A little more than 10 years since the 2008 financial crisis, the number of billionaires has doubled.
Oxfam briefing paper – January 2019 Our economy is broken, with hundreds of millions of people living in extreme poverty while huge rewards go to those at the very top.
The number of billionaires has doubled since the financial crisis and their fortunes grow by $2.5bn a day, yet the super-rich and corporations are paying lower rates of tax than they have in decades. The human costs – children without teachers, clinics without medicines – are huge.
Piecemeal private services punish poor people and privilege elites. Women suffer the most, and are left to fill the gaps in public services with many hours of unpaid care.
We need to transform our economies to deliver universal health, education and other public services. To make this possible, the richest people and corporations should pay their fair share of tax. This will drive a dramatic reduction in the gap between rich and poor and between women and men.
A new report from the charity, published ahead of the World Economic Forum in Davos, also found that billionaires around the world saw their combined fortunes grow by US$2.5 billion each day in 2018.
This compares to almost 50% of the world’s population who live on less than €4.90 per day.
The world’s richest man, Amazon chief executive officer Jeff Bezos, saw his fortune increase to US$112 billion last year, Oxfam said, pointing out that just 1 per cent of his wealth was the equivalent to the entire health budget of Ethiopia, a country of 105 million people.
“The way our economies are organised means wealth is increasingly and unfairly concentrated among a privileged few while millions of people are barely subsisting,” Matthew Spencer, Oxfam’s director of campaigns and policy, said in a statement released with the report.
“It doesn’t have to be this way – there is enough wealth in the world to provide everyone with a fair chance in life.”
What are the key points and suggestions from the report?
Significant investment into public services, such as universal healthcare and education, can help reduce poverty and inequality, and also reduce the growing gap between rich and poor, the report found.
Access to even the most basic education could positively affect millions of people — the report estimated that more than 170 million people could escape extreme poverty if all children graduated school with basic reading skills.
“Universal social protection and public services played a pivotal role in state- and nation-building in Western Europe,” it said. “Trying to target the poorest people often has the opposite effect, with many of those who should benefit being left out.”
Oxfam’s director of campaigns and policy, Matthew Spencer, said: “The massive fall in the number of people living in extreme poverty is one of the greatest achievements of the past quarter of a century but rising inequality is jeopardising further progress.
“The way our economies are organised means wealth is increasingly and unfairly concentrated among a privileged few while millions of people are barely subsisting. Women are dying for lack of decent maternity care and children are being denied an education that could be their route out of poverty. No one should be condemned to an earlier grave or a life of illiteracy simply because they were born poor.
“It doesn’t have to be this way – there is enough wealth in the world to provide everyone with a fair chance in life. Governments should act to ensure that taxes raised from wealth and businesses paying their fair share are used to fund free, good-quality public services that can save and transform people’s lives.”
The report said many governments were making inequality worse by failing to invest enough in public services. It noted that about 10,000 people per day die for lack of healthcare and there were 262 million children not in school, often because their parents were unable to afford the fees, uniforms or textbooks.
Taxes on the rich
Euronews spoke to Max Lawson, Oxfam’s head of inequality, who said “the entire global economy is benefitting those at the top.”
“The richest people in the world are paying lower rates of tax than they have in decades.”
In the UK, the poorest 10% are paying a higher proportion of their incomes in tax than the richest 10%, the report also noted.
In order to fund an increase in public services, Oxfam recommended placing tax increases on the world’s richest population.
A 0.5% tax increase on the world’s richest 1% could fund the schooling of every child currently out of education and could provide lifesaving healthcare for 3.3 million people.
To put that into a little more perspective, the world’s richest man, Amazon founder Jeff Bezos, could cover Ethiopia’s entire health budget with just 1% of his fortune.
But this proposed tax increase could prove difficult to implement while many continue to evade the laws in their countries.
The European Union has specifically passed new legislation to prevent tax dodging, but the recent release of the Paradise Papers and Panama Papers demonstrate there is still a long way to go.
Globally, “the super-rich are hiding [more than €6.5 trillion] from tax authorities and dodging an estimated [€175 billion] in annual tax revenues,” the report said.
Reduce gender inequality
Oxfam also noted a correlation between countries with a greater wealth gap and greater gender inequality, suggesting if you close one, you can close the other.
“Economically unequal countries are countries where women and men are more unequal too. Societies in which the gap between rich and poor is much lower are those in which women are treated more as equals,” the report said.
Women are the most affected by public service cuts, as they generally dominate the teaching and health professions around the world.
In Europe alone, public spending cuts after the financial crisis in areas such as maternity and paternity leave, and government-funded pre-schools, meant women bore the brunt of the effects.
However, Oxfam’s report found that the now-unpaid hours women spend on domestic tasks would actually be a huge moneymaker.
If a single company took over the hours women spend on looking after home and family, the company would have an annual turnover 43 times the turnover of Apple Inc.
The report was released ahead of the start of The World Economic Forum in Davos tomorrow (Tuesday), which is attended each year by the leaders in politics and business.