EIGHTY-TWO percent of the wealth generated last year went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth, according to a new report from Oxfam.
As global leaders and business elites gather at the World Economic Forum in Davos this week, Reward Work, Not Wealth reveals how income inequality is becoming more severe as the global economy enables the wealthy to accumulate fortunes while millions struggle in poverty.
According to the report, 2017 saw the biggest increase in billionaires in history, one more every two days. This huge increase could have ended global extreme poverty seven times over. Billionaires wealth has also grown six times faster than the wages of ordinary workers, up 13 percent annually since 2010.
It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. But it’s not just developing countries that are put under the spotlight in Oxfam’s research. The report highlights that, in the United States, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.
Using the example of Stefan Persson – whose father founded H&M and who received EUR658 million (US$806 million) in share dividends last year – in contrast to Anju, a garment worker in Bangladesh who earns US$900 a year, the report stresses the importance of building an economy for ordinary working people, not the rich and powerful.
“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system,” Oxfam International Executive Director Winnie Byanyima said.
“The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors.”
According to the report, those getting worst hit are women. Across the world, women consistently earn less than men and are usually in the lowest paid and least secure forms of work. By comparison, nine out of 10 billionaires are men. At current rates of change, it will take 217 years to close the gap in pay and employment opportunities between women and men.
To rectify the growing problem, the charity suggested limiting returns to shareholders and top executives, and ensuring the wealthy pay their fair share of tax through higher taxes and a crackdown on tax avoidance. Oxfam estimates a global tax of just 1.5 percent on billionaires’ wealth could pay for every child to go to school.
“It’s hard to find a political or business leader who doesn’t say they are worried about inequality. It’s even harder to find one who is doing something about it. Many are actively making things worse by slashing taxes and scrapping labour rights,” Byanyima said.
“People are ready for change. They want to see workers paid a living wage; they want corporations and the super-rich to pay more tax; they want women workers to enjoy the same rights as men; they want a limit on the power and the wealth which sits in the hands of so few. They want action.”