The Oxfam Report is Important, But There's More to the Story
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The Oxfam Report is Important, But There’s More to the Story

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The Oxfam Report is Important, But There's More to the Story

The Oxfam Report is Important, But There’s More to the Story

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Prior to the opening day of the World Economic Forum in Davos, Oxfam International made waves with its latest report on global inequality. In particular, one “shock value” finding made headlines: eight men now combine to have the same wealth as half of the world’s population, or 3.6 billion people.

Today’s chart breaks down who these men are and how much they own in terms of assets. But, it also serves as a springboard to dive into a few other thoughts on the Oxfam report, inequality, philanthropy, and eradicating poverty.

The Giving Pledge

When I saw the headline from the Oxfam report, one of my first thoughts was: how many of these billionaires have signed The Giving Pledge?

The Giving Pledge was launched in 2010 by Bill and Melinda Gates and Warren Buffett. It’s stated goal is to “help address society’s most pressing problems” by inviting “the world’s wealthiest individuals and families to commit to giving more than half of their wealth to philanthropy”. So far, it’s been signed by 139 individuals with commitments of $732 billion.

Of the eight people at the top of the wealth pyramid, the majority has signed The Giving Pledge including: Bill Gates (co-founder), Warren Buffett (co-founder), Mark Zuckerberg, Larry Ellison, and Michael Bloomberg.

Three of the eight billionaires haven’t signed the pledge. Jeff Bezos is included in that mix, and he has faced some criticism over the fact. The other two that have not signed yet are Spanish billionaire Amancio Ortega and Mexican business magnate Carlos Slim Helú.

At the end of the day, signing the Giving Pledge is not yet equivalent to “walking the walk” in helping to solve pressing problems like poverty or inequality. However, people like Gates and Buffett have already made a huge difference to charitable causes.

Here’s what Warren Buffett recently said about his fortune:

In my entire lifetime, everything that I’ve spent will be quite a bit less than 1 percent of everything I make. The other 99 percent plus will go to others because it has no utility to me. So it’s silly for me to not transfer that utility to people who can use it.

Buffett is one of the world’s best investors – and if he continues to invest his money wisely into philanthropy, the result will likely be something that even Oxfam can be proud of.

The Poor Are Actually Getting Richer

While the sensational fact that headlined the Oxfam report is certainly alarming and important, it also misses some noteworthy context.

People in many of the world’s poorest nations aren’t getting poorer – they are actually getting much richer. The number of people living in extreme poverty has been cut in half since 1990.

Here’s another way to show it – and perhaps this is where the emotional pain points arise:

Courtesy of: Harvard Business Review, h/t Ian Bremmer

The poorest and richest cohorts of the global population, along with the Asian middle class, all got much richer over the last two decades.

The American middle class, however, was not so lucky. Median income for 81% of U.S. counties actually peaked back in 1999, and other Western countries are facing similar inequality challenges.

One Last Chart

The final chart here is courtesy of Swedish author and historian Johan Norberg, who wrote a sarcastic response to the Oxfam report:

Oxfam and many others are rightly concerned about inequality. But, for the people that need it most, things continue to get better. Such a narrative is not sexy enough for a click-driven media that thrives on sensational or emotional soundbites.

For more information about the metrics that are continuing to improve, see this post by Peter Diamandis, or this one in Reason.

Here’s one final quote from Norberg worth considering:

Part of our problem is one of success. As we get richer, our tolerance for global poverty diminishes. So we get angrier about injustices. Charities quite rightly wish to raise funds, so they draw our attention to the plight of the world’s poorest. But since the Cold War ended, extreme poverty has decreased from 37 per cent to 9.6 per cent — in single digits for the first time in history.

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Charted: Income Distributions in 16 Different Countries

This graphic shows income distributions in 16 different countries around the world, using data from the World Inequality Database.

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charting income distributions in select countries

Charting Income Distributions in 16 Different Countries

Throughout the 19th century, roughly 80% of the global population lived in what we’d now consider extreme poverty.

And as earnings and living conditions have improved dramatically since then, they haven’t done so evenly across the world. There are still vast income gaps, both between different countries and within them.

