Failure to tackle inequality will leave hundreds of millions trapped in poverty unnecessarily
Rising inequality could set the fight against poverty back by decades, Oxfam warned today as it published a new report showing that the number of billionaires worldwide has more than doubled since the financial crisis.
The report, Even it Up: Time to End Extreme Inequality, details how the richest people in the world have more money than they could spend in several lifetimes while hundreds of millions live in abject poverty. The richest 85 people - who Oxfam revealed in January have the same wealth as the poorest half of the world's population -
saw their collective wealth increase by $668 million every day over the last year. That's almost half a million dollars every minute.
Oxfam is calling on governments around the world to Even it Up by taking action to level the playing field by implementing policies that redistribute money and power to ensure the poor benefit more directly. Governments should follow a seven point plan to stem the rising tide of inequality - including clamping down on tax dodging and investing in universal, free health and education.
The report, endorsed by the Bank of England Chief Economist Andrew Haldane, Graça Machel, Professor Jeffrey Sachs and Nobel prize- winning economist Joseph Stiglitz among others, is the opening salvo of a new Oxfam campaign, also called Even it Up, to push world leaders to turn rhetoric into reality and close the gap between rich and poor.
Mark Goldring, Oxfam's Chief Executive, said: "Inequality is one of the defining problems of our age. In a world where hundreds of millions of people are living without access to clean drinking water and without enough food to feed their families, a small elite have more money than they could spend in several lifetimes.
"The consequences of extreme inequality are harmful to everyone - it robs millions of people of better life chances and fuels crime, corruption and even violent conflict. Put simply, it is holding back efforts to end poverty.
"Governments around the world have been guilty of a naive faith that wealth going to those at the top will automatically benefit everyone. That's not true - it is their responsibility to ensure the poorest are not left behind."
In addition to tackling tax dodging and investing in public services, Oxfam is calling on governments to:
- Introduce equal pay legislation and promote economic policies to give women a fair deal
- Agree a global goal to tackle inequality
- Introduce minimum wages and move towards a living wage for all workers
- Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth
- Ensure adequate safety-nets for the poorest, including a minimum income guarantee.
Oxfam's report says that the number of billionaires in the world more than doubled to 1,645 between 2009 and 2014; evidence that whilst those at the top have recovered quickly from the financial crisis, the benefits of economic growth are not being shared with the vast majority.
As an illustration of the extent of extreme inequality in the world today, Oxfam calculated that if you were to tax billionaires just 1.5% of their wealth over $1bn it could raise $74bn a year, enough to fill the annual gaps in funding needed to get every child into school and to deliver health services in the world's poorest countries. Since 2009, at least one million women have died in childbirth due to a lack of basic health services and around the world 57 million children are currently missing out on school.
There are 16 billionaires in Sub-Saharan Africa living alongside the 358 million people in extreme poverty, and in South Africa inequality is now greater than it was at the end of apartheid. If African countries continue on their current growth trajectory with no change in levels of income inequality, then it is estimated that the continent's poverty rate won't fall below 3 percent - the World Bank's definition of ending poverty - until 2075.
Mark Goldring said: "Extreme inequality is far from being inevitable - it is the result of political choices and economic fashion, kept in place by a wealthy elite whose influence helps keep the rules rigged in their favour. Too often, the 'invisible hand of the market' is used as an excuse to pick the pockets of the poor.
"In countries around the world, a wealthy minority are taking an ever-increasing share of the pie. This is not just an issue of fairness, but in a world where people are dying of hunger or because they can't afford healthcare, it becomes an issue of life and death."
Whilst it is necessary to offer fair reward for talent and hard work and to encourage innovation and enterprise, there is growing consensus - from the IMF, World Bank and World Economic Forum, to the Pope and President Obama - that today's extreme levels of inequality are both economically and socially damaging. Mark Carney, Governor of the Bank of England has warned that "unchecked market fundamentalism" is a threat to the future dynamism of capitalism.
