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Global inequality, characterised by the disparity between the Global North and the Global South, has experienced a notable increase for the first time in a quarter-century.
This unsettling trend is being significantly exacerbated by the impacts of climate breakdown, largely driven by the super-rich, as outlined in the report Inequality Inc recently published by Oxfam on January 15, 2024.
According to the report, if present patterns persist, the world may witness its first trillionaire within a decade, but it would take an astonishing 229 years to eradicate poverty altogether. The report, released at the World Economic Forum in Davos, underscores the alarming widening of the wealth gap between the world’s wealthiest and the most impoverished individuals.
It highlights a substantial concentration of global corporate and monopoly power, which is contributing to economy-wide inequality. Shockingly, the world’s five wealthiest people have seen their fortunes surge from $405 billion to $869 billion since 2020, accumulating wealth at a staggering rate of $14 million per hour, while nearly five billion people have become financially worse off. In 2023, billionaires became $3.3 trillion, or 34 per cent, richer compared to their wealth in 2020.
In addition to economic inequality, the report reveals how corporate and monopoly power intensify disparities in gender and race. It is noteworthy that seven out of the top 10 publicly listed corporations globally have a billionaire as their chief executive or principal shareholder. Corporate power, as indicated in the report, contributes to inequality through labour exploitation, tax evasion, privatisation of public services and the exacerbation of climate issues.
The gender wealth gap is another prominent concern exposed by Oxfam’s report. Men globally possess $105 trillion more in wealth than women, an inequality equivalent to over four times the size of the entire US economy.
Shockingly, it would take a female worker in the health and social sector 1,200 years to earn what a CEO in the largest Fortune 100 companies earns on average in just one year, the analysis showed.
The report further highlighted that 791 million workers worldwide have seen their wages fail to keep pace with inflation, resulting in a collective loss of $1.5 trillion over the past two years, equivalent to almost a month (25 days) of lost wages for each worker.
In response to these alarming findings, Oxfam’s report suggests concrete and proven strategies to create a more equitable economy. It emphasises that wealthier governments bear a special responsibility, given their significant influence in shaping global rules and norms. To combat extreme inequality, governments are urged to institute radical measures to redistribute power from billionaires and corporations back to ordinary citizens. Effective regulation and a reimagination of the private sector, potentially through tax reforms, are among the proposed solutions.
The Global Tax Evasion Report 2024 underscores the regressive nature of tax systems in major countries, with the extremely wealthy paying only a small fraction of their income in taxes compared to those with lower incomes. Billionaires are found to be proportionally undertaxed, with effective tax rates ranging from 0 per cent to 0.5 per cent of their wealth.
Oxfam International’s interim Executive Director, Amitabh Behar, emphasises the importance of public intervention to curb corporate power and inequality, shaping a fairer market free from billionaire control. “Governments must intervene to break up monopolies, empower workers, tax these massive corporate profits and, crucially, invest in a new era of public goods and services.”
Oxfam based its calculations of the top five richest billionaires on Forbes’ data as of November 2023.