“An Economy for 1% (percent)” is the title of the latest inequality report by the Oxfam, the British humanitarian organisation that aims to tackle poverty through its numerous campaigns and activities.
The annual report released by the firm coincided with the start of the World Economic Forum (WEF) in Davos, Switzerland, and has caused an uproar at how the rich are getting richer at the expense of the poor staying poor.
“There is no getting away from the fact that the big winners in our global economy are those at the top. Our economic system is heavily skewed in their favour, and arguably increasingly so. Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate.”
In 2016, the report had said that the 62 richest people on earth owned as much wealth as the bottom half of the population. However, the new revision cuts the figure down to eight following new information gathered by Swiss bank Credit Suisse.
However, “wealth” as defined by Oxfam might not mean what most people think because Credit Suisse’s annual Global Wealth Databook, the primary data source for Oxfam’s report, uses net wealth, defined as “marketable value of financial assets plus non-financial assets (principally housing and land) minus debts.”
This doesn’t mean Oxfam’s number is wrong. The one-percenters do indeed control their acquisition of wealth. Analysts are of the opinion, however, that “assets minus debt” might not be the best way to analyse global inequality, as low net-worth individuals in rich countries will appear poorer under Oxfam’s definition of wealth than the low net-worth individuals in poor countries
The Oxfam findings should help build a stronger case for an increase in the federal minimum wage for many countries.
In 2014, the World Economic Forum said that widening income inequality was most likely to cause serious damage in the next decade, including a global trust crisis between the rich and the poor as corporations would most likely take the first hit.
The latest report shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 38 percent. Meanwhile, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. The report also shows that women are disproportionately affected by inequality, as only nine women make up the list as opposed to fifth-three men.
Oxfam is calling for immediate action to tackle the inequality crisis which threatens to undermine the World Bank’s goal to end extreme poverty by 2030. The aid organisation sees the end of tax havens as an important step that can achieve wealth equality as rich individuals and corporations will no longer avoid contributing to society.