Endorsing the Even it Up report, Andrew Haldane said: "In highlighting the problem of inequality Oxfam not only speaks to the interests of the poorest people but also the wider collective interest: there is rising evidence that extreme inequality harms, durably and significantly, the stability of the financial system and growth in the economy. It slows development of the human, social and physical capital necessary for raising living standards and improving well-being. That penny is starting to drop among policymakers and politicians."
Her Eminence Graça Machel said of the Even It Up report: "The last decades have seen incredible human progress - across Africa and the world. But this progress is under threat from the scourge of rapidly rising inequality.
"Addressing the gap between the richest people and the poorest and the impact this gap has on other pervasive inequalities between men and women and between races that make life for those at the bottom unbearable is an imperative of our times. Too many children born today have their future held hostage by the low income of their parents, their gender and their race.
"The good news is that this growing inequality is not inevitable. It can be resolved."
For more information, or for a copy of the report, please contact: Sarah Dransfield on 01865 472269 / 07767 085636 / firstname.lastname@example.org or Jon Slater on 01865 472249 / 07876 476403 / email@example.com
Notes to editors
Oxfam's calculated figure - that if you were to tax billionaires just 1.5% of their wealth over $1bn it could raise $74bn a year - is for 2014.
The annual gap for providing key health services (including specific interventions such as maternal health, immunisation for major diseases like HIV/ AIDS, TB and malaria, and for significant health systems strengthening to see these and other interventions delivered) in 2015 is $37bn a year according to WHO.
The annual gap for providing universal basic education, according to UNESCO, is $26bn a year.
According to the Forbes Rich List, the number of global billionaires was 793 in 2009, at the end of the financial crisis. Since then, the number has more than doubled to 1645.
If Carlos Slim, the world's richest man, were to cash in all his wealth and spend $1m every day, it would take him 220 years to spend all of his money. But in reality the interest on his wealth, even in a modest savings account, would make him an extra $4.3 m every day.
The 10 richest people on the planet, according to Forbes (as of Aug 2014) are:
Carlos Slim Helu and family (Mexico)
Bill Gates (USA)
Amancio Ortega (Spain)
Warren Buffett (USA)
Larry Ellison (USA)
Charles Koch (USA)
David Koch (USA)
Liliane Bettencourt and family (France)
Christy Walton and family (USA)
Sheldon Adelson (USA)
Oxfam's research in early 2014 found that the 85 richest individuals in the world have as much wealth as the poorest half of the global population, based on the wealth of the 85 billionaires at the time of the annual Forbes report in March 2013. In the period of a year from March 2013 to March 2014 their wealth has risen again by a further 14 percent, or $244bn. This equates to a $668m-a-day increase.
List of those who have endorsed the Even It Up: Time to End Extreme Inequality report:
Graça Machel, Founder of the Foundation for Community Development in Mozambique, UN independent expert on the impact of armed conflict on children, and founding member of The Elders; Kofi Annan, Chair of the Africa Progress Panel, former Secretary-General of the United Nations and Nobel Laureate; Professor Joseph Stiglitz, Columbia University, winner of Nobel Prize for Economics; Nawal El Saadawi, Egyptian writer and activist; Andrew Haldane, Chief Economist, Bank of England; Jeffrey Sachs, Director of the Earth Institute at Columbia University;
Rosa Pavanelli, Secretary General, Public Services International; Ha-Joon Chang, Economist at the University of Cambridge; Jay Naidoo, Chair of the Board of Directors and Chair of the Partnership Council, Global Alliance for Improved Nutrition; Kate Pickett and Richard Wilkinson, Co-authors of The Spirit Level; Michael J. Sandel, author of What Money Can't Buy: The Moral Limits of Markets; Kevin Watkins, Executive Director, Overseas Development Institute; Mark Thomas, Partner and Head of Strategy, PA Consulting Services; Jayati Ghosh, professor of economics at Jawaharlal Nehru
university; Amina J Mohammed Special, Advisor of the UN Secretary-General on Post-2015 Development Planning.