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:
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:
If we don't end neoliberalism we'll see more of what happened in the last 25 years, warns Oxfam. pic.twitter.com/i1CH3dswFY
— Johan Norberg (@johanknorberg) January 17, 2017
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.
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.
Visualizing U.S. GDP by Industry in 2023
Services-producing industries account for the majority of U.S. GDP in 2023, followed by other private industries and the government.
Visualizing U.S. GDP by Industry
The U.S. economy is like a giant machine driven by many different industries, each one akin to an essential cog that moves the whole.
Understanding the breakdown of national gross domestic product (GDP) by industry shows where commercial activity is bustling and how diverse the economy truly is.
The above infographic uses data from the Bureau of Economic Analysis to visualize a breakdown of U.S. GDP by industry in 2023. To show this, we use value added by industry, which reflects the difference between gross output and the cost of intermediate inputs.
The Top 10 U.S. Industries by GDP
As of Q1 2023, the annualized GDP of the U.S. sits at $26.5 trillion.
Of this, 88% or $23.5 trillion comes from private industries. The remaining $3 trillion is government spending at the federal, state, and local levels.
Here’s a look at the largest private industries by economic contribution in the United States:
|Industry||Annualized Nominal GDP |
(as of Q1 2023)
|% of U.S. GDP|
|Professional and business services||$3.5T||13%|
|Real estate, rental, and leasing||$3.3T||12%|
|Educational services, health care, and social assistance||$2.3T||9%|
|Finance and insurance||$2.0T||8%|
|Arts, entertainment, recreation, accommodation, and food services||$1.2T||4%|
|Other private industries||$2.6T||10%|
Like most other developed nations, the U.S. economy is largely based on services.
Service-based industries, including professional and business services, real estate, finance, and health care, make up the bulk (70%) of U.S. GDP. In comparison, goods-producing industries like agriculture, manufacturing, mining, and construction play a smaller role.
Professional and business services is the largest industry with $3.5 trillion in value added. It comprises establishments providing legal, consulting, design, administration, and other services. This is followed by real estate at $3.3 trillion, which has consistently been an integral part of the economy.
Due to outsourcing and other factors, the manufacturing industry’s share of GDP has been declining for decades, but it still remains a significant part of the economy. Manufacturing of durable goods (metals, machines, computers) accounts for $1.6 trillion in value added, alongside nondurable goods (food, petroleum, chemicals) at $1.3 trillion.
The Government’s Contribution to GDP
Just like private industries, the government’s value added to GDP consists of compensation of employees, taxes collected (less subsidies), and gross operating surplus.
|Government||Annualized Nominal GDP |
(as of Q1 2023)
|% of U.S. GDP|
|State and Local||$2.1T||8%|
Figures may not add up to the total due to rounding.
State and local government spending, largely focused on the education and public welfare sectors, accounts for the bulk of value added. The Federal contribution to GDP amounts to roughly $948 billion, with 52% of it attributed to national defense.
The Fastest Growing Industries (2022–2032P)
In the next 10 years, services-producing industries are projected to see the fastest growth in output.
The table below shows the five fastest-growing industries in the U.S. from 2022–2032 in terms of total output, based on data from the Bureau of Labor Statistics:
|Industry||Sector||Compound Annual Rate of Output Growth (2022–2032P)|
|Computing infrastructure providers, data processing, and related services||Information||3.9%|
|Wireless telecommunications carriers (except satellite)||Information||3.6%|
|Home health care services||Health care and social assistance||3.6%|
|Oil and gas extraction||Mining||3.5%|
Three of the fastest-growing industries are in the information sector, underscoring the growing role of technology and digital infrastructure. Meanwhile, the projected growth of the oil and gas extraction industry highlights the enduring demand for traditional energy sources, despite the energy transition.
Overall, the development of these industries suggests that the U.S. will continue its shift toward a services-oriented economy. But today, it’s also worth noticing how services- and goods-producing industries are increasingly tied together. For example, it’s now common for tech companies to produce devices, and for manufacturers to use software in their operations.
Therefore, the oncoming tide of growth in service-based industries could potentially lift other interconnected sectors of the diverse U.S. economy.
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