World-renowned charity Oxfam is sounding the alarm over widening inequality with a report claiming the richest 62 billionaires in the world have as much wealth as the poorest 3.6 billion.
The report’s findings suggest a stunning level of global inequality and a massive concentration of wealth.
“In a world where one in nine people go to bed hungry every night, we cannot afford to carry on giving the richest an ever bigger slice of the cake,” says Oxfam’s GB chief executive Mark Goldring.
Oxfam reached its dramatic conclusions using a methodology that yields some surprising results, such as recent Harvard graduates being classified as some of the poorest people on the planet. There are also more poor people in North America than there are in China, according to Oxfam.
The reason behind these counterintuitive findings is that Oxfam uses net wealth figures from financial services firm Credit Suisse, which adds up people’s assets and subtracting their debts.
In a press release, Director General at the Institute of Economic Affairs (IEA), Mark Littlewood, said:
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. 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 organisation.
Oxfam’s methods generate frightening sounding statistics almost by construction. But they are also unsurprising from a demographic perspective; the median age of the adult global population is in the mid-30s, so most will not have built up their assets.
Head of Research at the Adam Smith Institute (ASI), Ben Southwood, was equally skeptical of the report’s value. “Oxfam is once again misleading everyone with its punchy wealth inequality stats.”
“By Oxfam’s measures, the poorest people in the world are recent Harvard graduates with student debt piles. The bottom two billion don’t have zero wealth, but rather about $500bn of negative wealth. The poorest person in the world is richer than the next 30 percent put together. Having negative wealth may actually be a sign of prosperity since only people with prospects can secure loans.”
Not only is Oxfam’s report highly misrepresentative but Southwood argues the most relevant measures of inequality show a totally different picture.
“Global inequality of life expectancy and height are narrowing too—showing better nutrition and better health care where it matters most. What we should care about is the welfare of the poor, not the wealth of the rich.”
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