According to the latest calculations of Oxfam international, 62 individuals currently have wealth worth half of the world’s population. This calculation came up as a result of the growing concerns over the widening gap between the rich and the poor.
Oxfam drew its study from the Forbes annual list of billionaires and Credit Suisse’s Global Wealth Databook. It revealed this in an annual report released ahead of the World Economic Forum in the Swiss city of Davos, a yearly gathering of political and financial leaders.
In its report, Oxfam said the growing inequality means that the world’s wealthiest 62 people own as much as the poorest half of the planet’s population – some 3.6 billion people.
“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 said.
Oxfam reported that while the wealthiest are said to have seen their net worth soar over the five years ending in 2015, the average annual income of the poorest 10% of people in the world rose by less than $3 each year in almost a quarter of a century with Their daily income also rising by less than a single cent every year.
Oxfam drew the urgent need for actions to be taken to tackle the “inequality crisis” and called on world leaders – including Prime Minister David Cameron – to take action to crack down on tax-dodging by the rich, which denies governments in the developing world billions of pounds a year which could be used on health, education and anti-poverty measures.
In a new report highlighting the increasing gap between rich and poor, the international aid and development charity said “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 Monetary Fund also warned the gap between rich and poor in advanced economies was now at its highest level in decades, making widening income inequality the “defining challenge of our time” and suggesting “the benefits do not trickle down”
Further in its findings, Oxfam revealed that at the work place, the widening gap between the average worker and those at the top has increased. It also said that women made up the majority of the world’s low-paid workers and are concentrated in the most precarious jobs.
Giving reasons for the underlying huge differences, Oxam said it is as a result of the increasing return to capital versus labour.
“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.”
Relating the issue to the growing poverty rate in Africa, Oxfam said:
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.”
In its recommendation on what must be done, Oxfam said that policy makers had a lot to do to end the economy for the 1% and start building a human economy that benefits everyone‚” It further recommended the following:
- Pay workers a living wage and close the gap with executive rewards‚ with transparency on pay ratios.
- End the era of tax havens. The growing problem of tax avoidance and use of tax havens was a prime example of how the economic system was “rigged” in the rich’s favour which must be stopped.
- 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.
- Ensue 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
Meanwhile, the three richest men in the world – software mogul Bill Gates, Mexican telecom magnate Carlos Slim Helu and investor WarrenBuffett – have a combined net worth of $230 billion, according to Forbes.
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