It’s that time of the year: as the world’s richest meet in Davos, Oxfam releases a report highlighting global inequality, sparking a fierce debate. But this year’s report is different…
What is this report all about?
Every January, the charity Oxfam publishes a report on inequality. It gives a snapshot of wealth and income gaps around the world, and suggests ways to shrink them. Its findings always make headlines. The report is timed to coincide with the World Economic Forum, a conference in the Swiss town of Davos where the global elite meet to discuss the world’s biggest problems.
What are the headline figures this year?
There are a few. A new billionaire was created every two days last year; there are now 2,043 of them. Their total wealth shot up by $762bn — enough to eradicate extreme poverty in the world seven times over, according to Oxfam. Overall, 82% of the wealth created in 2017 went to the world’s richest 1%. Meanwhile, more than half the world lives on less than $10 per day.
Yikes. Is that as extreme as last year?
Here’s the thing: Oxfam’s previous reports were very different. They focused on comparing the overall wealth of the richest and poorest — last year, the big number was that eight people held as much wealth as the poorest 50% of the world population. This approach caught the public’s attention, but it was criticised for being misleading.
This year, the report is far more detailed, and it emphasises the increase in people’s incomes and wealth. It also includes research that shows that women, minorities and LGBTI people find it harder to earn well.
So is the world becoming more unequal?
Depends how you measure it. In terms of wealth, yes it is, as the figures above suggest. Wealth has a way of growing itself: the rich got so much richer in 2017 largely because the stock market did well, benefiting those who could afford to invest in it.
Income-wise, global inequality is actually decreasing. This is thanks to growth — and thus higher salaries — in large developing countries like China and India. Within most countries, however, inequality is growing in every way. This is significant, as people tend to compare themselves with their fellow citizens, not humans in general.
Gosh, that’s complicated.
Sure is. Here’s an example of how tricky these things are to measure. This year’s report counted an extra $8 trillion of wealth that it had missed in previous years. As a result, the figure for the average wealth of the world’s poorest 50% quadrupled. This means that last year’s headline fact about eight people owning as much as the poorest half was wrong.
If the figures are so hard to get right, what is the report for?
Its overall message — that the gap between rich and poor is growing in most respects — is undeniably true. Public opinion reflects this: three in four people surveyed by Oxfam said they want less inequality in their country. The charity suggests ways to achieve this.
Basically, imposing limits on the global capitalist system. Using language that would please Jeremy Corbyn, the report calls for “a human economy that works for all”. It criticises politicians like Donald Trump for promising to act, then failing to do so. It makes specific recommendations, including:
Does everyone agree?
No. Oxfam’s report has been mocked by the right-wing press, which accuses the charity of downplaying good news, like falling poverty and global income inequality. Critics argue that these trends happen because of, not despite, capitalism, and that inequality is fine if the world is getting richer overall.
- Do you care how rich others are as long as you are well off?
- Take Oxfam’s quiz in Become An Expert. Then, in groups, create your own quiz on inequality for others in your school. You can draw on the information in this article and the Become An Expert links.
- World Economic Forum
- This year’s attendees include Donald Trump, musician will.i.am and the king of Spain.
- Total wealth
- The report estimates a third is inherited.
- The measure of wealth, as used by Oxfam, is simply assets minus debts. But it does not always reflect what we mean by “rich” and “poor”. For instance, a Chinese peasant who owns very little but has no debts is considered wealthier than a British graduate with a student loan to pay off.
- Lesbian, gay, bisexual, transgender and intersex.
- Oxfam’s data on all but the richest people comes from financial services firm Credit Suisse.
- Oxfam admits that, according to its new data, the fact would actually have been “61 people are as rich as the poorest 50%”. This year, it is 42.
- Jeremy Corbyn
- The slogan of Corbyn’s Labour Party is “For the many, not the few”.
- Donald Trump
- The report quotes Trump as saying, “We need to reform our economic system so that, once again, we can all succeed together.” It points out that he has appointed mega-wealthy people to his cabinet and introduced tax reforms which favour the very rich.