Today, just 62 people own the same wealth as half the planet. This shocking statistic made headlines around the globe when it was released a few weeks ago. And rightly so – the huge and growing gap between rich and poor has serious consequences for workers and their families everywhere.
In too many countries, the share of national income going to workers has been falling. While workers are capturing an ever smaller proportion of the benefits of growth, company shareholders and property owners have seen the value of their assets rise faster than the rate at which economies has been growing.
For example, the wealth of the richest 62 people has risen by more than half a trillion dollars since 2010 while the wealth of the bottom half fell by over a trillion dollars.
The gap between the income of the average worker and those at the top illustrates this trend. Many have seen their wages stagnate over the last few decades – the average income of the poorest 10 per cent of people in the world has risen by less than a single cent per year for the last 25 years.
Garment factory workers in Myanmar told Oxfam that, even with overtime, they could not afford housing, food and medicine. Meanwhile, chief executive salaries have rocketed. CEOs at the top US firms have seen their salaries increase by more than half since 2009, and in India the CEO of the country’s top information technology firm makes 416 times the salary of a typical employee there.
This level of inequality is not accidental. It is not the natural outcome of talent, hard work or healthy competition. Across the globe, wealthy companies and rich people are using their power and position to capture the lions’ share of the economic pie for themselves – aided and abetted by economic and policy changes including deregulation, privatisation, financial secrecy and globalisation.
The garment sector, where firms consistently use their dominant position to insist on poverty wages, provides a powerful illustration of the rigged economic system.
Between 2001 and 2011, wages for garment workers in most of the world’s 15 leading apparel exporting countries fell in real terms. Society’s acceptance of women being paid less was cited in Oxfam’s recent report, An Economy for the 1%, as a key factor in increasing profitability. And people are losing their lives as companies seek to maximise profits by avoiding necessary safety practices.
In April 2013, the world turned its attention to the plight of workers in garment factories in Bangladesh, when 1,134 workers were killed in the Rana Plaza factory collapse.
Despite all the attention and rhetoric, buyers’ short-term financial interests still dominate activities in this sector, and reports of inadequate fire and safety standards persist.
This one example encapsulates the potentially devastating consequences of extreme inequalities of wealth and power – but it does not stop there.
The impact on economic growth, the fight against poverty, social stability, human rights and the environment make extreme inequality one of the most pressing challenges we face today. This fact is now widely acknowledged – by President Obama, the Pope, Christine Lagarde of the IMF, and millions of others.
Taking on the vested interests – the companies and wealthy individuals who play the system for their own gain – is no easy matter.
That is why Oxfam is proud to be one of the founding members of a new global alliance to fight inequality alongside organisations such as Greenpeace, ActionAid and the International Trade Union Confederation (ITUC).
Together with other international charities, human rights campaigners, women’s rights groups, green groups, civil society organisations and trade unions we aim to help build a global movement of the majority to counter the power and the influence of the one per cent.
Where this has happened we have already seen inequality reduced. That is why the new global alliance to fight inequality is such an important step.
For example, until recently, Bolivia suffered high rates of poverty and inequality. After a decades-long struggle by Bolivia’s social movements and civil society organisations, the country’s first-ever indigenous president, Evo Morales, took office in 2006. A radical new constitution, which enshrined a series of political, economic and social rights, was introduced alongside a range of progressive and social programmes funded by renegotiating the countries contracts for oil and gas.
As a result poverty and inequality in the country have fallen continually for the past 10 years.
While Bolivia still faces significant challenges it shows what it possible when people join together. As part of the alliance to fight inequality Oxfam aims to be part of the fight against the many and varied causes of inequality across the globe – from poverty wages and the denial of women’s and workers’ rights to privatisation, tax avoidance and the excessive influence of a wealthy elite on government policy making.
Together I strongly believe we can make a change. I look forward to the alliance to fight inequality going from strength to strength over the coming year.
Oxfam’s Even it Up Campaign is calling for an end to tax havens.