Image credit: Pixabay/Stevepb
Image credit: Pixabay/Stevepb
The world’s 26 richest people now own the same wealth as the poorest half of humanity. Oxfam warned that “out of control” inequality is stoking popular anger and threatening democracies.
“We are seeing rich people running away with wealth and poor people sinking in poverty,” Oxfam executive director Winnie Byanyima told AFP in an interview.
A new report from the charity was published ahead of the World Economic Forum in Davos – a week-long meeting of the global elite, with three of the 26 richest people set to attend.
The report found that billionaires around the world saw their combined fortunes grow by $2.5 billion (2.2 billion euros) each day in 2018, an annual increase of 12%, and urged governments to slap more taxes on the wealthy.
The world’s richest man, Amazon CEO Jeff Bezos, saw his fortune increase to $112 billion last year. Oxfam pointed out that just one percent of his wealth was the equivalent to the entire health budget of Ethiopia, a country of 105 million people.
“Oxfam is saying in this report with evidence that extreme inequality is out of control,” Byanyima said.
The 3.8 billion people at the bottom of the scale meanwhile saw their relative wealth decline by $500m each day, or 11% last year. Oxfam stressed that the growing gap between rich and poor was undermining the fight against poverty, damaging economies and fuelling public anger.
“Citizens are angry and frustrated,” Byanyima said. “They are seeing themselves working really hard, but they are seeing that […] the things that they expect, a good education for their children, health when they fall ill, social protection when they get older […] aren’t there for them.”
At the same time, she said, “they are seeing a few people running away with wealth and without paying their fair share.”
The numbers are stark. Between 1980 and 2016, the poorest half of humanity pocketed just 12 cents on each dollar of global income growth, compared with the 27 cents captured by the top one percent, the report found.
Oxfam warned that governments were exacerbating inequality by underfunding public services like healthcare and education at the same time as they consistently under-tax the wealthy.
Calls for hiking taxes on the wealthy have multiplied amid growing popular outrage in a number of countries over swelling inequality.
In the United States, new congresswoman Alexandria Ocasio-Cortez made headlines earlier this month by proposing to tax the ultra-rich up to 70%.
The self-described Democratic Socialist’s proposal came after President Donald Trump’s sweeping tax reforms cut the top income rate last year from 39.6% to 37%.
In Europe, the “yellow vest” movement that has been rocking France with anti-government protests since November. They that President Emmanuel Macron repeal controversial cuts to wealth taxes on high earners.
And in Britain, a populist campaign helped persuade a majority of voters to opt for quitting the European Union in the country’s 2016 referendum on Brexit.
“The super-rich and corporations are paying lower rates of tax than they have in decades,” the Oxfam report said, pointing out that “the human costs – children without teachers, clinics without medicines – are huge”.
Byanyima lamented that governments faced with growing public anger are taking dangerous shortcuts.
“Instead of solving the problem by fixing the economies, making them work for most people, (they) are finding distractions,” she said, pointing to scapegoating of immigrants and other outsiders for social ills.
“Inequality is undermining democracy,” she said, warning that “politics (have become) poisonous.”
The Oxfam report said “piecemeal private services punish poor people and privileged elites,” stressing that every day, some 10 000 people die due to lacking access to affordable healthcare.
The report, released as the world’s rich, famous and influential began arriving for the annual gathering at the luxury Swiss ski resort town, urged governments to “stop the race to the bottom” in taxing rich individuals and big corporations.
Oxfam found that asking the richest to pay just 0.5 percent extra tax on their wealth “could raise more money than it would cost to educate all 262 million children out of school and provide healthcare that would save the lives of 3.3 million people”.
Written by Nina Larson.