Inequality gap: Growing gulf between rich and poor leaves 42 people with same wealth as world's 3.7bn worst off

Billionaire wealth rose by an average of 13 per cent each year between 2006 and 2015 - six times faster than wages of average workers

Josie Co
Business Editor
Monday 22 January 2018 08:26
Inequality gap: Oxfam study shows the growing gulf between global rich and poor

More than 80 per cent of the all the wealth generated globally last year flowed into the coffers of the richest one per cent of the population, a new Oxfam report has revealed.

The research, published on Monday, also shows that the 3.7 billion individuals who make up the poorest half of the global population saw their wealth flatline in 2017 – something that the group of charities describes as “unacceptable and unsustainable”.

“Something is very wrong with a global economy that allows the 1 per cent to enjoy the lion’s share of increases in wealth while the poorest half of humanity miss out,” said Mark Goldring, chief executive of Oxfam in the UK.

“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,” he added.

Oxfam is calling for “rethink of legal and business models that prioritise shareholder returns over broader social impact” and said that the new figures underscore “how the excessive corporate influence on policy-making, erosion of workers’ rights and relentless drive to minimise costs in order to maximise returns to investors all contribute to a widening gap between the super-rich and the rest”.

Billionaire wealth rose by an average of 13 per cent annually between 2006 and 2015, which was six times faster than wages of average workers, according to Oxfam.

The group also said that it now takes just four days for the chief executive of one of the world’s five largest fashion retailers to earn as much as a Bangladeshi garment worker will earn in his or her whole lifetime.

Oxfam particularly raised concerns about the pay of women, saying that they consistently earn less than their male counterparts and often do the least secure forms of work.

At current rates of change, the group projects that it will take 217 years to close the global gap in pay and employment opportunities between women and men around the world.

“The world has made huge strides forward in ending poverty but progress could be even faster if we did more to break down the barriers that are holding back the world’s poorest people,” Mr Goldring said.

“For work to be a genuine route out of poverty we need to ensure that ordinary workers receive a living wage and can insist on decent conditions, and that women are not discriminated against. If that means less for the already wealthy then that is a price that we – and they – should be willing to pay,” he added.

Referencing data compiled by Swiss bank Credit Suisse, Oxfam said that 42 people now own the same wealth as the 3.7 billion who make up the poorest 50 per cent of individuals. As recently as 2009, the figure was 380.

Despite the fact that inequality appears to be getting worse, Oxfam also on Monday said that a survey of 70,000 people across the UK and nine other countries had recently found that nearly two-thirds of people say they want their government to urgently address the income gap.

In the UK, the Chartered Institute of Personnel and Development and the High Pay Centre – an independent non-party think tank established to monitor pay at the top of the income distribution – published a report last August showing that the average chief executive of a FTSE 100 company earned £4.5m in the year to the end of March.

Based on those figures, it would take an average UK full-time worker 160 years to earn what an average FTSE 100 CEO can rake in during one year.

And data at the end of December compiled by Bloomberg showed that the richest people on the planet added $1 trillion to their collective wealth in 2017 – more than four times the previous year’s gains – thanks to a surge in stock prices.

As of Friday, Amazon boss Jeff Bezos topped Bloomberg’s billionaire ranking with an estimated total net worth of $109bn, followed by Microsoft co-founder Bill Gates and veteran financier Warren Buffett at $94bn and $91.7bn respectively.

The Oxfam research comes on the eve of the start of the World Economic Forum in Davos – an annual gathering of the world’s political and business elite in Switzerland. Wealth inequality regularly features as a prominent agenda item at the forum.

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