Wealth gap is dangerous
There was much talk this past week just before and during the 2018 World Economic Forum in Davos, Switzerland about the “inequality crisis.”
The expression underlines a new level of urgency about the huge and ever- increasing gap between the relatively few, very rich people in the world who possess an inordinate share of its wealth, compared with the much greater mass of people who live and work in extreme and often dangerous poverty.
High- profile speakers at this year’s annual Davos gathering of the world’s economic leadership elite stood on a stage with a gentle, blue and white backdrop with these words writ large many times over: “IMPROVING THE STATE OF THE WORLD”
Canada’s Prime Minister Justin Trudeau was among one of the first world leaders to deliver a keynote address. He warned a do- nothing approach to the “staggering” gap between rich and poor would lead to failure for everyone.
“Too many corporations have single- mindedly put the pursuit of profit before the well- being of workers. All the while, companies avoid taxes and boast record profits with one hand while slashing benefits with the other,” he said.
Trudeau focused much of his speech on improving working conditions for women around the world as one of the key ways to deal with the wealth gap as well as the gender gap.
It was no coincidence the charitable organization, Oxfam International, dedicated to alleviating poverty, released its 2017 report, Reward Work, not Wealth, just before the Davos forum. It received considerable world- wide media attention.
“Last year saw the biggest increase in billionaires in history, one more every two days,” the report says, adding up to a total of 2,043 in the world. Oxfam used data from Forbes and the Credit
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Suisse Global Wealth datebook for its calculations.
“Billionaires saw their wealth increase by $ 762 billion in 12 months. This huge increase could have ended global extreme poverty seven times over. 82 percent of all wealth created in the last year went to the top percent, while the bottom 50 percent saw no increase at all.
“Dangerous, poorly paid work for the many is supporting extreme wealth for the few. Women are in the worst work, and almost all the super- rich are men.” Oxfam calls on world governments to “create a more equal society by prioritizing ordinary workers and small- scale food producers instead of the rich and powerful.”
The U. K.- based charity said the “big winners” in the recently booming global economy, especially record- high stock market values, have not been ordinary workers, “but the owners of wealth, or capital. Income from wealth -for example interest payments, share dividends or the rising value of property -- has increased far faster than wages. Contrary to the conventional wisdom that everyone benefits from a bullish stock market, there is growing evidence showing significant correlation between growing inequality and a rising stock market.”
Oxfam is calling for less talk and more action “to give people what they want: a more equal world.”
One of the Oxfam concerns that especially caught my eye was the extremely high rate of global youth unemployment.
“Almost 43 percent of the global youth labour force is still either unemployed, or working, but living in poverty,” the Oxfam report says. “More than 500 million young people are surviving on less than $ 2 a day. In developing countries, it has been estimated that 260 million young people are not in employment, education or training. This is true for one in three young women.”
I have long maintained that a lack of hope among vulnerable young people in the world, especially, but not only young men, is one of the root causes of serious social problems, including radicalization in all its forms.
John McDonnell, a Labour MP in the U. K., also known as the “Shadow Chancellor” in the Labour opposition shadow cabinet, was also one of the speakers at the Davos forum, for the first time in his case.
He made his views known on the “inequality crisis” beforehand. He warned of a “political and social avalanche” unless the global economic rules are rewritten, The Independent reported on- line.
McDonnell said many at the Davos Forum have been “patting themselves on the back” as global economic performance improves. “But they should be worried. In the real world, outside the Davos bubble of Alpine restaurants and chalets, the global economic system that have built isn’t working for billions of people.”
The Oxfam report speaks of “a perfect storm of related factors” underlying the growing gap between the very rich and the very poor. They include an erosion of workers’ rights, larger corporations under “huge pressure to deliver ever greater returns to wealthy shareholders,” and “greater automation ( that) also puts more power in the hands of wealthy owners, and more pressure on workers.”
Oxfam calls for, among other things, government regulations to “ensure workers have more bargaining power; that we end tax havens; that monopolies are broken up; and that the financial sector and technological progress benefit the majority. Governments and businesses can both act to ensure that poverty wages, slavery, and precarious and dangerous work are not seen as morally acceptable.
“This will require global cooperation on a far greater scale than today,” Oxfam says, adding, “in today’s political climate this will be very hard to achieve.”
That, to say the least, is an understatement.