19 Jan 2016

Richest 1% have wealth equal to rest of world - Oxfam

10:13 am on 19 January 2016

The richest 1 percent now has as much wealth as the rest of the world combined, according to Oxfam.

Super cars at the Chicago auto show.

The richest 62 people in the world have as much wealth as the poorest half of the global population, Oxfam says. Photo: AFP

It used data from Credit Suisse from October for the report, which urged leaders meeting in Davos this week to take action on inequality.

Oxfam also calculated that the richest 62 people in the world had as much wealth as the poorest half of the global population.

It criticised the work of lobbyists and the amount of money kept in tax havens.

Oxfam predicted that the 1 percent would overtake the rest of the world this time last year.

It takes cash and assets worth $US68,800 to get into the top 10 percent, and $US760,000 to be in the 1 percent.

The figures carried various caveats, for example, information about the wealth of the super-rich is hard to come by, which Credit Suisse said means its estimates of the proportion of wealth held by the 10 percent and the 1 percent is "likely to err on the low side".

As a global report, the figures also necessarily included some estimates of levels of wealth in countries from which accurate statistics are not available.

'Misleading'

Some free market think tanks questioned the credibility of the figures.

The Institute of Economic Affairs' director general Mark Littlewood said the statistics were "bogus".

"The methodology of adding up assets and subtracting debts and then making a global 'net wealth' distribution implies that many of the poorest in the world are those in advanced countries with high debts. Whilst we might have sympathy for the Harvard law graduate's plight, it is unclear that worrying about her should be the focus of a development organisation," he said.

The Adam Smith Institute's head of research Ben Southwood also said the data was "misleading".

"More meaningful measures show greater equality. Those in the middle and bottom of the world income distribution have all got pay rises of around 40 percent between 1988-2008. Global inequality of life expectancy and height are narrowing too - showing better nutrition and better healthcare where it matters most.

"What we should care about is the welfare of the poor, not the wealth of the rich," he added.

Oxfam said that the 62 richest people having as much wealth as the poorest 50 percent of the population is a remarkable concentration of wealth, given that it would have taken 388 individuals to have the same wealth as the bottom 50 percent in 2010.

"Instead of an economy that works for the prosperity of all, for future generations, and for the planet, we have instead created an economy for the 1 percent," Oxfam's report said.

The trend over the period that Credit Suisse had been carrying out this research was that the proportion of wealth held by the top 1 percent fell gradually from 2000 to 2009 and has risen every year since then.

In fact, it is only in the 2015 figures that the proportion held by the top 1 percent overtook the share taken by them in the first report in 2000.

Oxfam called on governments to take action to reverse this trend.

It wanted workers paid a living wage and the gap with executive rewards to be narrowed.

It called for an end to the gender pay gap, compensation for unpaid care and the promotion of equal land and inheritance rights for women.

And it wanted governments to take action on lobbying, reducing the price of medicines, taxing wealth rather than consumption and using progressive public spending to tackle inequality.