This is Eve. We just received another grim update from Oxfam about the ever-widening gap between the wealthy upper class and the poor. As famous short seller David Einhorn used to say, “No matter how bad you think it is, it’s always worse.”
by Jomo Kwame Sundaram and City Maysara Zainulin. Originally Jomo’s website
Oxfam It is predicted that the world’s first trillionaire will be created within 10 years, poverty will be eradicated within 229 years, the wealth of the world’s five richest people will have more than doubled since 2020, and 4.8 billion people will fall into poverty.
The 2024 Oxfam report Inequality Corporation“We are witnessing the start of a divisive decade as billionaires’ fortunes soar while billions deal with pandemics, inflation and war,” he warned.
“This inequality is not accidental. The billionaire class is making corporations more wealthy at the expense of everyone else.” attention Amitabh Behar of Oxfam International.
Reinforcing inequality
To summarise the report: Tanupriya Singh He noted that as the super-rich got even richer, the gap between rich and poor, and between rich and developing countries, was widening again for the first time in the 21st century.
The Global North holds 69% of the world’s wealth and 74% of its billionaires’ wealth. Oxfam points out that modern wealth concentration dates back to colonialism and imperialism.
Since then, “neo-colonial relations with countries in the Global South have persisted, perpetuating economic imbalances and manipulating economic rules to favor wealthy countries.”
The report notes that “global southern economies perpetuate a colonial-era ‘extractive’ model of exporting commodities, from copper to coffee, for use by monopoly industries in the northern hemisphere.”
Rising inequalities within wealthy countries are worsening conditions for marginalized communities, giving rise to divisive ethnic populism and virulent identity politics.
70% of the world’s largest companies have billionaires as major shareholders or chief executive officers, and these companies are worth more than $10 trillion, more than the combined product of Latin America and Africa.
The incomes of the wealthy have grown much faster than most others, which is why the top 1% of shareholders own 43% of the world’s financial assets, half of which is in Asia, 48% in the Middle East, and 47% in Europe.
Between mid-2022 and mid-2023, the world’s 148 largest companies generated $1.8 trillion in profits. Meanwhile, 82% of the profits of the 96 largest companies were returned to shareholders through stock buybacks and dividends.
Only 0.4% of the world’s largest companies have agreed to pay a minimum wage to employees who contribute to their profits. Not surprisingly, the poorest half of the world will earn just 8.5% of global income in 2022.
About 800 million workers have not kept up with inflation, costing them $1.5 trillion in 2022 and 2023, an average of 25 days of lost wages per worker.
In addition to income inequality, Oxfam Report 2024 He noted that workers face increasing challenges due to stressful working environments.
The income gap between the ultra-rich and working people is so large that it would take a female health care worker or social worker 1,200 years to earn the annual salary of a Fortune 100 CEO.
In addition to women’s low wages, Unpaid care work It subsidizes the global economy to the tune of at least $10.8 trillion a year, three times the amount Oxfam calls the “high-tech industry.”
Monopoly power
Oxfam points out that global inequality is exacerbated by monopoly power – the ability of a small number of companies to influence and even control national economies, governments, laws and policies for their own profit.
According to a study by the International Monetary Fund, monopoly power accounts for 76% of the decline in labor’s share of income in U.S. manufacturing.
“Monopolies stifle innovation and oppress workers and small businesses. The world has not forgotten how pharmaceutical monopolies deprived millions of people of COVID-19 vaccines, created racist vaccine discrimination, and created a new billionaire’s club,” Behar said.
Between 1995 and 2015, 60 pharmaceutical companies merged to create 10 large pharmaceutical companies. Innovation is generally subsidized with public funds, but pharmaceutical monopolies drive up prices with impunity.
Oxfam noted that Ambani’s wealth in India comes from monopolies in many sectors made possible by the Modi government, and the recent lavish wedding of Ambani’s son was a global display of extreme wealth concentrations.
of Oxfam Report 2021 “It would take an unskilled worker 10,000 years to earn what Ambani has made in one hour during the pandemic, and three years to earn what he has made in one second,” he estimated.
Naturally, Oxfam Report 2023 “In India, the richest 1% own about 40% of the country’s wealth, while more than 200 million people still live in poverty,” he noted.
Financial Subordination
Corporations have increased their value and deprived Americans of vital resources through a “sustained and highly effective tax war.”
As many companies increased their profits, the average corporate tax rate fell from 23% to 17% between 1975 and 2019. Meanwhile, about $1 trillion flowed into tax havens in 2022 alone.
Of course, falling corporate tax rates are also the result of a “wider neoliberal agenda driven by corporations and their wealthy owners, often in partnership with countries in the global north and international institutions such as the World Bank.”
Meanwhile, pressures for fiscal consolidation are growing as government tax revenues have been in relative decline for decades, exacerbated by high government debts due to corporate tax evasion and avoidance.
Underfunded public services, especially in health and social security, are having negative effects on consumers and employees. Rising interest rates are exacerbating the debt crisis in developing countries.
As governments face financial constraints and are unable to maintain public services, privatization advocates are gaining influence and using various means to tighten their control over public resources.
Private companies profit from discounted sales of public assets, public-private partnerships, and government contracts to implement public policies and programs.
“Leading development agencies and organizations have found common ground with investors by adopting approaches that de-risk these arrangements by shifting financial risks from the private to the public sector,” the report said.
Access to basic public services should be universal. Private profit-makers deny access to marginalized communities and exacerbate inequalities.
