The richest 1% of the population will own more than half of the world’s wealth by next year as inequality continues its relentless rise across the globe, a new report out Monday says.
The report, by the U.K.-based charity Oxfam, shows that the top 1% have grown their share of global wealth constantly since 2010. After dipping at 44% in the wake of the 2008 financial crisis, it rose to 48% by the end of last year and is poised to top 50% by the end of next year.
Oxfam’s report, entitled “Having It All And Wanting More” is an annual update that it puts out every year just ahead of the 1%’s favorite gabfest, the World Economic Forum in Davos, Switzerland, where a sprinkling of the 2,600 delegates will later this week congregate around a panel to say how shocking it all is, before retiring for champagne and canapés.
Oxfam says that the members of its global elite had an average wealth of $2.7 million per adult in 2014. If you’re reading this article and don’t fall into that category, the chances are that you fall into the 19% that owns another 46% of the world’s wealth.
The remaining 80% of humanity, some 5.6 billion people, has to manage with 5.5% of the planet’s wealth, an average of $3,851, or 1/700th of what the top 1% have.
But what really stands out is not so much the good fortune of the 1%, but of the 0.001%. It’s the people at the very top who are expanding their share of the pie the fastest. The richest 80 people on the planet doubled their cash wealth between 2009 and 2014. They now have as much as the bottom half of humanity put together. Whereas five years ago, it needed the 388 richest billionaires to rival the spending power of the poorest half, by 2014 that number had fallen to just 80.
For Oxfam, the answer to the problem is higher taxes on capital and wealth, coupled with higher minimum wages and better social safety nets (it also takes a swipe at the healthcare and financial sectors for the hundreds of millions they spend each year on lobbying).
It might be too much to expect the Davos crowd to announce a global initiative putting any of that in place, but there are increasing signs that arguments about inequality gaining traction. A study last year by the International Monetary Fund found that inequality was damaging to economic growth, while “Capital in the Twenty-First Century”, a 700-page book by French economist Thomas Piketty detailing the harmfulness of the rising concentration of wealth, was the surprise bestseller of the year among economists in the U.S. And Europe.
The message may even have reached the White House. Time reports that President Barack Obama will use his State of the Union speech this week to propose higher taxes on capital gains and a levy on the financial sector to pay for tax breaks for the broader middle class. What kind of reception those plans will get in Congress is another question.