Inequality Gap Widens: World’s Wealthiest 1% Took 82% of All New Wealth in 2017

Every two days a new billionaire was created in 2017 and recently, Oxfam stated,  that just 42 individuals hold as much wealth as Earth’s poorest 3.7 billion people.

(The AEGIS Alliance) – It may be named the “Year of the Billionaire.”

During 2017, every two days a new billionaire was created, while 82% of all wealth gained went to the top 1% of the Earth’s wealthiest while 0% —pretty much nothing—went to the poorest half of Earth’s population.

This troubling data is included in Oxfam’s most recent reports about global inequality—with the title Reward Work, Not Wealth (pdf file)—which was released on Monday. Additionally to the above, the report reveals how there was a skyrocketing wealth growth among the already very wealthy coupled with wages that are stagnant and a persistence of poverty among the lower economic structure of society means that only 42 individuals own as much wealth as the 3.7 billion poorest peoples on Earth.

“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system,” Winnie Byanyima, Oxfam’s executive director of Oxfam International. “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.”

Among the key findings in the report:

• Billionaire wealth has gone up by a yearly average of 13 percent since the year 2010 – this is six times more quickly than ordinary workers wages, which have only rose up by an annual average of about 2 percent. The number of billionaires had risen at a never before seen rate of one every couple of days between the times of March 2016 and March 2017.
• It only takes four days for a CEO from one of the world’s top five fashion brands to make what a Bangladeshi garment worker will earn in their lifetime. In the United States, it takes not much more than one working day for a CEO to make what an ordinary employee earns in one year.
• It’d cost $2.2 billion per year to increase wages of all 2.5 million Vietnamese garment workers to a livable wage. This is around one third of the amount paid out to rich shareholders by the top five companies in the garment sector during 2016.
• Dangerous, poorly paid work for the many is supporting extreme wealth for the very few. Women are shown to be in the worst employment, with almost all the super-rich, nine out of ten, being men.

This reporting came just as the planet’s political and economic elite are set to open the World Economic Forum, held once every year in Davos, Switzerland. And why the planet’s elite argue the summit’s focus is addressing the Earth’s most pressing issues, Oxfam finds that the amount of new wealth which went to the globe’s top 1% in 2017 was roughly $762 billion—a figure big enough, the group points out, to end extreme global poverty about seven times over.

What the report is ultimately exposing, Mark Goldring, Oxfam GB chief executive, stated to the Guardian, is a “system that is failing the millions of hardworking people on poverty wages who make our clothes and grow our food.”

“For work to be a genuine route out of poverty we need to ensure that ordinary workers receive a living wage and can insist on decent conditions, and that women are not discriminated against,” he added. “If that means less for the already wealthy then that is a price that we—and they—should be willing to pay.”

Not just lamenting and cataloging the metrics of inequality, the recent report also puts forth an amount of policy solutions which should be embraced by governments and people around the globe in order to reduce levels of inequality and for lifting billions of people out of poverty extremes. Included is:

• Limiting returns to shareholders and top executives, and ensuring all employees receive minimum “living” wages that’d enable them to have a more decent quality of life. An example, in Nigeria, the legal minimum wage would have to be tripled for ensuring decent living standards.
• Eliminating the gender pay gap and protecting the rights of female workers. At the current rate of change, it’d take 217 years to close this gap in pay and employment opportunities between men and women.
• Ensuring the wealthy are paying their fair share of taxes through higher taxing and a cracking down on tax avoidance, along with increasing spending on public services such as education and healthcare. Oxfam estimates a worldwide tax of 1.5 percent on billionaires’ earnings could pay for every child to attend school.

Although Oxfam has been calculating global inequality on a yearly basis for over a decade, this anti-poverty group makes note that the 2017 report is using new data from Credit Suisse and a separate type of model. Specifically, Oxfam notes, the fact that the globe’s 42 richest billionaires hold as much wealth as the poorest bottom half “cannot be compared to figures from previous years – including the 2016/17 statistic that eight men owned the same wealth as half the world – because it is based on an updated and expanded data set published by Credit Suisse in November 2017.

When Oxfam recalculated last year’s figures using the latest data we found that 61 people owned the same wealth as half the world in 2016 – and not eight.”

Kyle James Lee – The AEGIS Alliance – This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.