An investigation by Oxfam into wealth inequality found that the gulf between rich and poor grew even wider in 2015.
Each year, the NGO publishes a report on the broad trends of global inequality. And the conclusion for 2015 was much the same as it has been for several years: wealth is increasingly concentrated in the hands of the richest 1%, who now hold more wealth than the rest of the world’s population put together.
According to the report, the 62 richest individuals in the world have accumulated more wealth than the poorest half of the global population combined, or 3.7 billion people. The concentration of wealth at the top has become increasingly pronounced in recent years.
Concentration of wealth
In 2010, 388 people possessed as much wealth as the bottom half of the world’s population put together. In 2011, it was 177 individuals, and in 2014, 80 individuals possessed as much as the poorest 50% combined.
“World leaders worry about the worsening inequality crisis, but they don’t take concrete measures to tackle it. The world has become much more unequal, and the trend is accelerating. We cannot continue to allow hundreds of millions of people to suffer from hunger, while the resources that could help them are accumulated by a handful people at the top,” said Manon Aubry, the senior advocacy officer for tax justice and inequalities at Oxfam France.
Nonetheless, 2015 saw a reduction in the number of people living in extreme poverty. The World Bank predicted in October last year that the number of people living in extreme poverty would fall below 10% of the global population in 2015, from 902 million in 2012 to 702 million.
This news was widely welcomed by the international community, and should put the world on course to eradicate extreme poverty by 2030, in line with the Sustainable Development Goals (SDGs).
>>Read: What are the SDGs about?
But if inequality had not grown within countries between 1990 and 2010, “an extra 200 million people would have escaped poverty”.
“That could have risen to 700 million had poor people benefited more than the rich from economic growth,” the report stated.
Unequal sharing of economic growth
Wealth has become increasingly concentrated at the top, because global economic growth has disproportionately benefited only a small proportion of the population.
The average annual income of the poorest 10% has risen by less than $3 per year over the last quarter of a century. This is far below the rate of inflation.
At the other end of the scale, the capital gains of the wealthy (interest, dividends etc.) have been consistently higher than the rate of economic growth, according to the report.
The NGO has come in for a certain amount of criticism for basing its study on assessments of net wealth; an indicator whose reliability has been questioned.
This indicator, used by Crédit Suisse, which provided the statistics behind the Oxfam report, takes into account the assets of each individual, minus their debts. If an individual’s debt is worth more than their wealth, they have negative net wealth. For the purposes of the study, these people are considered as being poorer than those who possess nothing at all.
But, according to Oxfam, this category, which critics say inflates the poverty statistics, represents only around 0.25% of the population.