To highlight these global income discrepancies, this chart by Ruben Berge Mathisen shows income distributions around the world, using 2021 income data from the World Inequality Database (WID) on a per adult basis.

Global Income Distributions

This graphic shows the adult income distributions of 16 different countries in U.S. dollars, along with the world average.

On a global scale, adults making an annual income greater than $124,720 make it into the 99th percentile, meaning they make more than 99% of the worldwide population.

However, things change when you zoom in on specific countries. Here’s a look at all the countries on the list, and how much annual income is needed (at minimum) to be in the top 1%:

RegionCountryAdult income (2021, 99th percentile)
North America🇺🇸 United States$336,953.19
North America🇨🇦 Canada$193,035.55
North America🇲🇽 Mexico$130,388.19
South America🇧🇷 Brazil$115,257.86
South America🇨🇴 Colombia$97,500.37
South America🇦🇷 Argentina$94,794.89
Asia🇨🇳 China$99,095.34
Asia🇮🇳 India$65,370.51
Asia🇮🇩 Indonesia$85,176.35
Europe🇷🇺 Russia$124,805.86
Europe🇩🇪 Germany$212,106.53
Europe🇬🇧 United Kingdom$162,547.56
Africa🇳🇬 Nigeria$53,144.36
Africa🇪🇹 Ethiopia$24,295.66
Africa🇪🇬 Egypt$115,546.44
Oceania🇦🇺 Australia$164,773.40
🌎 World$124,719.60

People in America’s top 1% make at least $336,953 in annual pre-tax income. That’s more than $100,000 above the 1% of next closest countries, Germany ($212,107) and Canada ($193,036).

On the flip side, adults in Ethiopia only need to make $24,297 to fall into the country’s 99th percentile. Ethiopia is one of the poorest nations in the world—according to estimates by the World Bank, about 27% of Ethiopia’s population is thought to be currently living under the poverty line.

Income Gaps Within Countries

It is also noticeable how much income varies within each country.

One example is Colombia, which has one of the largest wealth gaps of any country on the list. The 99th percentile in Colombia is making an annual income that’s 192x higher than its 10th percentile. In contrast, an income in the 99th percentile in the United States is 83x higher than the 10th percentile.

Colombia’s high level of income inequality stems from early childhood disadvantages, such as lack of access to education, which can limit opportunities later on in life.

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Ranked: The World’s 100 Biggest Pension Funds

The world’s 100 largest pension funds are worth over $17 trillion in total. Which ones are the biggest, and where are they located?

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A preview image of some of the largest pension funds in the world. The Government Pension Investment Fund in Japan is the biggest at $1.7 trillion in assets.

Ranked: The World’s 100 Biggest Pension Funds

View the high-resolution of the infographic by clicking here.

Despite economic uncertainty, pension funds saw relatively strong growth in 2021. The world’s 100 biggest pension funds are worth over $17 trillion in total, an increase of 8.5% over the previous year.

This graphic uses data from the Thinking Ahead Institute to rank the world’s biggest pension funds, and where they are located.

What is a Pension Fund?

A pension fund is a fund that is designed to provide retirement income. This ranking covers four different types:

  • Sovereign funds: Funds controlled directly by the state. This ranking only includes sovereign funds that are established by national authorities.
  • Public sector funds: Funds that cover public sector workers, such as government employees and teachers, in provincial or state sponsored plans.
  • Private independent funds: Funds controlled by private sector organizations that are authorized to manage pension plans from different employers.
  • Corporate funds: Funds that cover workers in company sponsored pension plans.

Among the largest funds, public sector funds are the most common.

The Largest Pension Funds, Ranked

Here are the top 100 pension funds, organized from largest to smallest.

