Sunday, December 10, 2017
Business

Just a few own world's wealth

The statement

"The richest 80 people in the world own more wealth than the bottom half of the global population."

Sen. Bernie Sanders, presidential candidate, Feb. 7 in a video

The ruling

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.

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.

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."

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.

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

Edited for print. Read the full version at PolitiFact.com.

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