According to Oxfam, an international NGO committed to fighting poverty, the money made by the world’s top 100 billionaires in the last year alone could end global poverty four times over.
Oxfam asserts that the wealth amassed by the world’s richest is encouraging inequality and deepening a divide between those in abject poverty and the rest of the world – making it even more difficult to end poverty once and for all. They assert that the world’s rich are getting richer at the expense of those in extreme poverty, and that the $240 billion that was collected in 2012 by the wealthiest 100 billionaires could end global poverty four times over.
“The richest 1 percent has increased its income by 60 percent in the last 20 years with the financial crisis accelerating rather than slowing the process,” while the income of the top 0.01 percent has seen even greater growth, a new Oxfam report said.
Although a few American billionaires have already pledged to donate much of their wealth back into the public sphere, including Bill Gates and Warren Buffet, the exact figure has not been disclosed, and foreign billionaires have not made any such pledge to match those given by Gates and Buffet.
Oxfam is a leading international philanthropy organization. Its new report, ‘The Cost of Inequality: How Wealth and Income Extremes Hurt us All,’ argues that the extreme concentration of wealth actually hinders the world’s ability to reduce poverty.
The report was published before the World Economic Forum in Davos next week, and calls on world leaders to “end extreme wealth by 2025, and reverse the rapid increase in inequality seen in the majority of countries in the last 20 years.”
Oxfam’s report argues that extreme wealth is unethical, economically inefficient, politically corrosive, socially divisive and environmentally destructive.
The report proposes a new global deal to world leaders to curb extreme poverty to 1990s levels by:
- closing tax havens, yielding $189bn in additional tax revenues
- reversing regressive forms of taxation
- introducing a global minimum corporation tax rate
- boosting wages proportional to capital returns
- increasing investment in free public services
The problem is a global one, Oxfam said:
”In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10 percent now take home nearly 60 percent of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more [inequality] than at the end of apartheid.”
In the US, the richest 1 percent’s share of income has doubled since 1980 from 10 to 20 percent, according to the report. For the top 0.01 percent, their share of national income quadrupled, reaching levels never seen before.
“We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true,” Executive Director of Oxfam International Jeremy Hobbs said. Hobbs explained that concentration of wealth in the hands of the top few minimizes economic activity, making it harder for others to participate: “From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favor.”
The report highlights that even politics has become controlled by the super-wealthy, which leads to policies“benefitting the richest few and not the poor majority, even in democracies.”
“It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite,” the report said.
The World Bank and International Monetary Fund have taken a similar stance, saying that income inequality hinders development and growth, and say that they aim to fund projects that limit the perpetual cycle of inequality.