Richest 1 per cent bagged 82 per cent of wealth created last year – poorest half of humanity got nothing, says Oxfam
Eighty-two per cent 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 Oxfam 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 per cent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 per cent. The number of billionaires rose at an unprecedented rate of one every two days between March 2016 and March 2017.
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 minimise costs in order to maximise 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 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.
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.
- 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 increase spending on public services such as healthcare and education. Oxfam estimates a global tax of 1.5 percent on billionaires’ wealth could pay for every child to go to school.
In Hong Kong, the Gini coefficient has risen to 0.539 according to the HKSAR government’s statistics, indicating a widening of the gap between rich and poor. In comparison to other developed economies (e.g. the U.S. at 0.41, the U.K. at 0.35, and Canada at 0.32), inequality in Hong Kong is particularly severe.
‘The HKSAR Government must increase public spending and create a human economy such that everyone – not just the fortunate few – can benefit. Compared to OECD countries (e.g. South Korea, Japan, the U.K., Australia, Canada and New Zealand), Hong Kong fares poorly in terms of its expenditure on basic services,’ said Trini Leung, Director General at Oxfam Hong Kong (OHK).
She added that the government should adopt a comprehensive approach in eradicating inequality and poverty in Hong Kong, which should include the increased supply of affordable housing, enhance the protection of the elderly through a retirement scheme, empower women in the job market, and ensure that all marginalised groups, such as ethnic minorities, have an equal chance of escaping poverty.
OHK also urges the government to adopt the concept of a ‘living wage’ – a wage level that enable workers and their families to support a basic living standard – to supplement the inefficiency of the statutory minimum wage, which has been in effect for years but still does not guarantee a decent standard of living for workers.
To address growing inequality in Hong Kong, OHK also urges the government to review the current tax system, and use the ‘ability to pay’ principle so the rich would pay their fair share of taxes. It should better redistribute resources and adjust highest-earning companies’ corporate profits tax rate to realise the principle of tax justice. The government and HKEX should also help increase the tax transparency of companies and put any end to corporate tax avoidance.
‘Reward Work, Not Wealth’ and a methodology document that outlines how Oxfamarrived at the key statistics in the report, is available for download:
Oxfam’s calculations are based on global wealth distribution data provided by the Credit Suisse Global Wealth Data book published in November 2017. The wealth of billionaires was calculated using Forbes' billionaires list last published in March 2017.
Barbara's story tells how inequality hurts
(Photo: Abbie Trayler-Smith/Oxfam)
Barbara is from Zambia – one of the top ten fastest growing economies in the world. But like 64% of the country, Barbara lives in extreme poverty. She lost her husband to cancer, and had to sell livestock to pay for his treatment. She has to walk four hours every day to collect water for her crops, and her son doesn’t go to school because she can’t afford the registration fees. Countries like Zambia are losing vital tax revenue which could pay for better health centres, schools and roads because multinational companies can hide vast profits in the secret global network of tax havens.