Author: Deborah Hardoon, Senior Researcher, Oxfam

Link to paperhttp://policy-practice.oxfam.org.uk/publications/wealth-having-it-all-and-wanting-more-338125

OXFAM RESEARCH: Methodology and data sources January 2015

There were two main external data sources used for this analysis:

1 Credit Suisse Global Wealth Databook 2014https://www.credit-suisse.com/uk/en/news-and-expertise/research/credit-suisse-research-

institute/publications.html

Data was extracted from the 2014 report and a STATA file which included revised

calculations for global wealth and wealth shares dating back to 2000.

2 Forbes billionaires 2002–2014http://www.forbes.com/billionaires/

Data was extracted from the Forbes billionaires list as of March each year, from

2002 to 2014.

• By 2016, the top 1% of people in the world will have more wealth than the bottom

99%.

• 80 people now have the same wealth as the bottom half of the world’s population,

down from 388 in 2010.

• 20% of the Forbes billionaires are listed as having interests or activities relating to

the financial and insurance sectors.

• Billionaires with interests and activities in the pharmaceutical sector saw the

largest percentage increase in their wealth 2013–2014

• During 2013, companies from the financial and insurance sectors spent $550m on

lobbying policy makers in Washington and Brussels alone.

• The most prolific lobbying activities in the US are on budget and tax issues

BY 2016 THE TOP 1% WILL HAVE MORE WEALTH

THAN THE REST OF THE WORLD COMBINED

The concept: We know that the top 1% have a huge amount of wealth, but is this

amount increasing, and what does this suggest for the future?

Data sources: Credit Suisse Global Wealth Databook (2000–2014)

40424446485052545658

% S

ha

re g

lob

al w

ea

lth

Share of global wealth of the top 1% and bottom 99% respectively

Bottom 99%

Top 1%

BY 2016 THE TOP 1% WILL HAVE MORE WEALTH

THAN THE REST OF US COMBINED

The results:

40

42

44

46

48

50

52

54

56

58

% S

ha

re g

lob

al w

ea

lth

Share of global wealth of the top 1% and bottom 99% respectively; dashed line projects the 2010–2014 trend

Top 1%

Bottom 99%

BY 2016 THE TOP 1% WILL HAVE MORE WEALTH

THAN THE REST OF THE WORLD COMBINED

What does this tell us?

• The last few years have set us on a worrying trend.

• Since the end of the financial crisis, many people have struggled to regain

jobs and to manage under austerity packages. In contrast, the richest appear

to be increasing their wealth during this period, capitalizing on the increase in

asset values that only they have access to.

• There is an urgent need to halt and reverse this trend. There are already

extremely high levels of wealth inequality; let’s not let it get any worse.

BY 2016 THE TOP 1% WILL HAVE MORE WEALTH

THAN THE REST OF US COMBINED

The critique: ‘Why extrapolate only from 2010? Wealth inequality was higher in 2000.’

• The wealth share of the 1% has been extremely high for the last decade: worryingly

high levels in their own right.

• 2008/2009 marks a clear inflection point, following a real economic shock to the global

economy. After this point, we can identify a clear upward tick; our projection warns what

will happen in the next few years, if the trend continues.

40424446485052545658

% S

ha

re g

lob

al w

ea

lth

Share of global wealth of the top 1% and bottom 99% respectively

Bottom 99%

Top 1%

80 PEOPLE NOW HAVE THE SAME WEALTH AS

THE BOTTOM 50%

The concept: In 2014 in Davos, Oxfam’s paper ‘Working for the Few’ and

the famous 85 stat went viral. Now let’s look at extreme wealth inequality

over time ...

Data sources:

• Credit Suisse Global Wealth Databook (2000–2014)

• Forbes list of billionaires (2000–2014)

Calculation:

1

(%)

2

(%)

3

(%)

4

(%)

5

(%)

Bottom

50%

Total global

wealth

Wealth of

bottom

50%

2014 -0.3 0.1 0.1 0.3 0.5 0.7% $263 tr $1.8 tr

80 PEOPLE NOW HAVE THE SAME WEALTH AS

THE BOTTOM 50%

Calculations:

0

500

1000

1500

2000

2500

3000

To

tal w

ea

lth

$b

n (

Cu

rre

nt

FX

, M

on

ey

of

the

Da

y)

Wealth of the 80 richest people has doubled in nominal terms 2009-2014, while the wealth of the bottom 50% is lower in 2014 than it was in 2009

Wealth of bottom 50% ($bn)

Wealth of richest 80 people (From Forbes, $bn)

80 PEOPLE NOW HAVE THE SAME WEALTH AS

THE BOTTOM 50%

The results:

388

177159

9280

0

50

100

150

200

250

300

350

400

450

2010 2011 2012 2013 2014

Nu

mb

er

of

billio

na

ire

s

# Billionaires who have the same amount of wealth as the poorest half of world's population

80 PEOPLE NOW HAVE THE SAME WEALTH AS

THE BOTTOM 50%

What does this tell us?

