The UK-based charity Oxfam says in a new report that the income of the world's richest one percent has increased by 60 percent in the last 20 years.The report says the world's 100 richest earned enough in 2012 to end extreme poverty four times over.
According UK-based charity Oxfam, in its report entitled "The Cost Of Inequality: How Wealth And Income Extremes Hurt Us All," (PDF) efforts to address the issue of global poverty were being hindered by what it terms an "explosion in extreme wealth."
Oxfam says that the richest one per cent of the world's population have increased their income by 60% in the last 20 years and that rapid accumulation of wealth by the world's top one percent continues on an unprecedented scale at the expense of the needs of the world's poorest.
The group said the "explosion of wealth" at the top has undermined efforts to fight global extreme poverty.
The Oxfam report (PDF) says that while the world's 100 richest made a net income of $240bn (£150bn) in 2012, the world's poorest subsisted on less than $1.25 (78p) a day. The report said the $240 billion net income of the world's 100 richest could end global poverty four times over.
The chief executive of Oxfam, Barbara Stocking, said it was no longer possible to pretend that the "explosion of wealth" for a minority would have beneficial trickle-down effect for the majority. She said that on the contrary the "reverse is true."
Stocking said: "Concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else - particularly those at the bottom of the economic ladder."
Al Jazeera reports that Ben Phillips, a campaign director at Oxfam, said, "We sometimes talk about the 'have-nots' and the 'haves' - well, we're talking about the 'have-lots'. [...] We're anti-poverty agency. We focus on poverty, we work with the poorest people around the world. You don't normally hear us talking about wealth. But it's gotten so out of control between rich and poor that one of the obstacles to solving extreme poverty is now extreme wealth."
He added: "We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true. Concentration of resources in the hands of the top one per cent depresses economic activity and makes life harder for everyone else – particularly those at the bottom of the economic ladder. In a world where even basic resources such as land and water are increasingly scarce, we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left."
Oxfam called for what it described as a "global new deal to reverse decades of increasing inequality." The group called on world leaders to commit to reducing global income inequality to 1990 levels and to work to limit extension of income extremes.
According to the BBC, the Oxfam report was released in time for a four-day summit of leaders of the World Economic Forum in Davos, Switzerland, scheduled for next week.
Oxfam (PDF) recommended a number of measures to address global income inequality. Part of the suggestions include:
Closure of tax havens around the world
A reversal of "the trend towards more regressive forms of taxation"
A global minimum corporation tax rate
Increased investment in free public services and safety nets for people out of work or ill.Oxfam said that closing tax havens could yield an additional $189bn in tax revenues. The group estimated that about $32 trillion is being held in tax havens.
According to Oxfam, "extreme wealth and income is not only unethical it is also economically inefficient, politically corrosive, socially divisive and environmentally destructive."
The group argued that the issue of income inequality affects all parts of the world: "In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10% now take home nearly 60% of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more unequal than at the end of apartheid."
The group said that in the US, the share of national income accruing to the top one percent has doubled since 1980. Members of the richest one percent are estimated to use as much as 10,000 times more carbon than the average US citizen.
The Guardian notes that it is unusual for charities to attack the wealthy because they are the major source of funding for their activities. Billionaires such as Bill Gates and Warren Buffett are among a group of US billionaires who are helping to fund global aid projects.