Thursday, February 29, 2024

An economy for the world’s richest


Share post:

THE GLOBAL INEQUALITY CRISIS is reaching new extremes. The richest one per cent now have 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. A global network of tax havens further enables the richest individuals to hide US$7.6 trillion. The fight against poverty will not be won until the inequality crisis is tackled.

The gap between rich and poor is reaching new extremes. Credit Suisse recently revealed that the richest one per cent have now accumulated more wealth than the rest of the world put together.

Meanwhile, 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.

Oxfam has calculated that: 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 per cent in the five years since 2010 – that’s an increase of more than half a trillion dollars (US$542 billion), to US$1.76 trillion.

Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 41 per cent. Since the turn of the century, the poorest half of the world’s population has received just one per cent of the total increase in global wealth, while half of that increase has gone to the top one per cent.

The average annual income of the poorest ten per cent of people in the world has risen by less than US$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.

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 organisation 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 benefitted more than the rich from economic growth.

The global economy has been growing, but as incomes and wealth have become detached from productivity and real added value in societies, people who work hard but who are not in positions of economic and political power have lost out.

The share of income going to labour compared with capital is in decline, the gap between wages and productivity is growing and income inequality is slowing overall growth, further hurting the poorest people most and preventing millions of people escaping poverty.

What is needed is a multi-pronged strategy to rebalance power within global and national economies, empowering people who are currently excluded and keeping the influence of the rich and powerful in check.

This is necessary for economies to work better in the interests of the majority and in particular in the interest of the poorest people, who have the most to gain from a fairer distribution of income and wealth.

Governments in particular must work for citizens, representing the will of the people rather than the interests of big business, and must tackle extreme inequality.

This goes hand in hand with effective governance. The public interest should be the guiding principle of all global agreements and national policies and strategies. To achieve this, Oxfam makes the following recommentations:

1. Pay workers a living wage and close thee gap with executive rewards: corporations are earning record profits worldwide and executive rewards are skyrocketing, while too many people are without a living wage and decent working conditions.

Specific commitments must include increasing minimum wages towards living wages, transparency on pay ratios, and protection of worker’s rights to unionise and strike.

2. Promote women’s economic equality and women’s rights: Economic policy must tackle economic inequality and gender discrimination together.

Specific commitments must include compensation for unpaid care, an end to the gender pay gap, equal inheritance and land rights for women, and data collection to assess how women and girls are affected by economic policy.

3. Keep the influence of powerful elites in check: Work hard to ensure that policy making processes become less prone to capture by vested interests.

Specific commitments must include mandatory public lobby registries and stronger rules on conflicts of interest, ensuring that good quality information on administrative and budget processes are made public.

4. Change the global system for research and development and the pricing of medicines so that everyone has access to appropriate medicines.

Specific commitments must include a new global research and development treaty, increased investment in medicines, including in affordable generics, and excluding intellectual property rules from trade agreements.

5. Share the tax burden fairly to level the playing field: Too much wealth is concentrated in the hands of the few.

Specific commitments must include shifting the tax burden away from labour and consumption and towards wealth, capital and income from these assets, transparency on tax incentives, and national wealth taxes.

6. Using progressive public spending to tackle inequality: Prioritise policies, practise and spending that increase financing for free public health and education to fight poverty and inequality at the national level.

This information was produced by Oxfam, and international aid and development charity.


Please enter your comment!
Please enter your name here

Related articles

Police investigating stabbing death

One man is dead and another assisting police with investigations after a stabbing incident at Goose Bar located...

Barbados’ caution

Barbados is on board with the effort to integrate environmental and trade policies, but Government is wary about...

BWA repairing burst main at Baltic, St Peter

Update: Crews from the Barbados Water Authority have completed emergency repairs on mains at President Kennedy Drive, St Michael,...

Welfare offers landlords three months’ rent upfront

The People Empowerment and Elder Affairs will pay three months’ upfront in an attempt to facilitate landlords renting...