Billionaires and politicians gathering in Switzerland this week will come under pressure to tackle rising inequality after a study by Oxfam found that – on current trends – by next year, 1% of the world’s population will own more wealth than the other 99%.
The charity’s research, published on Monday, shows that the share of the world’s wealth owned by the best-off 1% has increased from 44% in 2009 to 48% in 2014, while the least well-off 80% currently own just 5.5%.
Oxfam added that on current trends the richest 1% would own more than 50% of the world’s wealth by 2016.
Winnie Byanyima, executive director of Oxfam International and one of the six co-chairs at this year’s WEF, said the increased concentration of wealth seen since the deep recession of 2008-09 was dangerous and needed to be reversed.
“The message is that rising inequality is dangerous. It’s bad for growth and it’s bad for governance. We see a concentration of wealth capturing power and leaving ordinary people voiceless and their interests uncared for.”
Oxfam made headlines at Davos last year with a study showing that the 85 richest people on the planet have the same wealth as the poorest 50% (3.5 billion people). The charity said this year that the comparison was now even more stark, with just 80 people owning the same amount of wealth as more than 3.5 billion people, down from 388 in 2010.
Separate research by the Equality Trust, which campaigns to reduce inequality in the UK, found that the richest 100 families in Britain in 2008 had seen their combined wealth increase by at least £15bn, a period during which average income increased by £1,233. Britain’s current richest 100 had the same wealth as 30% of UK households, it added.
Pope Francis and the IMF managing director Christine Lagarde have been among those warning that rising inequality will damage the world economy if left unchecked, while the theme of Thomas Piketty’s best-selling book Capital was the drift back towards late 19th century levels of wealth concentration.
Barack Obama’s penultimate State of the Union address on Tuesday is also expected to be dominated by the issue of income inequality.
He will propose a redistributive tax plan to extract more than $300bn (£200bn) in extra taxes from the 1% of rich earners in order to fund benefits specifically targeted at working families.
However, the odds of the White House having any success persuading Congress to adopt the plan, given the Republicans’ new grip on both chambers, are extremely long.
Oxfam said the wealth of the richest 80 doubled in cash terms between 2009 and 2014, and that there was an increasing tendency for wealth to be inherited and to be used as a lobbying tool by the rich to further their own interests. It noted that more than a third of the 1,645 billionaires listed by Forbes inherited some or all of their riches, while 20% have interests in the financial and insurance sectors, a group which saw their cash wealth increase by 11% in the 12 months to March 2014.
These sectors spent $550m lobbying policymakers in Washington and Brussels during 2013. During the 2012 US election cycle alone, the financial sector provided $571m in campaign contributions.
Source: The Guardian