New York CNN —
The richest people in the world have gotten much richer in the last two years, much faster than anyone else.
According to Oxfam’s annual inequality report, released on Sunday, the top 1% has grabbed almost twice as much new wealth as the rest of the world over that period. Their wealth increased by $26 trillion, while the net worth of the bottom 99% increased by just $16 trillion.
And the wealth accumulation of the super-rich accelerated during the pandemic. Looking at the past decade, they have generated only half of all new wealth created, compared to two-thirds in recent years.
The report, which is based on data compiled by Forbes, coincides with the start of the annual meeting of the World Economic Forum in Davos, Switzerland, an elite gathering of some of the world’s wealthiest people and leaders.
Meanwhile, many of the less fortunate are struggling. About 1.7 billion workers live in countries where inflation exceeds wages. And poverty alleviation has likely stalled over the past year after the number of poor around the world skyrocketed in 2020.
“While ordinary people make daily sacrifices for basic necessities like food, the super-rich have surpassed even their wildest dreams,” said Gabriela Bucher, chief executive of Oxfam International. “Only two years later, this decade is shaping up to be the best yet for billionaires – a massive 1920s boom for the world’s richest.”
Although their fortunes have declined somewhat over the past year, billionaires around the world are still far wealthier than they were when the pandemic began.
Her net worth is $11.9 trillion, according to Oxfam. While that’s almost $2 trillion down from the end of 2021, it’s still well above the $8.6 trillion billionaires had in March 2020.
The rich are benefiting from three trends, said Nabil Ahmed, director of economic justice at Oxfam America.
At the start of the pandemic, global governments, especially wealthier countries, poured trillions of dollars into their economies to prevent a collapse. This caused stocks and other assets to appreciate in value.
“So much of that fresh money ended up with the ultra-rich, who were able to weather this stock market rise, this wealth boom,” Ahmed said. “And the guidelines for fair taxation were not there.”
Many companies have also developed well in recent years. About 95 food and energy companies more than doubled their profits in 2022, Oxfam said, as inflation sent prices soaring. Much of that money was paid out to shareholders.
In addition, the longer-term trends of dismantling workers’ rights and greater market concentration exacerbate inequality.
In contrast, global poverty increased sharply at the beginning of the pandemic. Although there has been some progress on poverty reduction since then, it is likely to have stalled in 2022, partly due to the war in Ukraine exacerbating high food and energy prices, according to World Bank data cited by Oxfam.
It’s the first time in 25 years that extreme wealth and extreme poverty have increased at the same time, Oxfam said.
To counter this growing inequality, Oxfam is urging governments to raise taxes on their wealthiest residents.
It proposes the introduction of a one-off wealth tax and windfall taxes to end global crisis profiteers, and a permanent increase in taxes for the richest 1% of residents on at least 60% of their income from work and capital.
Oxfam believes that tax rates for the top 1% should be high enough to significantly reduce their numbers and wealth. The funds will then be redistributed.
“We are facing an extreme crisis of wealth concentration,” Ahmed said. “And I think the most important thing is to realize that it’s not inevitable. A strategic requirement for curbing extreme inequality is taxing the ultra-rich.”
However, the group faces an uphill battle. About 11 countries cut taxes on the wealthy during the pandemic. And efforts to increase taxes on the wealthy failed in the US Congress in 2021, despite Democrats controlling both houses and the White House.