• A completely absurd distribution of the world’s wealth; inefficient and unjust

• A minority of people have more wealth than they could possibly know what

to do with, and it keeps growing

• Half of the population have negative, zero or small financial and non-

financial assets. This leaves them vulnerable to shocks; unable to own

property or assets that can support their livelihoods

80 PEOPLE NOW HAVE THE SAME WEALTH AS

THE BOTTOM 50%

The critique: ‘7% of the poorest 10% of people on the planet live in the US’

Regional composition of global wealth distribution 2014

Source: Credit Suisse, Global Wealth Databook 2014, https://publications.credit-

suisse.com/tasks/render/file/?fileID=5521F296-D460-2B88-081889DB12817E02

SS

80 PEOPLE NOW HAVE THE SAME WEALTH AS

THE BOTTOM 50%

The critique: ‘The bottom 10% have negative wealth; people with negative

wealth are not necessarily the poorest.’

• This is an analysis of net wealth: complex and hard to measure, but for

which we have the most reliable data from a credible source. Negative

wealth is an important part of the wealth picture.

• We compare the very top of the distribution with the bottom 50%; 3.5

billion people, 90% of whom live in developing countries.

• The negative wealth of the bottom 10% is a quarter of 1% of global wealth.

The top 10% have 87% of global wealth; the gross disparity of wealth

distribution is clear.

1

(%)

2

(%)

3

(%)

4

(%)

5

(%)

Bottom

50%

Total global

Wealth

Wealth of

bottom

50%

2014 -0.3 0.1 0.1 0.3 0.5 0.7% $263 tr $1.8 tr

20% OF BILLIONAIRES HAVE INTRESTS AND/OR

ACTIVITIES IN THE FINACE/INSURANCE SECTOR

The concept: Wealth comes from somewhere, we want to unpack where the

wealthiest have made their money.

Data: Forbes billionaires 2013 and 2014

Calculations:

Billionaires

Wealth

2013

($mil)

Wealth

2014 ($mil)

Sector code

(Oxfam

coding)

Origin of wealth

(Forbes) Country

Bill Gates 67000 76000 Tech Microsoft United States

Carlos Slim Helu & family 73000 72000 Telecoms telecom Mexico

Amancio Ortega 57000 64000 Retail Zara Spain

Warren Buffett 53500 58200 Finance Berkshire Hathaway United States

Larry Ellison 43000 48000 Tech Oracle United States

Charles Koch 34000 40000 Diversified diversified United States

David Koch 34000 40000 Diversified diversified United States

Sheldon Adelson 26500 38000 Entertainment casinos United States

Christy Walton & family 28200 36700 Retail Wal-Mart United States

Jim Walton 26700 34700 Retail Wal-Mart United States

20% OF BILLIONAIRES HAVE INTRESTS AND/OR

ACTIVITIES IN THE FINACE/INSURANCE SECTOR

Results:

Sector

Count of

billionaires in

2013 and 2014

Sum of wealth

2013 ($m)

Sum of wealth

2014 ($m)

Increase in

wealth ($m)

Increase in

wealth %

Grand total 1761 5432610 6447190 1014580 19%

Finance 326 998200 1147500 149300 15%

Real estate 160 391650 413050 21400 5%

Retail 155 657100 787050 129950 20%

Tech 131 446000 627440 181440 41%

Extractives 118 453100 437150 -15950 -4%

Product 110 225500 327400 101900 45%

Pharma 95 170050 249950 79900 47%

Diversified 95 377650 395050 17400 5%

Entertainment 67 170900 248300 77400 45%

20% OF BILLIONAIRES HAVE INTRESTS AND/OR

ACTIVITIES IN THE FINANCE/INSURANCE SECTOR

Results:

BillionaireWealth in 2013 $bn

Wealth in 2014 $bn

Increase in wealth

Source of wealth Nationality Gender

Warren Buffett 53.5 58.2 9%Berkshire Hathaway United States M

Michael Bloomberg 27.0 33.0 22% Bloomberg LP United States M

Carl Icahn 20.0 24.5 23%Leveraged buyouts United States M

Prince AlwaleedBin Talal Alsaud 20.0 20.4 2% Investments Saudi Arabia M

George Soros 19.2 23.0 20% Hedge funds United States M

Joseph Safra 15.9 16.0 1% Banking Brazil M

Luis Carlos Sarmiento 13.9 14.2 2% Banking Colombia M

Mikhail Prokhorov 13.0 10.9 -16% Investments Russia M

AlexeyMordashov 12.8 10.5 -18%

Steel, investments Russia M

Abigail Johnson 12.7 17.3 36%Money management United States F

BILLIONAIRES WITH INTRESTS/ACTIVITIES IN THE

PHARMACEUTICAL/HEALTHCARE SECTOR SAW

THE LARGEST % INCREASE IN WEALTH 2013–2014Results:

