Worlds richest gained 82% of new wealth in 2017, Oxfam report shows

Worlds richest gained 82% of new wealth in 2017, Oxfam report shows

Growing inequality resulted in 82% of new global wealth going to the richest 1% last year, while the poorest half of the world saw their prosperity flatline, a report by Oxfam has shown.

It means that of the $9.2tn (€8.3tn) increase in global wealth between July 2016 and June 2017, around $7.6tn (€6.8tn) went to 75 million people, while the bottom 3.7 billion saw no increase.

It helped spark the sharpest increase in the number of billionaires ever recorded, to 2,043, with one created every two days, according to Oxfam’s report, published ahead of the annual World Economic Forum of global political and business leaders in Swiss ski resort Davos.

The wealth of those billionaires increased by $762bn (€624.4bn) over 12 months, it added.

Mark Goldring, chief executive of Oxfam GB, said the statistics signal that "something is very wrong with the global economy".

"The concentration of extreme wealth at the top is not a sign of a thriving economy but a symptom of a system that is failing the millions of hard-working people on poverty wages who make our clothes and grow our food."

He said a living wage, "decent conditions" and equality for women were essential if work was to be a "genuine route out of poverty".

"If that means less for the already wealthy then that is a price that we - and they - should be willing to pay," Mr Goldring added, as he pushed for a crackdown on tax avoidance and a revamp of business models that prioritise social benefit over shareholder returns.

Oxfam said tax avoidance by businesses and wealthy individuals is costing developing countries and poorer regions around $170bn annually (€139.65bn), which could otherwise be allocated towards public services and "used to fight poverty".

But Mark Littlewood, director general of free market think tank the Institute of Economic Affairs, accused Oxfam of peddling a "gross misrepresentation of world poverty" which he said "fails to line up with everything else we know about human advancement and income improvements".

"Demonising capitalism may be fashionable in the affluent Western world but it ignores the millions of people who have risen out of poverty as a result of free markets."

He said poverty would be eradicated by implementing the "right institutional framework" to advance economic growth and said raising minimum wages and levying higher taxes on the rich were not the answer and would only lead to disappearing jobs and "reduce wealth" without distributing it.

Mr Littlewood added that statistics around the net wealth of the richest 1% was down to demographics.

"We know from the life cycle of asset and debt accumulation that people do not tend to build up wealth until well into their working lives.

"Furthermore, many of the oldest people will live in the very rich countries, and are usually very asset-rich. It’s unsurprising that the global net wealth distribution is so skewed - demographics alone are vastly important."

A UK government spokeswoman said: "This government is building a stronger economy through our balanced approach to public finances. As a result, employment is at a near-record high, the richest 1% are paying more tax than ever before, and income inequality has fallen since 2010.

"Globally, the UK is leading the way to drive down poverty, creating jobs and opportunities including for girls and women.

"We are supporting the poorest countries to stand on their own two feet by helping them manage their finances better and reforming tax systems, in order to fund vital health and education services.

"This is helping to boost global prosperity and security, which is firmly in all our interests."

- PA

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