11) OXFAM WARNS OF “EXPLOSION IN GLOBAL INEQUALITY”

PV Vancouver Bureau

            The combined wealth of the world’s richest 1 percent will overtake that of the other 99 percent next year unless the trend of rising inequality is checked. That was the message delivered by the Oxfam International agency to the World Economic Forum held Jan. 21-24 in Davos, Switzerland.

            This annual meeting attracts the global economic elite, costing $20,000 to register, and $600-700 per night for a hotel room. Ironically, Davos 2015's co-chair was Oxfam executive director Winnie Byanyima, who  warned that the “explosion in inequality is holding back the fight against global poverty” at a time when 1 in 9 people do not have enough to eat and more than a billion people still live on less than $1.25‑a‑day.

Wealth: Having It All and Wanting More, a research paper published by Oxfam, shows that the richest 1 percent have seen their share of global wealth increase from 44 percent in 2009 to 48 percent in 2014. Members of this global elite had an average wealth of $2.7 million per adult in 2014.

Of the remaining 52 percent of global wealth, almost all (46 percent) is owned by the rest of the richest fifth of the world’s population.

The other 80 percent share just 5.5 percent and had an average wealth of $3,851 per adult B that’s 1/700th of the average wealth of the 1 percent.

Byanyima asked: “Do we really want to live in a world where the one percent own more than the rest of us combined? The scale of global inequality is quite simply staggering and despite the issues shooting up the global agenda, the gap between the richest and the rest is widening fast...It is time our leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world. 

“Business as usual for the elite isn’t a cost free option - failure to tackle inequality will set the fight against poverty back decades. The poor are hurt twice by rising inequality - they get a smaller share of the economic pie and because extreme inequality hurts growth, there is less pie to be shared around.”

It appears that major corporate interests are deeply worried that the “income gap” could spark unrest on a bigger scale than the “Occupy” movement. While most capitalist governments are increasing spending on the repressive elements of the state apparatus - police, security and surveillance, prisons, the military - there are also calls to mitigate the impact of neoliberal policies in hopes of averting political turmoil.

Lady Lynn Forester de Rothschild, Chief Executive Officer of E.L. Rothschild and chair of the “Coalition for Inclusive Capitalism”, called on business leaders to play their part in tackling extreme inequality.

She said: “Oxfam’s report is just the latest evidence that inequality has reached shocking extremes, and continues to grow. It is time for the global leaders of modern capitalism, in addition to our politicians, to work to change the system to make it more inclusive, more equitable and more sustainable. Extreme inequality isn't just a moral wrong. It undermines economic growth and it threatens the private sector's bottom line. All those gathering at Davos who want a stable and prosperous world should make tackling inequality a top priority."

Oxfam International is calling on governments to adopt a seven point plan to tackle inequality:

- Clamp down on tax dodging by corporations and rich individuals.

- Invest in universal, free public services such as health and education.

- Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth.

- Introduce minimum wages and move towards a living wage for all workers.

- Introduce equal pay legislation and promote economic policies to give women a fair deal.

- Ensure adequate safety‑nets for the poorest, including a minimum income guarantee.

- Agree a global goal to tackle inequality.

Here are some statistical highlights from the Oxfam report, which follows the organization=s recent global Even It Up campaign. The numbers are derived largely from data published by Credit Suisse, and from Forbes magazine’s annual rankings of global billionaires.

* In 2014, the richest 1% of people in the world owned 48% of global wealth, leaving just 52% to be shared between the other 99% of adults on the planet.

* Almost all of that 52% is owned by those included in the richest 20%, leaving just 5.5% for the remaining 80% of people in the world.

* If this trend continues, the top 1% will have more wealth than the remaining 99% of people in just two years,, with the wealth share of the top 1% exceeding 50% by 2016.

* The billionaires on the Forbes list have seen their wealth accumulate even faster over this period. In 2010, the richest 80 people in the world had a net wealth of $1.3 trillion. By 2014, the top 80 had a collective wealth of $1.9 trillion; an increase of $600 billion in just 4 years, or 50% in nominal terms.

