1% will own more wealth than the 99% by next year

22 January 2015

Oxfam have highlighted widening economic inequality at the World Economic Forum in Davos this week.

If economic inequality continues to rise at its current rate, 1% of the world’s population will own more wealth than the other 99% by next year. The share of the world’s wealth owned by the richest 1% has increased from 44% in 2009 to 48% in 2014. The bottom 80% currently own only 5.5%.

Last year at Davos, Oxfam released a study that showed the 85 richest people on the planet own the same amount as the poorest 50%. This is now the richest 80 people, down from 388 in 2010.

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

Winnie Byanyima, Executive Director of Oxfam International, said: “Do we really want to live in a world where the one percent 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.

“In the past 12 months we have seen world leaders from President Obama to Christine Lagarde talk more about tackling extreme inequality but we are still waiting for many of them to walk the walk. It is time our leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world.

“Business as usual for the elite isn’t a cost free option – failure to tackle inequality will set the fight against poverty back decades. The poor are hurt twice by rising inequality – they get a smaller share of the economic pie and because extreme inequality hurts growth, there is less pie to be shared around.”

Research from the International Trade Unions Confederation shows that in a poll of 14 countries, only 50% of those questioned thought the next generation would find a decent job, 78% thought the economic system was biased in favour of the wealthy, and 62% wanted corporate power to be tamed.

Wealth inequality is gaining attention not only for being morally wrong, but also economically illogical. From Piketty’s “Capital” to Obama’s State of the Union address on Tuesday (20 January), the scourge of inequality is being increasingly discussed and placed on the global agenda.

As awareness of plummeting living standards and soaring wealth disparity grows, a strong trade union presence has assembled at Davos. Philip Jennings, general secretary of UNI Global Union, which has 20 million members, said: “Politicians and business leaders at Davos are sitting on a volcano of legitimate discontent fuelled by unemployment, inequality and austerity. Collectively we have a responsibility to face up to the need to change course. ‘Keeping Calm and Carrying On’ is no answer to the urgency and anxiety of the times. The labour movement has constructive solutions to offer: A future built on a living wage, decent jobs and collective bargaining where workers have a seat at the table.”

As Keith Ewing and John Hendy QC explain (in a UK context);

“Everybody talks about Britain needing a wage rise. But how is this to be done? Everybody talks about ensuring that everyone gets a living wage. But how is this to be done? And everybody is agreed that we need to stamp out the abuse of zero-hours contracts. But how is this to be done?

The answer is simple. Sector-wide collective agreements provide a solution to all of these problems and much else besides — the growing gender pay gap, the abuse of agency workers, and the problem of the two-tier work force and the contracting out of public services.