An international organization has warned that the global inequality crisis is reaching new extremes, as the richest 1% now own more wealth than the rest of the world combined.
“Power and privilege is being used to skew the economic system to increase the gap between the richest and the rest,” says the Oxfam in its latest report “An Economy for the 1 percent”. The report says a global network of tax havens have further enabled the richest individuals to hide $7.6 trillion. “The fight against poverty will not be won until the inequality crisis is tackled.”
The report says, the wealth owned by the bottom half of humanity has fallen by a trillion dollars in the past five years. “This is just the latest evidence that today we live in a world with levels of inequality we may not have seen for over a century. “An Economy for the 1% looks at how this has happened, and why, as well as setting out shocking new evidence of an inequality crisis that is out of control.”
The report says in 2015, just 62 individuals had the same wealth as 3.6 billion people – the bottom half of humanity. This figure is down from 388 individuals as recently as 2010. “The wealth of the richest 62 people has risen by 44% in the five years since 2010 – that’s an increase of more than half a trillion dollars ($542bn), to $1.76 trillion,” says the report.
Meanwhile, the report says, the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 41%. “Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while half of that increase has gone to the top 1%”.
The Oxfam report says average annual income of the poorest 10% of people in the world has risen by less than $3 each year in almost a quarter of a century. Their daily income has risen by less than a single cent every year.
“Growing economic inequality is bad for us all – it undermines growth and social cohesion. Yet the consequences for the world’s poorest people are particularly severe,” notes the report, adding: “Apologists for the status quo claim that concern about inequality is driven by ‘politics of envy’. They often cite the reduction in the number of people living in extreme poverty as proof that inequality is not a major problem. But this is to miss the point. As an organization that exists to tackle poverty, Oxfam is unequivocal in welcoming the fantastic progress that has helped to halve the number of people living below the extreme poverty line between 1990 and 2010. Yet had inequality within countries not grown during that period, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth.”
“There is no getting away from the fact that the big winners in our global economy are those at the top. Our economic system is heavily skewed in their favor, and arguably increasingly so. Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate. Once there, an ever more elaborate system of tax havens and an industry of wealth managers ensure that it stays there, far from the reach of ordinary citizens and their governments. One recent estimate4 is that $7.6 trillion of individual wealth – more than the combined gross domestic product (GDP) of the UK and Germany – is currently held offshore.”
Oxfam is calling upon leaders around the world to take action to show they are on the side of the majority, and to bring a halt to the inequality crisis. From living wages to better regulation of the activities of the financial sector, there is plenty that policy makers can do to end the economy for the 1% and start building a human economy that benefits everyone.
It is calling for giving workers a living wage and close the gap with executive rewards: by increasing minimum wages towards living wages; with transparency on pay ratios; and protecting workers’ rights to unionize and strike.
Oxfam is also calling upon the governments to promote women’s economic equality and women’s rights: by providing compensation for unpaid care; ending the gender pay gap; promoting equal inheritance and land rights for women; and improving data collection to assess how women and girls are affected by economic policy.
Oxafam’s other recommendations include keeping the influence of powerful elites in check: by building mandatory public lobby registries and stronger rules on conflict of interest; changing the global system for R&D and the pricing of medicines so that everyone has access to appropriate and affordable medicines: by negotiating a new global R&D treaty; sharing the tax burden fairly to level the playing field: by shifting the tax burden away from labor and consumption and towards wealth, capital and income from these assets; using progressive public spending to tackle inequality by prioritizing policies, practice and spending that increase financing for free public health and education to fight poverty and inequality at a national level.