microsoft founder Bill Gates has an estimated net worth of $79.2 billion, more than the GDPs of Belarus and Sri Lanka, while telecom tycoon Carlos Slim worth is more than the GDP of Lebanon and Uruguay, with a $77.1 billion fortune.
The widening gap between workers and those at the top is one of the main reasons for the increasing global wealth gap as the “economic system...is rigged to work in the interests of the powerful,” says Oxfam. Since 2009, salaries for CEOs at a number of U.S. firms have increased by 54.3 percent while ordinary wages have plateaued, according to the report. CEOs earn more than 10 times the amount they did 30 years ago, according to a report released last June from the Economic Policy Institute.
Between 1990 and 2010, the number of people living in extreme poverty was halved, according to the United Nations, although more than 830 million people still live in extreme poverty worldwide. While Oxfam calls the drop in extreme poverty “fantastic progress,” it points out that those countries still experienced growth in economic inequality during that period.
Worstall credits to globalization for the halving of extreme poverty. “I’ll put up with increasing inequality,” says Worstall, “in return for less absolute poverty.”
Last year the World Bank redefined the meaning of “extreme poverty,” increasing the benchmark from living on $1.25 a day to $1.90.
This article has been updated to include additional information from Tim Worstall.