Bernie Sanders keeps hammering away relentlessly on the issue of wealth and income inequality. He has focused on the situation within the US but the same critique applies to the entire world. Now comes along a new report from the charity group Oxfam that shows that the situation keeps getting more and more outrageous.
Runaway inequality has created a world where 62 people own as much as the poorest half of the world’s population, according to an Oxfam report published today ahead of the annual gathering of the world’s financial and political elites in Davos. This number has fallen dramatically from 388 as recently as 2010 and 80 last year.
An Economy for the 1%, shows that the wealth of the poorest half of the world’s population – that’s 3.6 billion people – has fallen by a trillion dollars since 2010. This 41 per cent drop has occurred despite the global population increasing by around 400 million people during that period. Meanwhile the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. Just nine of the ’62’ are women.
Although world leaders have increasingly talked about the need to tackle inequality, the gap between the richest and the rest has widened dramatically in the past 12 months. Oxfam’s prediction – made ahead of last year’s Davos – that the 1% would soon own more than the rest of us by 2016, actually came true in 2015, a year early.
What was interesting was that the measures that Oxfam said needed to be done to reverse this trend are exactly what Sanders has been proposing.
Oxfam is calling for urgent action to tackle the inequality crisis and reverse the dramatic fall in wealth of the poorest half of the world. It is urging world leaders to adopt a three-pronged approach – cracking down on tax dodging, increased investment in public services and action to boost the income of the lowest paid. As a priority, it is calling for an end to the era of tax havens which has seen increasing use of offshore centres by rich individuals and companies to avoid paying their fair share to society. This has denied governments valuable resources needed to tackle poverty and inequality.
This graphic pretty much says it all.
Paradoxically, this report may spur the wealthy to try to get even richer because they are a very competitive and prestige-conscious group and the smaller the capacity of the vehicle that accommodates the wealthiest, the more they will want to make sure that they are on it. They don’t give a damn about the rest of the world. They only care about how they rank compared to their peers.
I am reminded of the time that laws were passed requiring that the compensation of corporate CEOs be made public. The idea was that they would be embarrassed at their outrageous salaries becoming known and this would put pressure to lower the gap between them and their workers. What happened instead was that CEOs started comparing their pay, not to their own workers, but to those of other CEOs, and demanding to their boards of directors that they be raised to match or exceed their competitors, leading to a salary race upwards.