Oxfam
warns elite conference of widening inequality gap, days ahead of Davos economic summit in
Switzerland
The
Swiss ski resort of Davos, home to the annual
meeting
of the World Economic Forum.
Photograph:
Christian Kober/Robert Hardi/REX
Billionaires and
politicians gathering in Switzerland this week [editor’s note: article was
published week of 19 January 2015] 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.”
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