The wealthy should care about Oxfam’s provocative poverty numbers

More money, more problems.
More money, more problems.
Image: Reuters/Philimon Bulawayo
We may earn a commission from links on this page.

Oxfam’s 2019 report on widening global wealth inequality makes for stark reading, which is one of the reasons its methodology has been attacked in the past. When we’re bombarded with unwelcome or uncomfortable information, it’s easier to take issue with the format than listen to the message.

The purpose of the report, which the global charity has been producing since 2016, is to highlight just how unequally wealth is distributed globally. It does so using two numbers: The total wealth of the world’s billionaires, as compiled by the Forbes annual Billionaires List; and the collective wealth of the world’s poorest people, taken from Credit Suisse’s Global Wealth Report, which the bank says is the most comprehensive estimation of country-by-country household wealth available.

In 2018, Oxfam notes, just 26 astoundingly rich individuals (led by Amazon founder Jeff Bezos) owned as much combined wealth as the poorest 50% of the entire global population. Since last year’s report, moreover, that bottom half has become 11.1% poorer. At the same time, more people became billionaires, and the richest billionaires became even richer.

Oxfam proposes that national governments worldwide impose a tax on their wealthiest citizens, using it to fund basic services for those in dire need. Getting the top 1% of the rich to pay 0.5% of their wealth in tax could, Oxfam says, pay for every child in the world now not in school to be educated, and save 3.3 million people from death through better healthcare this year alone.

The report has been criticized in the past because of the way it, or rather Credit Suisse, calculates wealth. The figure is arrived at by adding up a household’s assets—like savings and pensions, property, the contents of people’s homes—and subtracting debt. An American with a house worth $1 million, no other assets, and $1 million of debt would therefore be listed as having zero wealth, while a subsistence farmer with $10 in the bank but nothing else would be listed as having $10 of wealth.

Of course, this approach has flaws. It creates obvious outliers from any standardized description of extreme poverty, those households around the world with high incomes but a precarious amount of debt. It ignores mavericks who heavily indebt themselves in order to net large financial returns. It lumps Americans defaulting on their mortgage payments together with Ethiopians struggling to pay for school textbooks.

It doesn’t matter. Oxfam’s calculation is done to make a shocking point, and its point still stands, whether or not you nit-pick at this methodological compromise.

Any estimation of global wealth—especially, perhaps, the granular detail of the poorest—will have flaws due to the problems of information gathering, as the charity notes. Still, the wealth of the wealthiest is unutterably vast compared to the people who are struggling. Oxfam’s conclusion is that wealth should be redistributed through taxation, a measure that many would politically and personally oppose.

Oxfam’s report is provocative (though actually only shocking if you haven’t been paying attention.) The world’s poorest would rather that the wealthiest—particularly those gathering to discuss the globe’s most pressing problems at the World Economic Forum in Davos this weekbe provoked into action than into a discussion of semantics.