Eighty two percent of the wealth generated last year went to the richest one percent
by Fight Inequality Alliance, agencies
8:39am 23rd Jan, 2018
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 released today. The report is being launched as political and business elites gather for the World Economic Forum in Davos, Switzerland.
‘Reward Work, Not Wealth’ reveals how the global economy enables a wealthy elite to accumulate vast fortunes while hundreds of millions of people are struggling to survive on poverty pay.
Billionaire wealth has risen by an annual average of 13 percent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 percent. The number of billionaires rose at an unprecedented rate of one every two days between March 2016 and March 2017.
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. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.
It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.
Oxfam’s report outlines the key factors driving up rewards for shareholders and corporate bosses at the expense of workers’ pay and conditions. These include the erosion of workers’ rights; the excessive influence of big business over government policy-making; and the relentless corporate drive to minimize costs in order to maximize returns to shareholders.
Winnie Byanyima, Executive Director of Oxfam International said: “The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. 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.”
Women workers often find themselves off at the bottom of the heap. Across the world, women consistently earn less than men and are usually in the lowest paid and least secure forms of work. By comparison, 9 out of 10 billionaires are men.
“We have spoken to women across the world whose lives are blighted by inequality. Women in Vietnamese garment factories who work far from home for poverty pay and don’t get to see their children for months at a time. Women working in the US poultry industry who are forced to wear nappies because they are denied toilet breaks,” said Byanyima.
“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 labor rights”.
“People 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.”
Oxfam said it was “unacceptable and unsustainable” for a tiny minority to accumulate so much wealth while hundreds of millions of people struggled on poverty pay. It called on world leaders to turn rhetoric about inequality into policies to tackle tax evasion and boost the pay of workers.
“The concentration of extreme wealth at the top is not a sign of a thriving economy, but a symptom of a system that is failing the millions of hardworking people on poverty wages.”
“We need to ensure that ordinary workers receive a living wage and can insist on decent conditions, and that women are not discriminated against. If that means less for the already wealthy then that is a price that we – and they – should be willing to pay.”
Goldring said it was time to rethink a global economy in which there was excessive corporate influence on policymaking, erosion of workers’ rights and a relentless drive to minimise costs in order to maximise returns to investors.
“Most people are treading water in a stagnant global economy,” says Paul O’Brien, from Oxfam America. “A perfect storm is driving up the bargaining power of those at the top while driving down the bargaining power of those at the bottom. If such inequality remains unaddressed, it will trap people in poverty and further fracture our society.”
''Our report outlines key factors driving up rewards for inherited wealth, shareholders and corporate executives at the expense of workers’ pay and conditions. These include the erosion of workers’ rights, the excessive influence of big business and wealthy interests over government policy-making, and the relentless corporate drive to minimize costs in order to maximize returns to shareholders''.
''While President Trump was elected on a promise to fix the rigged political and economic system, the tax bill he championed and signed into law just weeks ago will only further rig the rules in favor of the rich and powerful and deepen the inequality crisis. Corporations will get massive tax cuts and wealthy heirs will get more untaxed inheritance. In Davos, President Trump will do a victory lap with the primary beneficiaries of his policy agenda, which has largely focused on boosting the incomes of the extremely wealthy while doing grave damage to the poorest and most vulnerable people in the world''.
“The elites gathering in Davos are part of the problem, but they can part of the solution,” said O’Brien. “Now is the time for all of us to ensure our economies work for everyone and not just the fortunate few.”
Oxfam is calling on governments and international institutions to recognize the detrimental impact our current economic system is having on the world’s poor and work to develop more human economies that prioritize greater equality.
Policies such ensuring all workers receive a minimum ‘living’ wage, eliminating the gender pay gap, protecting the rights of women workers, and ensuring that the wealthy pay their fair share of tax would go far in achieving this goal.
Oxfam estimates a global tax of 1.5 percent on billionaires’ wealth could pay for every child to go to school.
Across the world, women consistently earn less than men and are concentrated in the lowest paid and least secure forms of work.
“Across our world, we have heard from women struggling to make it in a system rigged against them.. To tackle extreme economic inequality, we must end gender inequality.”
Oxfam is calling for governments to ensure our economies work for everyone and not just the fortunate few:
Limit returns to shareholders and top executives, and ensure all workers receive a minimum ‘living’ wage that would enable them to have a decent quality of life. For example, in Nigeria, the legal minimum wage would need to be tripled to ensure decent living standards.
Eliminate the gender pay gap and protect the rights of women workers. At current rates of change, it will take 217 years to close the gap in pay and employment opportunities between women and men.
Ensure the wealthy pay their fair share of tax through higher taxes and a crackdown on tax avoidance and illicit financial flows, and increase spending on public services such as healthcare and education.
Results of a new global survey demonstrates a groundswell of support for action on inequality. Of the 70,000 people surveyed in 10 countries, two-thirds of all respondents think the gap between the rich and the poor needs to be urgently addressed.
The "Reward Work, Not Wealth" report also revealed that 2017 saw the biggest increase in the number of billionaires in history, at 2,043, and challenged the narrative that billionaires are created through talent, hard work and innovation, something that is claimed benefits humanity as a whole.
