We know that the rich is getting richer while the poor is getting poorer. We also know the world is unfair as far as wealth distribution is concerned. What we don’t know is how serious the problem has gotten year after year. At the start of 2015, Oxfam had warned that 1% of the world’s population would own more wealth than the other 99% by 2016.
In the same year (2015), Credit Suisse acknowledged the middle classes were squeezed at the expense of the very rich. In 2010, the world’s millionaires controlled only about US$69.2 trillion of world’s total wealth. Six years later in 2016, the number of millionaires jumped to 33 million, and they controlled US$116.6 trillion, or about 45.6% of US$255 trillion in household wealth globally.
What that meant was by 2016, a disturbing 0.7% of the world’s population were controlling 45.6% of the money on planet Earth. If you’re lost in the sea of figures, consider this mind-boggling fact – 62 richest billionaires actually owned US$116.6 trillion while 3.5 billion people had a net worth of less than US$10,000 each (or US$6.1 trillion in total) in 2016.
A year later in 2017, the gap between the super-rich and the poorest was far greater and more serious than previously thought, as revealed by Oxfam, an anti-poverty organization. From 62 richest billionaires just a year ago (2016), it had improved to 8 richest men who owned as much wealth as 3.6-billion people – that’s about half the people on planet Earth.
As the world’s elite prepared to mingle at the World Economic Forum in Davos, Switzerland, where about 2,500 leaders from politics, finance, business and science are expected to attend, Oxfam unleashed its latest bombshell. Apparently last year (2017), the world’s 1% richest grabbed 82% of global wealth created, while the poorest half saw no increase at all.
Oxfam also found the wealth of billionaires had increased by 13% a year on average in the decade from 2006 to 2015. Last year, billionaires would have seen an uptick of US$762 billion – enough to end extreme poverty seven times over. The main driver for a surge in wealth among those tycoons was the booming global stock markets.
Mark Goldring, chief executive of Oxfam, said the statistics signal “something is very wrong with the global economy.” He said – “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 hard-working people on poverty wages who make our clothes and grow our food.”
The report also reveals another problem – 9 out of 10 of the world’s 2,043 billionaires were men. Apparently women workers “consistently earn less than men” and often have the lowest paid, least secure jobs. Not only were the rich got richer, they also have gotten filthy rich due to tax evasion, the erosion of worker’s rights and cost-cutting.
The report found that chief executives of the top 5 global fashion brands made in just four days what garment workers in Bangladesh earn over a lifetime.Oxfam executive director Winnie Byanyima said – “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.”
This is yet another research or report which proves that globalization and capitalism aren’t working, at least not fairly. To fight rising inequality, Oxfam called on governments to limit the returns of shareholders and top executives, close the gender pay gap, crackdown on tax avoidance and increase spending on healthcare and education.
With just 42 people owning the same amount of wealth as the poorest 50%worldwide, one doesn’t need a rocket scientist to tell that something is terribly wrong with the system. The founder of Amazon, Jeff Bezos, for example, saw his wealth skyrocket by US$6 billion in the first 10 days of 2017 – leading him to become “the richest man of all time.”
However, it’s easier said than done about putting a stop to the widening and inequality gap between the rich and the poor. Take for example the sexy tax reform signed into law by President Donald Trump. While ordinary Americans get to save a couple of thousand dollars, the law, which included estate tax repeal would save billionaires – including President Donald Trump – tons of money.
Trump family alone would save US$564 million. White House economic advisor Gary Cohn who is loaded with US$266 million of stock and awards amassed during his years at Goldman Sachs, and Treasury Secretary Steve Mnuchin who held shares in CIT Group Inc. worth more than US$100 million, are benefitting directly from Donald Trump’s new tax reform.
– Finance Twitter