Oxfam say the rich are getting richer - but is that really the case?

The incredible wealth of the mega-rich is obscene - but the rest of us also benefit from global inequality, writes Political Editor Jonathan Walker

Jason Alden/PA Wire Microsoft founder and philanthropist Bill Gates
Microsoft founder and philanthropist Bill Gates

The “1 per cent” are getting richer, according to Oxfam.

In a new report, the charity warns that the richest 1% of people in the world now own 48% of all global wealth - up from just over 44% in 2010.

And the charity has even provided a handy list naming the richest people on the planet.

Top place is no surprise - it’s Bill Gates, worth $76 bilion.

But in second place is someone I have to admit I’d never heard of. Carlos Slim Helu, who apparently made most of his fortune from telecoms, is worth around $72 billion.

In third place is Amancio Ortega, Spanish co-founder of a clothing company which owns the Zare chain, among other things. He’s worth $64 billion.

You have to go all the way down to 85th place to find a Brit - landowner Gerald Cavendish Grosvenor, also known as the Duke of Westminster, is worth $13 billion, apparently.

It’s certainly a glimpse into a world that’s hard to imagine. What can life be like when you’re worth $76 billion?

But the publication of the list alongside the striking statistic that 1% of people own 48% of the wealth is a little misleading.

Because there are 7.125 billion people on the planet. So there are, by definition, 71 million people in the top one per cent (probably around 49 million people if we exclude children).

A general picture to illustrate child poverty
A general picture to illustrate child poverty

Oxfam is remarkably reticent about how wealthy you need to me to make it into the top one per cent. Instead, the charity states that members of the one per cent have an average wealth of $2.7 million - or about £1.78 million.

But this is a bit cheeky, because of course the average figure is significantly increased by the presence of all those multi-billionaires at the top. It doesn’t tell you about how wealthy you have to be to gain entry.

An answer is provided by Credit Suisse, a Switzerland-based multinational financial services company. In their “Global Wealth” report, published in 2014, they state: “More than $77,000 is required to be a member of the top 10 per cent of global wealth holders, and $798,000 to belong to the top one per cent.” That’s £520,000.

I thinks I can guess why Oxfam, despite publishing a report all about “the one per cent”, was reluctant to define the term.

It turns out that the one per cent includes people who are fairly ordinary. And while it’s easy to support Oxfam’s campaign for a fairer society when the targets are worth £76 billion, it becomes less appealing when we learn that we might be part of the problem.

Perhaps I should clarify and explain that I personally am not worth half a million pounds, not it really matters. Also, I know there are many people in our society for whom wealth of £520,000 is as unimaginable as having billions in the bank.

But there are also plenty of British people who, when you take into account the value of their homes, their pension funds and their savings, are indeed worth that much - and who appear to live perfectly ordinary lives. I suspect I know a few people who fall into this category.

It’s not an alien world, like the world of the mega-rich.

At this point, some might object that this focus on the “one per cent” is a bit of a red herring.

Some anti-poverty campaigners talk about the one per cent, but they mean it as a vivid way of illustrating the fact that a very small group of people own a huge amount of wealth.

Perhaps the real problem is the type of people Oxfam focuses on, the stupidly rich with billions in the bank. Maybe we should look at the top 0.1 per cent, or even 0,01 per cent.

His Grace, the Duke of Westminster
His Grace, the Duke of Westminster
 

But consider this - one statistic Oxfam does highlight is the fact that the richest 20 per cent of the planet own 94.5 per cent of all the wealth (leaving 5.5 per cent for the remaining 80 per cent).

And that certainly includes ordinary British (or French, German, or American) people, including many who would never think of themselves as wealthy.

Some campaigners against inequality object to this line of argument, on the grounds that it deflects attention from the obscene wealth of the super-rich. But I think our brains can cope with more than one idea at a time.

And whether we want to talk about it or not, global inequality matters. It certainly matters to us, because the days when we can take it for granted may be coming to an end, and that could hit our quality of life.

Countries like India (population 1.2 billion) will increasingly enjoy the advantages we once assumed the west had a monopoly on - highly-educated graduates, infrastructure (transport, internet etc) and an economy large and advanced enough to benefit from economies of scale.

On the upside, this could also create bigger markets for British goods and services, so perhaps everyone will benefit.

But it could mean workers in the North East increasingly competing for jobs with workers in Mumbai, or Guangzhou, China - and higher prices for some commodities as consumers in other parts of the world develop a taste for them.

The one per cent - and, even more so, the 20 per cent - can no longer assume that their place at the top will last forever.

I suspect, sadly, that the mega-rich will still enjoy the high life no matter how much the world changes. It’s the rest of us who need to worry.

Increased wealth in developing countries which have traditionally been poor is, of course, a good thing. But it creates huge challenges for our politicians, who are faced with the task of ensuring we can continue to love in the style we have become accustomed to.

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