RankFundMarketTotal Assets
1Government Pension Investment Fund🇯🇵 Japan$1.7T
2Government Pension Fund🇳🇴 Norway$1.4T
3National Pension🇰🇷 South Korea$798.0B
4Federal Retirement Thrift🇺🇸 U.S.$774.2B
5ABP🇳🇱 Netherlands$630.4B
6California Public Employees🇺🇸 U.S.$496.8B
7Canada Pension🇨🇦 Canada$426.7B
8National Social Security🇨🇳 China$406.8B
9Central Provident Fund🇸🇬 Singapore$375.0B
10PFZW🇳🇱 Netherlands$315.5B
11California State Teachers🇺🇸 U.S.$313.9B
12New York State Common🇺🇸 U.S.$267.8B
13New York City Retirement🇺🇸 U.S.$266.7B
14Local Government Officials🇯🇵 Japan$248.6B
15Employees Provident Fund🇲🇾 Malaysia$242.6B
16Florida State Board🇺🇸 U.S.$213.8B
17Texas Teachers🇺🇸 U.S.$196.7B
18Ontario Teachers🇨🇦 Canada$191.1B
19National Wealth Fund🇷🇺 Russia$180.7B
20AustralianSuper🇦🇺 Australia$169.1B
21Labor Pension Fund🇹🇼 Taiwan$168.9B
22Washington State Board🇺🇸 U.S.$161.5B
23Public Institute for Social Security🇰🇼 Kuwait$160.0B
24ATP🇩🇰 Denmark$155.4B
25Wisconsin Investment Board🇺🇸 U.S.$147.9B
26Future Fund🇦🇺 Australia$147.9B
27Boeing🇺🇸 U.S.$147.2B
28Employees' Provident🇮🇳 India$145.0B
29New York State Teachers🇺🇸 U.S.$144.4B
30North Carolina🇺🇸 U.S.$137.1B
31Alecta🇸🇪 Sweden$136.7B
32GEPF🇿🇦 South Africa$129.1B
33California University🇺🇸 U.S.$125.3B
34Bayerische Versorgungskammer🇩🇪 Germany$122.0B
35Ohio Public Employees🇺🇸 U.S.$121.6B
36AT&T🇺🇸 U.S.$119.5B
37Public Service Pension Plan🇨🇦 Canada$117.9B
38National Federation of Mutual Aid🇯🇵 Japan$117.1B
39Metaal/tech. Bedrijven🇳🇱 Netherlands$115.8B
40IBM🇺🇸 U.S.$115.4B
41Universities Superannuation🇬🇧 UK$111.2B
42Virginia Retirement🇺🇸 U.S.$110.0B
43Pension Fund Association🇯🇵 Japan$109.8B
44Raytheon Technologies🇺🇸 U.S.$108.9B
45Michigan Retirement🇺🇸 U.S.$108.0B
46Aware Super🇦🇺 Australia$107.5B
47New Jersey🇺🇸 U.S.$104.5B
48Minnesota State Board🇺🇸 U.S.$102.9B
49PFA Pension🇩🇰 Denmark$102.7B
50Kaiser🇺🇸 U.S.$101.0B
51Georgia Teachers🇺🇸 U.S.$100.9B
52Oregon Public Employees🇺🇸 U.S.$100.4B
53Massachusetts PRIM🇺🇸 U.S.$98.5B
54Qsuper🇦🇺 Australia$96.5B
55General Motors🇺🇸 U.S.$96.1B
56Ontario Municipal Employees🇨🇦 Canada$95.7B
57Ohio State Teachers🇺🇸 U.S.$95.1B
58AP Fonden 7🇸🇪 Sweden$94.4B
59Healthcare of Ontario🇨🇦 Canada$90.5B
60General Electric🇺🇸 U.S.$90.5B
61Employees' Pension Fund🇮🇳 India$89.5B
62Bouwnijverheid🇳🇱 Netherlands$88.5B
63UPS🇺🇸 U.S.$86.8B
64United Nations Joint Staff🇺🇸 U.S.$86.2B
65Lockheed Martin🇺🇸 U.S.$85.7B
66Quebec Pension🇨🇦 Canada$81.4B
67National Public Service🇯🇵 Japan$79.9B
68Tennessee Consolidated🇺🇸 U.S.$79.0B
69Royal Bank of Scotland Group🇬🇧 UK$78.3B
70Bank of America🇺🇸 U.S.$76.3B
71BT Group🇬🇧 UK$74.3B
72Keva🇫🇮 Finland$73.3B
73Ford🇺🇸 U.S.$72.8B
74PME🇳🇱 Netherlands$72.7B
75Los Angeles County Employees🇺🇸 U.S.$72.7B
76Quebec Government & Public🇨🇦 Canada$72.4B
77UniSuper🇦🇺 Australia$72.1B
78Northrop Grumman🇺🇸 U.S.$72.0B
79Pennsylvania School Employees🇺🇸 U.S.$70.4B
80Lloyds Banking Group🇬🇧 UK$69.7B
81Ilmarinen🇫🇮 Finland$69.1B
82Colorado Employees🇺🇸 U.S.$68.6B
83Maryland State Retirement🇺🇸 U.S.$68.5B
84AMF Pension🇸🇪 Sweden$67.3B
85Varma🇫🇮 Finland$67.1B
86Wells Fargo🇺🇸 U.S.$66.0B
87Sunsuper🇦🇺 Australia$66.0B
88Verizon🇺🇸 U.S.$64.1B
89Illinois Teachers🇺🇸 U.S.$64.0B
90J.P. Morgan Chase🇺🇸 U.S.$62.8B
91Electricity Supply Pension🇬🇧 UK$62.5B
92FedEx🇺🇸 U.S.$60.7B
93Nevada Public Employees🇺🇸 U.S.$58.8B
94B.C. Municipal🇨🇦 Canada$58.7B
95AP Fonden 4🇸🇪 Sweden$57.7B
96Missouri Schools & Education🇺🇸 U.S.$57.0B
97AP Fonden 3🇸🇪 Sweden$55.9B
98Social Insurance Funds🇻🇳 Vietnam$55.7B
99Organization for Workers🇯🇵 Japan$55.6B
100Illinois Municipal🇺🇸 U.S.$54.9B

