1 per cent of the world will own more than half its wealth by 2016, Oxfam report says

Updated

More than half the world's wealth will be owned by the richest 1 per cent of the population by next year as global inequality soars, according to a new report from Oxfam.

Oxfam is warning that global inequality gap has exploded in the last four years and is calling on world leaders to urgently address this at the World Economic forum in Davos, Switzerland next week.

In a report released ahead of the forum, Oxfam said the top tier had seen their share of wealth increase from 44 per cent in 2009 to 48 per cent in 2014. On current trends, it will exceed 50 per cent in 2016.

Putting the figures in perspective, Oxfam Australia chief executive officer Dr Helen Szoke told the ABC that inequality was growing at an alarming rate.

"In 2010 for example, it took 388 billionaires globally to match the wealth of the poorest 3.5 billion people," she said.

Now, in just four years, it only takes 80 billionaires to own the same wealth as the poorest half of the world.

"It has surprised us and it surprises us at a time where there's so much evidence that we should really be tackling this."

Dr Szoke said though the explosion in inequality was partly due to large proportions of global wealth being inherited, many measures to ensure equality had been overriden by fast-changing technology.

"The actual global checks and balances that might have once achieved the kind of reasonable equality that occurred after the Second World War have broken down; they're not coping with the kind of way that business is down by the very fast moving global economy, by the sort of digital world that we live in one way or the other," she said.

Oxfam said it would call for action to tackle rising inequality at the Davos meeting, which starts on Wednesday, including a crackdown on tax dodging by corporations and progress towards a global deal on climate change.

"The reason that this should be raised at a forum like Davos, is that inevitably with the concentration of wealth comes the concentration of power, and what we need are governments to be operating in the interests of the poorest as well as the richest," Dr Szoke said.

"At the moment in our domestic context, and in many other contexts, [the burden of tax] falls on labour and consumption. We're saying if you have this concentration of wealth, we really need to look at capital and wealth tax.

"So, stop the dodging, make sure that there are fair taxes that are paid by people, but then we also need to look actually look at how those taxes are used, and that really goes back to the issues of what are the social structures that are put in place that are the safety net

for people across the world, like a minimum income guarantee.

"Horrifyingly, we are a long way off that."

Unemployment to rise by 11 million: UN

Meanwhile, the United Nations has warned that unemployment will rise by 11 million in the next five years due to slower growth and turbulence.

More than 212 million people will be jobless by 2019 against the current level of 201 million, the International Labour Organisation (ILO) said.

"The global economy is continuing to grow at tepid rates and that has clear consequences," ILO head Guy Ryder said in Geneva.

"The global jobs gap due to the crisis stands at 61 million jobs worldwide," he said, referring to the number of jobs lost since the start of the financial crisis in 2008.

The ILO World Employment and Social Outlook - Trends 2015 report said an extra 280 million jobs would have to be created by 2019 to close the gap created by the financial turmoil.

"This means the jobs crisis is far from over and there is no place for complacency," Mr Ryder said.

The job scenario improved in the United States, Japan and Britain but remained worrisome in several developed economies of Europe, the report said.

"The austerity trajectory... in Europe in particular has contributed dramatically to increases in unemployment," Mr Ryder said.

The report said eurozone powerhouse Germany could see unemployment rise to 5 per cent in 2017 against 4.7 per cent at present, while it was expected to fall just under the double-digit in number two eurozone economy France.

The worst-hit segment globally were those aged between 15 and 24, with the youth unemployment rate touching 13 per cent last year, almost three times the rate for adults.

The UN agency said the steep fall in oil and gas prices would hit the labour market hard in producing countries in Latin America, Africa and the Arab world.

But one of the rare bits of good news was that the middle class comprised more than 34 per cent of total employment in developing countries from 20 per cent in the 1990s, Mr Ryder said.

However, extreme poverty continues to affect one out of 10 workers globally who earn less than $1.50 a day, he added.

ABC/AFP

Topics: business-economics-and-finance, unemployment, tax, australia

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