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World’s Richest 1 Percent to Own Half of Global Wealth by 2016: Oxfam

Al-Akhbar | January 19, 2015

The world’s wealthiest 1 percent are expected to own more than 50 percent of the world’s wealth by 2016, the UK-based charity Oxfam International reported Monday.

“The richest people in the world have seen their share of global wealth increase to 48 percent in 2014 from 44 per cent in 2009,” Oxfam said in the 12-page report entitled “Wealth: Having it all, and wanting more.”

The average wealth per adult in this group is $2.7 million (2.3 million euros), Oxfam said.

“At this rate, it will be more than 50 percent in 2016,” the report read.

The majority of the remaining 52 percent of global wealth shared between the other 99 percent is owned by the richest 20 percent, leaving just 5.5 percent for the remaining 80 percent of people in the world — the equivalent of $3,851 (3,330 euros) per adult.

“Do we really want to live in a world where the 1 percent own more than the rest of us combined? The scale of global inequality is quite simply staggering,” Winnie Byanyima, Executive Director of Oxfam International, warned.

In 2010, the richest 80 people in the world had a net wealth of $1.3 trillion, according to the report. By 2014, the 80 people who top the Forbes rich list had a collective wealth of $1.9 trillion, an increase of $600 billion in just 4 years.

Byanyima said 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.”

Economists say extreme income inequality has consequences for economic growth and on development.

“Income inequality has a negative and statistically significant impact on subsequent growth. In particular, what matters most is the gap between low income households and the rest of the population,” economist Federico Cingano wrote in a study published by the Organization for Economic Co-operation and Development in June 2014.

Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand. In the United States, the United Kingdom, Sweden, Finland and Norway, the growth rate would have been more than one fifth higher had income disparities not widened, the study shows.

“On the other hand, greater equality helped increase GDP per capita in Spain, France and Ireland prior to the crisis,” Cingano wrote.

It also has an effect on human capital: “Increased income disparities depress skills development among individuals with poorer parental education backgrounds, both in terms of the quantity of education attained (e.g. years of schooling), and in terms of its quality (i.e. skill proficiency),” Cingano said.

Laureate economist Joseph Stiglitz agreed.

“The extreme inequalities in incomes and assets we see in much of the world today harms our economies, our societies, and undermines our politics. Whilst we should all worry about this it is of course the poorest who suffer most, experiencing not just vastly unequal outcomes in their lives, but vastly unequal opportunities too,” Stiglitz said on Oxfam’s website.

Oxfam called upon states to tackle tax evasion, improve public services, tax capital rather than labor, and introduce living minimum wages, among other measures, in a bid to ensure a more equitable distribution of wealth.

The consequences of policies to reduce income inequality could be significant, the Oxfam report said. If India stopped inequality from rising, 90 million more men and women could be lifted out of extreme poverty by 2019, according to the report.

(Anadolu, Al-Akhbar, AFP)

January 19, 2015 - Posted by aletho | Economics, Supremacism, Social Darwinism | India, Mexico, New Zealand, United States