* Between 2002 and 2010 the total wealth of the poorest half of the world in current US$ had been increasing more or less at the same rate as that of billionaires; however since 2010, it has been decreasing.

* The wealth of the richest 80 individuals matches the total owned by the bottom 50% (3.5 billion people) of the global population.

* In 2010, it took 388 billionaires to equal the wealth of the bottom half of the world?s population; by 2014, the figure had fallen to just 80 billionaires.

* In 2014, 1,645 people were listed by Forbes as billionaires. Almost 30% of them (492 people) are citizens of the USA.

* Over one‑third of billionaires started from a position of wealth, with 34% of them having inherited some or all of their riches.

* Among this group, 85% are aged over 50 years and 90% are male.

* A few important economic sectors have contributed to the accumulation of wealth of these billionaires. In March 2014, 20% of them (321) were listed as having interests in the financial and insurance sectors.

* Since March 2013, there have been 37 new billionaires from these sectors, and six have dropped off the list. The accumulated wealth of billionaires from these sectors has increased from $1.01 trillion to $1.16 trillion in a single year; a growth of 15%.

* Between 2013 and 2014 billionaires listed as having interests and activities in the pharmaceutical and healthcare sectors saw the biggest increase in their collective wealth. Twenty‑nine individuals joined the ranks of the billionaires in this sector between March 2013 and March 2014 (five dropped off the list), increasing the total number from 66 to 90, or over 5% of the total billionaires on the Forbes list. The collective wealth of billionaires with interests in this sector rose from $170 billion to $250 billion, a 47% increase.

* The biggest companies from the finance, insurance, pharmaceutical and healthcare sectors achieve extremely high profits to compensate their owners and investors. These resources can also be used for economic and political influence, through the direct lobbying of governments.

* During 2013, the finance sector spent more than $400 million on lobbying in the USA alone, or 12% of the total amount spent by all sectors on lobbying in the US in that year. During the election cycle of 2012, $571 million was spent by companies from this sector on campaign contributions.

* The financial sector is found by the Centre for Responsive Politics to be the largest source of campaign contributions to federal candidates and parties.

* Billionaires from the US make up approximately half of the total billionaires on the Forbes list with interests in the financial sector.

* The number of US finance billionaires increased from 141 to 150, and their collective wealth from $535 billion to $629 billion, an increase of $94 billion, or 17% in a single year.

* In the EU, an estimated $150 million is spent by financial sector lobbyists towards EU institutions every year. Between March 2013 and March 2014, the number of billionaires in the EU with interests in the financial sector rose from 31 to 39, increasing their collective wealth by $34 billion, to $128 billion.

* During 2013, the pharmaceutical and healthcare sectors spent more than $487 million on lobbying in the USA alone. This represented 15% of $3.2 billion total lobbying expenditures in 2013.  During the election cycle of 2012, $260 million was spent by this sector on campaign contributions.

* At least $50 million is spent by the pharmaceutical and healthcare industry on lobbying each year in the EU, where 20 of the 90 billionaires who made their money from pharmaceuticals and healthcare reside, and who together increased their wealth in the last year by $28 billion.

* Meanwhile, a health crisis has erupted in West Africa. The Ebola virus has been threatening the lives and livelihoods of millions of people in Guinea, Sierra Leone and Liberia in 2014. 

* Three major pharmaceutical companies have collectively donated more than $3 million in cash and medical products for the Ebola relief effort. But these three companies together spent more than $18 million on lobbying in the US during 2013. 

* The World Bank estimates that the economic cost of the Ebola crisis to Guinea, Liberia and Sierra Leone was $356 million in output forgone in 2014, and a further $815 million in 2015 if the epidemic is slow to be contained.

* A single pharma‑related billionaire could pay this $1.17 billion cost three times over from his new wealth. Stefano Pessina increased his net worth from $6.4 billion in 2013 to $10.4 billion in 2014, the largest single increase among the billionaires listed with pharmaceutical and healthcare interests.

(The above article is from the February 1-14, 2015 issue of People's Voice, Canada's leading socialist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)