U.S. fund data are as of Sep. 30, 2021, and non-U.S. fund data are as of Dec. 31, 2021. There are some exceptions as noted in the graphic footnotes.

Japan’s Government Pension Investment Fund (GPIF) is the largest in the ranking for the 21st year in a row. For a time, the fund was the largest holder of domestic stocks in Japan, though the Bank of Japan has since taken that title. Given its enormous size, investors closely follow the GPIF’s actions. For instance, the fund made headlines for deciding to start investing in startups, because the move could entice other pensions to make similar investments.

America is home to 47 funds on the list, including the largest public sector fund: the Thrift Savings Plan (TSP), overseen by the Federal Retirement Thrift Investment Board. Because of its large financial influence, both political parties have been accused of using it as a political tool. Democrats have pushed to divest assets in fossil fuel companies, while Republicans have proposed blocking investment in Chinese-owned companies.

Russia’s National Wealth Fund comes in at number 19 on the list. The fund is designed to support the public pension system and help balance the budget as needed. With Russia’s economy facing difficulties amid the Russia-Ukraine conflict, the government has also used it as a rainy day fund. For instance, Russia has set aside $23 billion from the fund to replace foreign aircraft with domestic models, because Western sanctions have made it difficult to source replacement parts for foreign planes.

The Future of Pension Funds

The biggest pension funds can have a large influence in the market because of their size. Of course, they are also responsible for providing retirement income to millions of people. Pension funds face a variety of challenges in order to reach their goals:

  • Geopolitical conflict creates volatility and uncertainty
  • High inflation and low interest rates (relative to long-term averages) limit return potential
  • Aging populations mean more withdrawals and less fund contributions

Some pension funds are turning to alternative assets, such as private equity, in pursuit of more diversification and higher returns. Of course, these investments can also carry more risk.

Ontario Teachers’ Pension Plan, number 18 on the list, invested $95 million in the now-bankrupt cryptocurrency exchange FTX. The plan made the investment through its venture growth platform, to “gain small-scale exposure to an emerging area in the financial technology sector.”

In this case, the investment’s failure is expected to have a minimal impact given it only made up 0.05% of the plan’s net assets. However, it does highlight the challenges pension funds face to generate sufficient returns in a variety of macroeconomic environments.

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