SUNDAY TIMES - 62 people own as much wealth as half the world's population – Oxfam
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Sunday Times Business By TMG Digital, 2016-01-18

62 people own as much wealth as half the world's population – Oxfam

Bill Gates, the world’s richest man, plays table tennis during a Berkshire Hathaway meeting weekend in May
Image: REUTERS

Just 62 individuals had the same wealth as 3.6 billion people in 2015‚ according to Oxfam calculations.

In 2010‚ this figure was 388 individuals.

“The wealth of the richest 62 people has risen by 44% in the five years since 2010 – that's an increase of more than half a trillion dollars ($542 billion)‚ to $1.76 trillion‚ the international aid and development charity says in a new report highlighting an increasing gap between rich and poor.

“Meanwhile‚ the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 41%‚” Oxfam says.

“Since the turn of the century‚ the poorest half of the world’s population has received just 1% of the total increase in global wealth‚ while half of that increase has gone to the top 1%.”

Oxfam says the average annual income of the poorest 10% of people in the world has risen by less than $3 each year in almost a quarter of a century. Their daily income has risen by less than a single cent every year.

At workplaces‚ the gap between the average worker and those at the top has been rapidly widening‚ according to the report. “Oxfam’s experience with women workers around the world‚ from Myanmar to Morocco‚ is that they are barely scraping by on poverty wages. Women make up the majority of the world’s low-paid workers and are concentrated in the most precarious jobs.

Meanwhile‚ chief executive salaries have rocketed. CEOs at the top US firms have seen their salaries increase by more than half (by 54.3%) since 2009‚ while ordinary wages have barely moved. The CEO of India’s top information technology firm makes 416 times the salary of a typical employee there. Women hold just 24 of the CEO positions at Fortune 500 companies.”

The financial sector has grown most rapidly in recent decades‚ and now accounts for one in five billionaires‚ says Oxfam.

One of the key trends underlying this huge concentration of wealth and incomes is the increasing return to capital versus labour‚ the agency says.

“In almost all rich countries and in most developing countries‚ the share of national income going to workers has been falling. This means workers are capturing less and less of the gains from growth.

“In contrast‚ the owners of capital have seen their capital consistently grow - through interest payments‚ dividends‚ or retained profits - faster than the rate the economy has been growing. Tax avoidance by the owners of capital‚ and governments reducing taxes on capital gains have further added to these returns.”

This holds true in Africa too‚ according to Oxfam.

Almost a third (30%) of rich Africans’ wealth – a total of $500 billion – is held offshore in tax havens. It is estimated that this costs African countries $14 billion a year in lost tax revenues. “This is enough money to pay for healthcare that could save the lives of four (4) million children and employ enough teachers to get every African child into school.”

Oxfam analysed 200 companies‚ including the world’s biggest and the World Economic Forum’s strategic partners‚ and has found that nine (9) out of 10 companies analysed have a presence in at least one tax haven. In 2014‚ corporate investment in these tax havens was almost four times bigger than it was in 2001.

“As taxes go unpaid due to widespread avoidance‚ government budgets feel the pinch‚ which in turn leads to cuts in vital public services. It also means governments increasingly rely on indirect taxation‚ like VAT‚ which falls disproportionately on the poorest people. Tax avoidance is a problem that is rapidly getting worse.”

RECOMMENDATIONS

“From living wages to better regulation of the activities of the financial sector‚ there is plenty that policy makers can do to end the economy for the 1% and start building a human economy that benefits everyone‚” Oxfam says.

Its recommendations include:

  • Pay workers a living wage and close the gap with executive rewards‚ with transparency on pay ratios.
  • End the era of tax havens. - Promote women’s economic equality and women’s rights: by providing compensation for unpaid care; ending the gender pay gap; and promoting equal inheritance and land rights for women.
  • Ensuring that good-quality information on administrative and budget processes is made public; reforming the regulatory environment‚ particularly around transparency in government; and introducing measures to close “revolving doors” between big business and government.
  • Share the tax burden fairly to level the playing field.

See the full report here: http://ow.ly/XcPoD