Growing inequality threatens to pull societies apart
Govts must increase taxes on rich to generate funds for health, education and job creation
Govts must increase taxes on rich to generate funds for health, education and job creation. CREATIVE COMMONS
NORTHAMPTON:
Consider the following fact: Since 2015, the richest 1% has owned more wealth than the rest of the planet.
A recent report “An economy for the 99 per cent” by Oxfam has put the gap between the rich and the poor to be far greater than what was feared before. It has claimed that just 8 men own the same wealth as 3.6 billion who make up the poorest half of the world.
The report details how big businesses and the super-rich are fuelling inequality by evading taxes, driving down wages and using their power to influence politics.
Winnie Byanyima, Executive Director of Oxfam International, has said that “it is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day. Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.”
The report has laid emphasis on inequality as a major issue that is afflicting the world and has put forward some startling facts to prove how stark it is.
Incomes of the poorest 10% of people increased by less than $3 a year between 1998 and 2011, while the incomes of the richest 1% increased 182 times.
Growing inequality threatens to pull societies apart. It leads to increase in crime and insecurity and undermines the fight to end poverty.
Multilateral organisations such as the World Bank have kept the twin goals of fighting poverty and working towards shared prosperity as their foremost agendas.
Former US president Obama in his departing speech to the UN General Assembly also emphasised on global inequality as a crucial agenda when he stated that “a world in which 1% of humanity controls as much as 99% will never be stable”.
Political connections
Interestingly, the report also claims that inequality is fuelled by the fact that big businesses and the super-rich use their connections to make sure that government policy works for them.
They use a network of tax havens to avoid paying their fair share of tax. Contrary to popular belief, most super-rich are not ‘self-made’.
Analysis from Oxfam has shown that over half of the world’s billionaires either inherited their wealth or accumulated it through industries that are prone to corruption and cronyism.
The report has also interviewed ordinary people in some of the poorest countries and provides a good indicator of how inequality affects people.
Seven out of ten people live in a country that has seen a rise in inequality in the last 30 years. Women are hugely disadvantaged amongst this group as they work in poorly paid sectors and take a disproportionate amount of unpaid care work.
The report indicates that based on current trends, it will take women a whopping 170 years to be paid the same as men.
Proposals for a more equal world
Stark inequality has also resulted in public anger and has been manifested in recent global events such as the election of Donald Trump in the US, Brexit in the UK and the election of President Duterte in the Philippines.
The report has made some suggestions for achieving a more ‘human’ economy. This includes efforts by governments to increase taxes on high incomes and wealth to ensure a more level playing field and to generate funds for investment in health, education and job creation.
Governments must ensure that economies work for women. They must make efforts to remove obstacles to women’s access to education and ensure a level playing field.
A concerted effort by governments and the private sector is needed to fight inequality across the world.
The writer is an economist and ex-central banker
Published in The Express Tribune, January 23rd, 2017.
Consider the following fact: Since 2015, the richest 1% has owned more wealth than the rest of the planet.
A recent report “An economy for the 99 per cent” by Oxfam has put the gap between the rich and the poor to be far greater than what was feared before. It has claimed that just 8 men own the same wealth as 3.6 billion who make up the poorest half of the world.
The report details how big businesses and the super-rich are fuelling inequality by evading taxes, driving down wages and using their power to influence politics.
Winnie Byanyima, Executive Director of Oxfam International, has said that “it is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day. Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.”
The report has laid emphasis on inequality as a major issue that is afflicting the world and has put forward some startling facts to prove how stark it is.
Incomes of the poorest 10% of people increased by less than $3 a year between 1998 and 2011, while the incomes of the richest 1% increased 182 times.
Growing inequality threatens to pull societies apart. It leads to increase in crime and insecurity and undermines the fight to end poverty.
Multilateral organisations such as the World Bank have kept the twin goals of fighting poverty and working towards shared prosperity as their foremost agendas.
Former US president Obama in his departing speech to the UN General Assembly also emphasised on global inequality as a crucial agenda when he stated that “a world in which 1% of humanity controls as much as 99% will never be stable”.
Political connections
Interestingly, the report also claims that inequality is fuelled by the fact that big businesses and the super-rich use their connections to make sure that government policy works for them.
They use a network of tax havens to avoid paying their fair share of tax. Contrary to popular belief, most super-rich are not ‘self-made’.
Analysis from Oxfam has shown that over half of the world’s billionaires either inherited their wealth or accumulated it through industries that are prone to corruption and cronyism.
The report has also interviewed ordinary people in some of the poorest countries and provides a good indicator of how inequality affects people.
Seven out of ten people live in a country that has seen a rise in inequality in the last 30 years. Women are hugely disadvantaged amongst this group as they work in poorly paid sectors and take a disproportionate amount of unpaid care work.
The report indicates that based on current trends, it will take women a whopping 170 years to be paid the same as men.
Proposals for a more equal world
Stark inequality has also resulted in public anger and has been manifested in recent global events such as the election of Donald Trump in the US, Brexit in the UK and the election of President Duterte in the Philippines.
The report has made some suggestions for achieving a more ‘human’ economy. This includes efforts by governments to increase taxes on high incomes and wealth to ensure a more level playing field and to generate funds for investment in health, education and job creation.
Governments must ensure that economies work for women. They must make efforts to remove obstacles to women’s access to education and ensure a level playing field.
A concerted effort by governments and the private sector is needed to fight inequality across the world.
The writer is an economist and ex-central banker
Published in The Express Tribune, January 23rd, 2017.