Oxfam warns of widening inequality gap, days ahead of Davos economic summit in Switzerland
Billionaires and
politicians gathering in Switzerland this week will come under pressure to
tackle rising inequality after a study found that – on current trends – by next
year, 1% of the world’s population will own more wealth than the other 99%.
Ahead of this week’s
annual meeting of the World
Economic Forum in the ski resort of Davos, the anti-poverty charity Oxfam
said it would use its high-profile role at the gathering to demand urgent
action to narrow the gap between rich and poor.
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.
In an interview with
the Guardian, Byanyima said: “We want to bring a message from the people in the
poorest countries in the world to the forum of the most powerful business and
political leaders.
“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.
Byanyima said: “Do
we really want to live in a world where the 1% own more than the rest of us
combined? The scale of global inequality is quite simply staggering and despite
the issues shooting up the global agenda, the gap between the richest and the rest
is widening fast.”
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.
Inequality has moved
up the political agenda over the past half-decade amid concerns that the
economic recovery since the global downturn of 2008-09 has been accompanied by
a squeeze on living standards and an increase in the value of assets owned by
the rich, such as property and shares.
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. But Obama’s
embrace of what he calls “middle-class economics” – as opposed to the trickle-down
economics of the Republicans – is likely to ensure that inequality remains a
pivotal theme of the 2016 presidential campaign.
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.
Byanyima said: “I
was surprised to be invited to be a co-chair at Davos because we are a critical
voice. We go there to challenge these powerful elites. It is an act of courage
to invite me.”
Oxfam said it was
calling on governments to adopt a seven point plan:
• Clamp down on tax
dodging by corporations and rich individuals.
• Invest in
universal, free public services such as health and education.
• Share the tax
burden fairly, shifting taxation from labour and consumption towards capital
and wealth.
• Introduce minimum
wages and move towards a living wage for all workers.
• Introduce equal
pay legislation and promote economic policies to give women a fair deal.
• Ensure adequate
safety-nets for the poorest, including a minimum-income guarantee.
• Agree a global
goal to tackle inequality.
Speaking to the
Guardian, Byanyima added: “Extreme inequality is not just an accident or a
natural rule of economics. It is the result of policies and with different
policies it can be reduced. I am optimistic that there will be change.
“A few years ago the
idea that extreme poverty was harmful was on the fringes of the economic and
political debate. But having made the case we are now seeing an emerging
consensus among business leaders, economic leaders, political leaders and even
faith leaders.”
The Guardian, 19 January 2015
The Guardian, 19 January 2015
