A study by the charity Oxfam reveals that the richest 1% will soon have more wealth than the rest of the world combined, highlighting the scale of global inequality and how it is only getting worse.
At the current rate of growth the top 1% are expected to have more than 50% of the world’s share of wealth in 2016.
Their wealth has steadily been increasing, rising from 44% in 2009 to 48% in 2014 – a four percent jump in only five years.
The report says that the “explosion in inequality” is preventing the elimination of global poverty.
Executive director of Oxfam International, Winnie Byanyima, wonders whether people really want to live in a world where the richest 1% own more than the rest of the people combined.
The top 1% have an average wealth of $2.7m per adult.
Oxfam said that 46% of the remaining 52% of global wealth is owned by the richest fifth of the world’s population. The remaining 80% of the world’s population only account for 5.5% of global wealth, with their average wealth at $3,851 (£2,544) per adult in 2014.
In a statement on Monday ahead of the annual World Economic Forum in Davos, she said:
“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,”
Adding:
“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.”
In October last year, The Global Wealth Report 2014, published by the Credit Suisse Research Institute, revealed that the wealthiest 1% of people in the world own almost half its assets. While the world’s poorest 50% of people own less than 1% of total global wealth.
Since 2008, wealth inequality has become an increasingly bigger problem, particularly in China, India and most other emerging economies.
Video – Income Inequality
Income inequality focuses on the difference between the highest and lowest earners in a country, city, region, etc. The term includes the pay gap between men and women, as well as ethnic, racial, and academic groups.