Instead, there is growing evidence that the richest often grow much of their wealth by way of inheritance, monopoly or crony connections to government.
The charity called on governments to commit to reorganizing the economic system to work for humanity as a whole rather than a tiny elite, describing how 42 people now own the same wealth as the bottom 3.7 billion people.
The report also cited the increased rewards for shareholders and corporate executives at the expense of workers and criticized how the wealthy are able to exercise excessive influence over government policy-making.
It estimated that $2.4 trillion will be inherited by the heirs of billionaires over the next 20 years, an amount larger than the GDP of India, a country of 1.3 billion people.
At the other end of the scale, billions of people are forced to work long hours, often in dangerous conditions and without rights, but are still unable to afford their basic needs, including food and medicine, the report said.
* New data from Credit Suisse reveals that 42 people now own the same wealth as the poorest half of humanity. Access the Oxfam report: http://bit.ly/2Dstxer http://bit.ly/2G2DPU6
Over 100 organizations sign open letter calling for meaningful solutions on inequality, by the Fight Inequality Alliance
We are a group of 133 civil society organisations from many different backgrounds and countries, representing millions of people. Together we are demanding the IMF and World Bank stop fuelling the global inequality crisis. We work for changes that are fundamental to achieving the just, equal and sustainable world we all desire.
We are united in believing that all of our struggles are both worsened by, and are the product of, the global inequality crisis. We are coming together to fight inequality, which is fuelling injustices in land, health, education, taxation, worker’s rights, women’s rights, climate change and human rights.
We are united in believing that the World Bank and IMF are too often fuelling inequality. We call on the World Bank and IMF to ensure that all operations and activities they finance contribute to reducing inequality.
The majority of people live in a country where the gap between rich and poor has grown, often rapidly and to very high levels. Inequality threatens our democracies, it corrodes our politics, and it undermines our economies. It has led to an incredible concentration of wealth, while hundreds of millions go hungry. Without action to rapidly reduce inequality we will never be able to achieve the just, equal and sustainable world we need.
Inequality is not just about income or wealth, it is about power. Runaway inequality has put too much power into the hands of the richest, and into the hands of powerful corporations. This growing divide between rich and poor has deep roots - inextricably linked with patriarchy, and exploiting and contributing to other entrenched inequalities of race, sexual identity, caste and indigenous group.
The IMF and the World Bank have recently recognised the inequality crisis, but for 40 years they have been among those responsible for creating and maintaining it. This has to change.
Concern about inequality and “shared prosperity” have now become a talking point at the institutions, but real action has lagged. Steps must be taken to truly reduce inequality, not just achieve slightly better incomes for the poor while the top 1% continue to consolidate their power and wealth at an alarming pace.
To transform the World Bank and IMF, at least two things are required. First we need a complete revolution in their governance. They remain dominated by rich nations. Africa has actually seen its voting share decline despite reforms claiming to create greater balance between rich and poor countries. Civil society must also be included more systematically and meaningfully in decision-making to ensure programs are accountable and reflect the needs of the poor and vulnerable.
Second we need to see a public break with the broken economic model of neoliberalism, and a recognition that it is has failed. The IMF has conceded that neoliberalism has driven growing inequality. Now there needs to be a fundamental and irrevocable break with this failed economic model.
The first step towards this break would be ensuring any lending by the IMF or World Bank that requires policy changes must be subject to gender and economic inequality impact assessments both before implementation and after.
Breaking with this failed economic model will mean an immediate end to IMF and World Bank policies and programs that drive inequality. Promotion of damaging austerity policies must stop. Workers rights and collective bargaining systems must be respected not eroded. Promotion of private education and health care must end, and free universal public services supported.
End the undermining of women’s rights and the promotion of patriarchy. End support for land grabbing and large-scale infrastructure that harms the poorest communities and the environment. End support for fossil fuels that are destroying our planet. End the insistence on risky and discredited public private partnerships.
Stop supporting tax breaks and tax dodging and support and an end to tax havens and promote progressive taxation where corporations and the ultra-rich pay their fair share.
This will mobilize resources for universal social protection and public investments for a just transition to an environmentally and economically sustainable economy. A pay raise for working people and productive public investments would foster economic growth and reduce inequality, and support women’s rights. Every single program of the World Bank or the IMF must demonstrate in advance how it will reduce inequality.
We believe it is possible to have a society where everyone matters. Where nobody is rich or powerful enough to be immune from the rules. Powerful elites and corporations can no longer be allowed to rig the system in their favour. To achieve this we will loudly challenge the concentration of power in the hands of an elite few, and to demand people-driven solutions from the World Bank and IMF that will really #fightinequality.
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* International Bar Association: States’ duty to tackle tax evasion and mobilise resources for human rights: http://bit.ly/2j3AGsT
* Transparency International: Time to clean up Offshore Financial Tax Havens: http://bit.ly/2zfXn6R http://bit.ly/2xQGdvc http://bit.ly/2hB1faX
* Global Financial Integrity: Tax Abuses and Corruption by Companies and the Global Elite: http://bit.ly/2yxxFv7
* ILO, UN Women, Unicef - Options to expand social investments in 187 countries: http://bit.ly/2fgU07C http://bit.ly/2xhH4oh
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