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Jon Greenberg
By Jon Greenberg February 17, 2016

Pretty much on the money: Sanders says world's 80 richest own more than the bottom half do

Vermont Sen. Bernie Sanders’ campaign against economic inequality went global in a video for the One Campaign, a global AIDS and poverty advocacy group,.

"The issue of wealth and income inequality is the great moral issue of our time," Sanders said. "It is the great economic issue of our time and the great political issue of our time. Truthfully, there is something profoundly wrong when the richest 80 people in the world own more wealth than the bottom half of the global population, 3.5 billion people."

That’s an astounding fact, if true, that 80 people own as much wealth as 3.5 billion. We decided to see if Sanders was right.

He largely is.

Sanders relied on a 2014 analysis from Oxfam, which came up with the comparison from two different reports.

The first, from Credit Suisse, estimated the distribution of household wealth worldwide. The second was Forbes’ list of billionaires.

We'll walk you through the calculations and a couple of caveats. 

The Credit Suisse report

Analysts hired by Credit Suisse estimated total personal wealth at $263 trillion. From there, analysts estimated that the bottom half of the world’s population (approximately 3.5 billion people) owned less than 1 percent of all wealth. To be precise, (and you can find this on page 110 of the full Credit Suisse databook) the bottom half of the world’s population own .72 percent of world household wealth, which comes out to about $1.7 trillion.

James Davies, one of the report’s lead authors and an economist at the University of Western Ontario, said no one else has done this exact study. That’s true, but the Allianz Group, another global financial corporation, and the Boston Consulting Group, a financial and management consulting firm, have estimates of total household financial wealth that are pretty close to what Credit Suisse reported.

Brent Beardsley, managing director at the Boston Consulting Group, told us both his firm and Credit Suisse used much of the same data, but Credit Suisse included more countries. Beardsley said that difference wouldn’t be significant.

Raul Santaeulalia-Llopis, an economist at Washington University in St. Louis, said the Credit Suisse may have underestimated wealth in low-income countries. But even if true, it wouldn’t throw off Sanders’ comparison much. Santaeulalia-Llopis said Sanders and Oxfam might need to add a few more billionaires to their tally to make it more accurate.

The strongest criticism of the Credit Suisse report is that it includes a significant number of people in wealthy countries who are not poor but have large debts. That produces misleading results, Beardsley said.

"(They) are not actually living in poverty but simply have very low or even negative net worth due to amassment of debt to finance housing, education and consumption beyond current income," Beardsley said. "In this case, wealth -- or rather net worth --  is not an adequate measure of what is commonly understood as poverty."

However, this doesn’t challenge the underlying numbers. Instead, it raises a question about interpreting them. Economist Branko Milanovic, formerly with the World Bank and now at City University of New York Graduate Center, countered in a blog post that sometimes, a negative net worth is a very big deal.

"Even for those people in the rich world who are ‘anomalously’ placed among the wealth-poor and who may lead nice lives despite owning nothing, a shock in the form of a medical emergency  -- unless there is public health care -- or loss of job may have catastrophic consequences," Milanovic wrote. "There is just no wealth to fall back on to tide you over the bad times."

Forbes billionaire estimates

The second half of the comparison is relatively straightforward.

Oxfam used Forbes' list of billionaires and counted how many people it would take to reach $1.7 trillion -- the figure representing the wealth of the bottom half of the global population.

Forbes' calculations aren't perfect, but they are the best estimate publicly available. Forbes tracks changes in real time, but the base comparisons depend on estimates generated by members of the Forbes team. Sometimes the billionaires themselves say the numbers are off because far from all the necessary information is public knowledge. Then there are fluctuations due to changing currency exchange rates and the ups and downs of the stock market.

The list can’t deliver pinpoint accuracy, but it does represent a good faith effort to assess the net worth of the world’s wealthiest people. Like the wealth calculations in the Credit Suisse report, it should be seen as a reasonable estimate.

One final note

The divide between the super rich and the bottom of the global population appears to be getting worse.

Credit Suisse, Forbes and Oxfam update their numbers at least every year and for 2015, Oxfam said just 62 billionaires own as much as half the world’s people combined.

The Sanders campaign, however, told us the video was shot before the latest Oxfam report. So we won't hold it against Sanders in our rating.

Our ruling

Sanders said that 80 people own as much as half the world’s population. The statement was in line with the latest Oxfam report available at the time Sanders spoke. The Oxfam analysis was based on a report from Credit Suisse and the Forbes list of billionaires.

The exact number of billionaires might well be different from the 80 that Sanders said, or the 62 that Oxfam said more recently.  But out of world population of 7 billion, it makes little difference if the tally were 160. It still represents a tiny sliver of a percentage of the people in the world.

The statement is accurate but needs additional information. We rate it Mostly True.

Our Sources

One Campaign, Senator Bernie Sanders Responds to ONE Vote '16, Feb. 7, 2016

Oxfam International, Richest 1% will own more than all the rest by 2016, Jan. 19, 2015

Credit Suisse, Global Wealth Databook 2014, October, 2014

Five Thirty Eight, Meet The 80 People Who Are As Rich As Half The World, Jan. 18, 2015

Oxfam, Have you heard the one about the 85 richest people?, Nov. 19, 2014

World Bank, Poverty overview, Oct. 7, 2015

Oxfam International, 62 people own the same as half the world, reveals Oxfam Davos report, Jan. 18, 2016

Credit Suisse, Global Wealth Databook 2015, October, 2015

Oxfam International, An economy for the 1% - Methodology, Jan. 18, 2016

BCG Perspectives, Global Wealth 2015: Winning the Growth Game, 2015

Reuters, Stop adding up the wealth of the poor, April 4, 2014

Forbes, The World's Billionaires, 2015

Branko Milanovic, Repeat after me: Wealth is not income and income is not consumption, Jan. 24, 2015

U.S. Census Bureau, International Data Base, 2015

World Bank, Low income country data, 2014

Handbook of Income Distribution, Wealth and Inheritance in the Long Run, 2015

The Atlantic, The $200 Trillion World: Who Owns All the Wealth?, Dec. 11, 2011

Allianz, Global wealth report 2014

Oxford Poverty and Human Development Initiative, Multidimensional Poverty Index 2013, March 2013

World Bank, The consumption, income, and wealth of the poorest: cross-sectional facts of rural and urban Sub-Saharan Africa for macroeconomists, June 25, 2015

World Bank, The ten richest Africans own as much as the poorest half of the continent, March 11, 2015

Email interview,Christoph Lakner, consultant, Development Research Group, World Bank, Jan. 27,  2016

Email interview,  Raul Santaeulalia-Llopis, assistant professor, Department of Economics, Washington University in St. Louis, Feb. 12, 2016

Email interview, Deborah Hardoon, deputy head of research, Oxfam Great Britain, Jan. 21, 2016

Email interview, James Davies, professor, Department of Economics, University of Western Ontario, Jan. 22, 2016

Email interview, Brent Beardsley, managing director, Boston Consulting Group, Feb. 5, 2016

Email interview, Warren Gunnels, spokesman, Sanders for President, Feb. 9, 2016

 

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Pretty much on the money: Sanders says world's 80 richest own more than the bottom half do

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