BillionaireWealth in 2013 $bn

Wealth in 2014 $bn

Increase in wealth

Source of wealth Nationality Gender

Ernesto Bertarelli& family 11.0 12.0 9% Biotech,

investments Switzerland M

Dilip Shanghvi 9.4 12.8 36% Pharmaceuticals India M

Hansjoerg Wyss 8.7 10.5 21% Medical devices Switzerland M

Patrick Soon-Shiong 8.0 10.0 25% Pharmaceuticals United

States M

Ludwig Merckle 7.1 8.6 21% Pharmaceuticals Germany M

Stefano Pessina 6.4 10.4 63% Drugstores Italy M

Thomas Frist Jr& family 4.8 6.1 27% Healthcare United

States M

Gayle Cook 4.0 5.8 45% Medical devices United States F

Curt Engelhorn 4.0 4.0 0% Pharmaceuticals Germany M

Cyrus Poonawalla 3.9 4.9 26% Biotech/vaccines India M

20% OF BILLIONAIRES HAVE INTRESTS AND/OR

ACTIVITIES IN THE FINANCE/INSURANCE SECTOR

What does this tell us?

• The financial sector is highly lucrative to individuals with activities and

interests in this sector, a sector that is widely thought to have contributed to

the global economic crisis, which has cost many ordinary people their homes

and jobs.

• This raises the question of whether the accumulation of wealth by a few is

paid for elsewhere in the economy. Indeed research from the IMF finds that

the US subsidizes their ‘too big to fail’ banks to the tune of $83bn annually.

• Billionaires from the pharmaceutical sector have increased their wealth by

$80bn in a single year. Meanwhile drugs continue to be prohibitively

expensive for many in need. This is a clear indication that corporate profit and

extreme wealth accumulation are prioritized over access to healthcare and

medicines.

$550m WAS SPENT BY FINANCE/INSURANCE

SECTOR LOBBYISTS IN BRUSSELS AND

WASHINGTON IN 2013

The concept:

‘Working for the Few’ found evidence to suggest that wealth is also associated

with political influence. Lobbying is one of the mechanisms that individuals,

companies and other organizations use to influence policy makers directly.

Data sources:

• Washington: Centre for Responsive Politics (opensecrets.org)

• Brussels: Corporate Europe Observatory

Calculations:

$400m in Washington

$150m in Brussels

$550m WAS SPENT BY FINANCE/INSURANCE

SECTOR LOBBYISTS IN BRUSSELS AND

WASHINGTON IN 2013

Results:

Annual lobbying on finance/insurance/real estate

Source: https://www.opensecrets.org/lobby/indus.php?id=F&year=2014

$550m WAS SPENT BY FINANCE/INSURANCE

SECTOR LOBBYISTS IN BRUSSELS AND

WASHINGTON IN 2013

What does this tell us?

• This is just the tip of the iceberg. Lobbying can take place at all levels of

government in all countries. And this is just one channel that people and

companies in positions of power and wealth can use to exercise their

influence.

• For profit-oriented companies, one can only assume that there will be a

financial return from this investment that will accrue through policies

favourable to their interests. It seems to be working, if you associate this with

the accumulation of wealth at the top.

• Ordinary people do not have the same access to policy influencing.

THE MOST PROLIFIC LOBBYING ACTIVITIES IN

THE US ARE ON BUDGET AND TAX ISSUES

Results:

Number of lobbying cases filed against each issue in the US in 2013

Source: https://www.opensecrets.org/lobby/top.php?showYear=2013&indexType=u

Issue Number of clients

Federal budget and appropriations 3219

Tax 1951

Health issues 1898

Transportation 1371

Defence 1297

Energy and nuclear power 1238

THE MOST PROLIFIC LOBBYING ACTIVITIES IN

THE US ARE ON BUDGET AND TAX ISSUES

What does this tell us?

• Companies are lobbying on the issues that affect the public; issues directly

associated with how the government spends its money and how it raises its

taxes

• Spending money lobbying on tax suggests that these companies with a profit

incentive would hope to be able to reduce their tax burden, which means less

money available for public services or more taxes raised from elsewhere in

the economy.

• Voices and influence on these fundamentally public issues must be more

balanced.

© Oxfam International January 2015 www.oxfam.org