So far it's a grand decade for billionaires, says new report. As for the masses ...
"Billionaires, for many of them, times have never been better."
That's a quote from Rebecca Riddell, the policy lead for economic and racial justice at Oxfam America.
"If you'd put their money in a room in 2020, and then you came back at the end of 2023, you would have found that the wealth has grown enormously," says Riddell. "Three times the rate of inflation."
The success of billionaires is one of the key points in a new report from global charity Oxfam International titled "Inequality Inc." It's an annual publication issued to coincide with the meeting of the World Economic Forum in Davos, Switzerland, which begins on Monday, Jan. 15. Each year since 1971, government and business leaders have come to the Swiss mountain resort town to mull over the world's problems and possibilities.
As you might expect, the Oxfam findings have their skeptics.
This latest edition of the Oxfam report looks back over the last few years since 2020 and describes the growing unequal distribution of wealth as "the beginnings of a decade of division."
Oxfam spells out just how well billionaires are faring: "The world's five richest men have more than doubled their fortunes from $405 billion to $869 billion since 2020 —at a rate of $14 million per hour— while nearly five billion people have been made poorer."
(In case you're wondering, the top five are Bernard Arnault and his family, Jeff Bezos, Warren Buffet, Larry Ellison and Elon Musk.)
"You might think there would be little that could surprise us," says Oxfam's Riddell. Indeed, their report in 2022 made a very similar point. As NPR's headline observed: "Oxfam says the rich got richer in the pandemic, and the wealth gap is killing the poor."
But there's something different this time around, says Riddell. "The astronomical nature of gains at the very top since 2020 — during a time when so many suffered — really stood out."
Meanwhile, the report notes that for many "ordinary people" around the world, this decade has so far been tough going.
"It opened with a pandemic that devastated lives and economies," says Riddell. "Add to that the challenges of a really prolonged cost-of-living crisis, climate breakdown and war. Progress against poverty has nearly stalled."
According to Oxfam's report, since 2020, almost five billion people have lost economic ground — that is, they've grown poorer.
What's happening to the ultra-rich
The gulf between extreme wealth and extreme poverty has always been wide, says Riddell, yet in Oxfam's view, in this decade, "the ultra-ultra-rich are pulling away from everyone else."
Much of this wealth is concentrated in the Global North — in the U.S., Europe, Australia and parts of Asia. And Riddell says that mega-corporations there generate inequality by funneling profits upward to the ultra-rich.
"By squeezing workers, by dodging taxes, they're doing so at the expense of ordinary people," she argues.
"No corporation or individual should have this much power over our economies and our lives — to be clear, nobody should have a billion dollars," says Amitabh Behar, Oxfam International's interim executive director.
Critics of the Oxfam thesis
No one disputes that the rich are getting richer, but some say Oxfam's poverty analysis is a bit misleading.
"I'm not such a fan of the five-billion-people-are-worse-off number," says Charles Kenny, a senior fellow with the Center for Global Development think tank.
He says Oxfam arrived at their number of nearly 5 billion by computing people's wealth. It's a calculation based on taking the value of everything someone owns and subtracting all their debts. But Kenny says there are well-off people in richer countries who may have borrowed money to go to law school, say, or buy a home. When calculating their wealth with all that debt, they may seem poorer by Oxfam's measure.
"But they're not worse off in terms of their life outcomes," explains Kenny. "They're not worse off in terms of how much they can afford to eat or are they getting decent health care? They've just borrowed more."
Oxfam pushes back, saying these moneyed individuals with debt represent a small fraction of the 5 billion who are worse off. Most "ordinary people," they say, are really struggling to get by.
But Kenny says if you consider the last two or three decades, many of the poorest people in the world are actually better off.
"If you look at health," he says, "worldwide life expectancy continues to go up. If you look at education, the number of people in school continues to go up. So if you look at all these measures of the quality of life, they paint a slightly more positive picture. Even though at the very top end, we have extreme concentrations of wealth."
And what about those at the bottom of the economic ladder? "For the poorest people," the report says, "who are more likely to be women, racialized peoples, and marginalized groups in every society, daily life has become more brutal."
Kenny doesn't dispute that poverty remains a significant global problem: a total of 700 million people meet the World Bank definition of extreme poverty as someone who gets by on less than $2.15 per day.
So how do you solve inequality?
So what's to be done about the unequal distribution of resources?
The Oxfam report offers a few ideas, like creating businesses based on fair trade and worker cooperatives instead of being structured around benefiting shareholders.
Second, it says governments need to step up and better regulate business. "A more equal world is possible if governments shape the market to be fair," says Riddell.
"We need to rein in corporate power directly and that includes breaking up monopolies, empowering workers, calling for a living wage, [and increasing] taxation on corporations and on the ultra-rich."
Some argue that this approach doesn't always work. "If you're going to have tax policy that will redistribute income in favor of the poor, especially in favor of the global poor, you're going to find it very difficult," says John Mukum Mbaku, an economist at Weber State University who's originally from Cameroon.
The reason for that difficulty, explains Mbaku, is that the wealthy tend to be politically engaged and use campaign contributions to influence policy-making. Instead, he argues that governments should invest in improved public services to propel people out of poverty.
He says that improving access to free or low-cost education and medical care, nutritious food, clean water and basic sanitation can put someone on the road to employment and economic self-sufficiency.
Considering education more closely, Mbaku says large numbers of children in Africa, many of them girls, are unable to go to school. "In many African countries," he says, "because of traditions and cultures, girls are not favored when it comes to education and training. Boys are favored."
He's seen firsthand that there are either no schools available or "their parents are so poor that they cannot afford to provide even the textbooks even if the schools are free."
"Education should be considered by governments as an investment in human capital development, the future of your people, [and] the future of your country," he notes.
It's an intervention the Oxfam report recommends as well, saying that investing in people and communities provides "the best bulwark against extreme corporate power."
"We must stop normalizing extreme inequality," summarizes Abby Maxman, President and CEO of Oxfam America. "This is not by accident, but by design."
Altering that design is a challenge so large that the 1,600 business leaders and 60 heads of state gathered in Davos may need more than five days to surmount it.
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