Hardoon Senior Researcher Oxfam Link to paper httppolicypracticeoxfamorgukpublicationswealthhavingitallandwantingmore338125 OXFAM RESEARCH Methodology and data sources January 2015 ID: 587611
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Slide1
Author: Deborah
Hardoon, Senior Researcher, OxfamLink to paperhttp://policy-practice.oxfam.org.uk/publications/wealth-having-it-all-and-wanting-more-338125
OXFAM RESEARCH: Methodology and data sources January 2015Slide2
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 2002–2014
http://www.forbes.com/billionaires/
Data was extracted from
the Forbes billionaires list as of March each year, from 2002 to 2014.Slide3
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 issuesSlide4
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)Slide5
BY 2016 THE TOP 1% WILL HAVE MORE WEALTH THAN THE REST OF US COMBINED
The results:Slide6
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.Slide7
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. Slide8
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
trSlide9
80 PEOPLE NOW HAVE THE SAME WEALTH AS THE BOTTOM 50%
Calculations:Slide10
80 PEOPLE NOW HAVE THE SAME WEALTH AS THE BOTTOM 50%
The results:Slide11
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 livelihoodsSlide12
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
SSSlide13
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$1.8 trSlide14
20% OF BILLIONAIRES HAVE INTRESTS AND/OR ACTIVITIES IN THE FINACE/INSURANCE SECTOR
The concept: Wealth comes from somewhere, we want to unpack where the wealthiest have made their money. Data: Forbes billionaires 2013 and 2014
Calculations:
Billionaires
Wealth 2013 ($mil)
Wealth 2014 ($mil)
Sector code (Oxfam coding)
Origin of wealth (Forbes)
Country
Bill Gates
67000
76000
Tech
Microsoft
United States
Carlos Slim Helu & family
73000
72000
Telecoms
telecom
Mexico
Amancio Ortega
57000
64000
Retail
Zara
Spain
Warren Buffett
53500
58200
Finance
Berkshire Hathaway
United States
Larry Ellison
43000
48000
Tech
Oracle
United States
Charles Koch
34000
40000
Diversified
diversified
United States
David Koch
34000
40000
Diversified
diversified
United States
Sheldon
Adelson
26500
38000
Entertainment
casinos
United States
Christy Walton & family
28200
36700
Retail
Wal-Mart
United States
Jim Walton
26700
34700
Retail
Wal-Mart
United StatesSlide15
20% OF BILLIONAIRES HAVE INTRESTS AND/OR ACTIVITIES IN THE FINACE/INSURANCE SECTOR
Results:
Sector
Count of
billionaires
in 2013 and 2014
Sum of
wealth
2013 ($
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%Slide16
20% OF BILLIONAIRES HAVE INTRESTS AND/OR ACTIVITIES IN THE FINANCE/INSURANCE SECTOR
Results:
Billionaire
Wealth 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
Alwaleed Bin Talal Alsaud20.020.42%InvestmentsSaudi ArabiaMGeorge Soros19.223.020%Hedge fundsUnited StatesMJoseph Safra15.916.01%BankingBrazilMLuis Carlos Sarmiento13.914.22%BankingColombiaMMikhail Prokhorov13.010.9-16%InvestmentsRussiaMAlexey Mordashov12.810.5-18%Steel, investmentsRussiaMAbigail Johnson12.717.336%Money managementUnited StatesFSlide17
BILLIONAIRES WITH INTRESTS/ACTIVITIES IN THE PHARMACEUTICAL/HEALTHCARE SECTOR SAW THE LARGEST % INCREASE IN WEALTH 2013–2014
Results:
Billionaire
Wealth 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
SwitzerlandMPatrick Soon-Shiong8.010.025%PharmaceuticalsUnited StatesMLudwig Merckle7.18.621%PharmaceuticalsGermanyMStefano Pessina6.410.463%DrugstoresItalyMThomas Frist Jr & family4.86.127%HealthcareUnited StatesMGayle Cook4.05.845%Medical devicesUnited StatesFCurt Engelhorn4.04.00%PharmaceuticalsGermanyMCyrus Poonawalla3.94.926%Biotech/vaccinesIndia
MSlide18
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.Slide19
$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 BrusselsSlide20
$
550m WAS SPENT BY FINANCE/INSURANCE SECTOR LOBBYISTS IN BRUSSELS AND WASHINGTON IN 2013Results:
Annual lobbying on finance/insurance/real estate
Source:
https://www.opensecrets.org/lobby/indus.php?id=F&year=2014Slide21
$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.Slide22
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
1238Slide23
THE MOST PROLIFIC LOBBYING ACTIVI
TIES IN THE US ARE ON BUDGET AND TAX ISSUESWhat 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