Sanders uses this factoid to highlight a number of his proposals, including making the wealthy pay their “fair share of taxes,” equal pay for women and a “living wage” for Americans.
What is this claim based on?
The data on the billionaires comes from the annual Forbes list, comparing their estimated net worth in March 2013 and March 2015.
About a third of the billionaires became recently rich because of the computer and Internet boom, such as Bill Gates (Microsoft), Jeff Bezos (Amazon and also owner of The Washington Post), Mark Zuckerberg (Facebook), Larry Ellison (Oracle) and Larry Page and Sergey Brin (Google). Another group comes from prominent families such as the two Koch brothers and four members of the Walton family (Wal-Mart). From Wall Street, there’s Warren Buffett and Michael Bloomberg. Finally, there’s casino mogul Sheldon Adelson.
Some of this wealth is quite recent. Zuckerberg is 31 and Facebook, started in his Harvard dorm room, was only three years old when Sanders became a senator in 2007. Indeed, for most of these billionaires, much of their wealth is tied to the stock value of their companies. So when the stock market rises, as it did between 2013 and 2015, so does their wealth.
All told, in the 2013, the 15 individuals had a combined net worth of $476.6 billion. By 2015, the total had grown by just over $170 billion—for a total of nearly $650 billion.
The Sanders campaign took that $170 billion figure and compared it to a snapshot of the net worth of Americans. According to the Federal Reserve’s Survey of Consumer Finance, the bottom 43 percent of Americans had a total net worth of $134 billion in 2013 (the latest available data). The bottom 43 percent is equal to approximately 138 million Americans. (The Institute of Policy Studies, via the Sanders campaign, provided a breakdown of the wealth percentiles from the survey on the condition we not publish the underlying data. )
Hence, the Sanders statistic emerges that the 15 wealthiest Americans gained as much net worth as bottom 100 million Americans combined. It’s possible the disparity is even greater because the superwealthy have the tools to move assets off shore or into trusts that make it more difficult to track their net worth.
But there’s less to this statistic than meets the eye. The bottom 15 percent of Americans have so much negative net worth that it takes many more Americans — approximately the bottom 40 percent —until any overall positive net worth is recorded. Indeed, as our colleagues at FactCheck.org noted concerning a different Sanders claim, the lawmaker — who has a reported net worth of about $330,000 — by himself has more net worth than the bottom 40 percent.
Once the figures climb into positive net worth, the numbers quickly climb. For the bottom 44 percent of Americans, for instance, there’s almost $200 billion of net worth.
“The question as to whether total net worth is a distortion is a policy and political question,” said Chuck Collins, who co-authored the Institute of Policy Studies report with Josh Hoxie, a former Sanders legislative aide. “We think it’s relevant how many U.S. households have zero or negative net worth —as well as how little net worth is possessed by households in the bottom 50-60 percent. It is a juxtaposition that we think dramatizes the extreme levels of inequality we are living in.”
Interestingly, Forbes provides a day-by-day updating of the wealth of the wealthiest Americans. As of Jan. 26, it’s clear that this group has lost ground in the last 10 months. Some people, such as Bezos, have seen big gains even with the recent stock market slump; he’s added almost $17 billion to his net worth. But many others have lost billions, so that overall the net worth of the 15 wealthiest Americans has declined almost $35 billion. Under the logic of this ad, that is as much negative net worth as the bottom 39.5 percent.
“The market has tanked since we ran this data and wealth has declined substantially since September for almost everyone, including some of our nation’s billionaires,” Collin acknowledged. “Saying the short-term fluctuations in wealth for those at the top is equal to current negative wealth for those at the bottom conflates the point that the overall wealth for those at the top has been on upward trajectory for years and is extremely this trajectory, despite the short-term drop that Forbes reports.”
We agree the wealth of the 15 richest Americans is certainly staggering. Another way to look at it is they have as much net worth as the bottom half of the American population.
We will leave it to readers to decide if this means the economy is “rigged”—or if innovative entrepreneurs simply have the ability today to earn vast sums of money. While Sanders says he wants to make the wealthy pay their fair share, it is worth noting that five members of this group — Gates, Buffett, Ellison, Bloomberg and Zuckerberg — have signed a pledge saying they will give up most of their wealth for philanthropic causes.
The Pinocchio Test
This is certainly an interesting statistic, and the math generally adds up. But we are going to give it a Pinocchio for the reasons noted above. The net worth of the bottom 40 percent is dragged down significantly by the negative net worth of the bottom 15 percent. Moreover, the wealth of the nation’s billionaires is heavily impacted by the gyrations of stock market. Those caveats may be difficult to insert in a 30-second political ad, but it’s important to keep them in mind.
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