Number of billionaires doubles since financial crisis as inequality spirals out of control
Number of billionaires doubles since financial crisis as inequality spirals out of control
Rising inequality could set the fight against poverty back by decades(1), Oxfam warned today as it published a new report showing that the gap between rich and the poor is undermining poverty eradication efforts.
Extreme inequality is bad for democracy, security, women, the environment and our health.
According to the report, Even it Up: Time to End Extreme Inequality, economic inequality threatens society as it is associated with a range of health and social problems, including mental illness and violent crime. Homicide rates, for example, are four times higher in countries with extreme economic inequality.
The report also details how the richest people in the world have more money than they could ever spend while hundreds of millions live in abject poverty leading to “huge differences in life chances” with the poorest, especially women, lacking access to education and more likely to die young.
Extreme inequalities are not just morally offensive, they are dangerous too. When humanitarian crises strike, it is almost always the poor who suffer most. We are seeing it now in the countries hit by Ebola.
“The problem with growing economic inequality is not that some people can buy sports cars and yachts when others can’t. It’s that the richest can literally live longer lives, buy spots in the best schools for their children, and influence the laws that affect us all,” said Julie Delahanty, Executive Director of Oxfam Canada.
“Youth are also bearing the brunt of extreme economic inequality. In many countries, they are facing high unemployment, precarious jobs and lack of access to basic social services. This inequality increases their vulnerability and can lead to social unrest,” said Denise Byrnes, Executive Director for Oxfam-Quebec.
In countries around the world, prosperity is not trickling down to ordinary people, but up to those at the top, whose exceptional wealth is growing ever more rapidly. The number of billionaires has doubled since the financial crisis. Here at home, the top 10 per cent of the Canadian population holds more wealth than the rest of the population combined. (2) Globally, the richest 85 people – who Oxfam revealed in January as having the same wealth as the poorest half of the world’s population(3) – saw their collective wealth increase by $668 million each day between 2013 and 2014.(4)
At the same time, 100 million people are driven into poverty every year because they are forced to pay for health care. From 2009-2014, at least one million women died in childbirth due to a lack of basic health services.(5)
Around the world women are paid on average 23% less than men, and the more economically unequal the society, the larger the gender pay gap. Only 23 of the Fortune 500 CEOs are women. Meanwhile women still hold the majority of the low-paid and precarious jobs.
Those precarious jobs can kill. It is no accident that the majority of workers who were killed in the Rana Plaza garment factory in Bangladesh last year were women.
From the IMF to the Pope, from President Obama to the World Economic Forum, there is a growing consensus that inequality is a crucial challenge of our time and that failure to act is both economically and socially damaging. The Oxfam report, endorsed by Graça Machel, Kofi Annan and Joseph Stiglitz among others(6), launches a new Oxfam campaign, also called Even it Up, to push world leaders to turn rhetoric into reality and ensure the poorest people get a fairer deal. Ensuring a living wage, supporting fair taxation and providing essential services are absolutely critical to tackling inequality and building fairer societies.
The effect of curbing inequality would be as dramatic as would be the failure to act. In India, for example, halting the recent increase in inequality could raise 90 million more people out of extreme poverty by 2019.(7)
“Inequality is a global problem and Canada is a part of it,” according to Delahanty. “We are not living up to our potential and reputation, particularly in terms of gender equality. For example, at a time when there are more working mothers than ever before in Canadian history, there is still no national childcare system and over one third of all single-mothers live below the poverty line."
But for those at the top it’s a different tale as they have enough assets to last them well beyond their years. If the world's three richest people were to spend $1million every single day each, it would take each one of them around 200 years to exhaust all of their wealth.(8) This is not a rich country story; today there are 16 billionaires in Sub-Saharan Africa, alongside the 358 million people living there in extreme poverty, while in South Africa, inequality is now greater than it was at the end of apartheid.
Even it Up: Time to End Extreme Inequality is being launched internationally today.
A copy of the report is available at www.oxfam.ca.
For more information contact:
Oxfam Media Relations
Notes for editors
1. If African countries continue on their current growth trajectory with no change in levels of income inequality, then the continent’s poverty rate won’t fall below three percent – the World Bank’s definition of ending poverty – until 2075. IMF (2014) ‘Fiscal Policy and Income Inequality’, IMF Policy Paper, Figure 8, Washington, D.C.: IMF, https://www.imf.org/external/np/pp/eng/2014/012314.pdf The target set by the IMF and the World Bank for ending poverty is 2030 https://www.imf.org/external/np/cm/2013/101213a.htm
2. Oxfam international inequality document. Wealth of the richest individuals as extracted from the Global 2014 Forbes Rich List, share of national wealth held by the rest of the population from the Credit Suisse Global Wealth Databook.
3. Oxfam 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. This figure was based on the wealth of the 85 billionaires at the time of the annual Forbes report in March 2013. Working for the Few report: https://policy-practice.oxfam.org.uk/publications/working-for-the-few-political-capture-and-economic-inequality-311312
4. In the period March 2013 to March 2014, Oxfam found that the wealth of the 85 richest individuals in the world, as identified in the Working for the Few paper detailed in Note 3, rose again by a further 14 per cent, or $244bn.This equates to a $668m increase a day; $463,888.89 every minute. Even It Up: Time to End Extreme Inequality report, pg. 3.
5. For the years 2009-2014 data on maternal death worldwide is only available for 2010 and 2013. In 2010, there were 287,000 maternal deaths worldwide, https://africa.unfpa.org/webdav/site/africa/users/africa_admin/public/Trends%20in%20maternal%20mortality%20A4.pdf, pg. 1. In 2013, there were 289,000 maternal deaths worldwide, https://apps.who.int/iris/bitstream/10665/112682/2/9789241507226_eng.pdf pg. 1. Using these figures, Oxfam calculated there were approximately 1.4 million maternal deaths due to a lack of basic health services from 2009-2013.
6. 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.
7. In India, reducing inequality by 10 Gini coefficient points, the equivalent of a 36 per cent reduction, could almost eliminate extreme poverty altogether, by lifting 173 million people out of extreme poverty.
8. Oxfam calculations for the time it would take the world’s three richest people to spend their wealth: Carlos Slim Helu and family’s wealth: $80bn. Years to spend all money, at $1m/day: 220 years. Earnings per day at ordinary rate of 1.95% interest: $4.3m. Earnings per day at average billionaire rate of return (5.3%): $11.6m. Bill Gates’ wealth: $79bn. Years to spend all money, at $1m/day: 218 years. Earnings per day at ordinary rate of 1.95% interest: $4.2m. Earnings per day at average billionaire rate of return (5.3%): $11.5m. Amancio Ortega’s wealth: $63bn. Years to spend all money, at $1m/day: 172 years. Earnings per day at ordinary rate of 1.95% interest: $3.3m. Earnings per day at average billionaire rate of return (5.3%): $9.1m. The average number of years for Carlos Slim Helu and family, Bill Gates and Amancio Ortega to spend their wealth is 203 years, based on the Oxfam calculations above. Even It Up: Time to End Extreme Inequality report, pg. 27.