World’s Top 1% Obtained 82% of Wealth Generated in 2017

What a horrifying report this is on the status of global inequality. It’s easily one of the most disturbing reports on economic inequality ever released, as it shows that the world economic system has overall been structured to benefit the top 1 percent to an extreme degree.

In 2017, a new billionaire was created every two days and while 82 percent of all wealth created went to the top 1 percent of the world’s richest while zero percent—absolutely nothing—went to the poorest half of the global population.

That troubling information is included in Oxfam’s latest report on global inequality—titled Reward Work, Not Wealth (pdf)—released Monday. In addition to the above, the report details how skyrocketing wealth growth among the already rich coupled with stagnant wages and persistent poverty among the lowest economic rungs of society means that just 42 individuals now hold as much wealth as the 3.7 billion poorest people on the planet.

“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system,” Winnie Byanyima, Oxfam’s executive director of Oxfam International. “The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors.”

Among the report’s key findings:

  • Billionaire wealth has risen by an annual average of 13 percent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 percent. The number of billionaires rose at an unprecedented rate of one every two days between March 2016 and March 2017.
  • It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.
  • It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.
  • 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, nine out of ten, are men.

The report comes just as the world’s economic and political elite are set to open the World Economic Forum, held annually in Davos, Switzerland. And why the global elite argue the summit’s focus is addressing the world’s most pressing problems, Oxfam found that the amount of new wealth which went to the world’s top one percent in 2017 was roughly $762 billion—a figure large enough, the group points out, to end extreme global poverty seven times over.

What the report ultimately exposes, Mark Goldring, Oxfam GB chief executive, told the Guardian, is a “system that is failing the millions of hardworking people on poverty wages who make our clothes and grow our food.”

“For work to be a genuine route out of poverty we need to ensure that ordinary workers receive a living wage and can insist on decent conditions, and that women are not discriminated against,” he added. “If that means less for the already wealthy then that is a price that we—and they—should be willing to pay.”

Not just cataloging and lamenting the metrics of inequality, the new report also puts forth a number of policy solutions that should be embraced by people and governments worldwide to reduce levels of inequality and lift billions of people out of extreme poverty. They include:

  • Limit returns to shareholders and top executives, and ensure all workers receive a minimum ‘living’ wage that would enable them to have a decent quality of life. For example, in Nigeria, the legal minimum wage would need to be tripled to ensure decent living standards.
  • Eliminate the gender pay gap and protect the rights of women workers. At current rates of change, it will take 217 years to close the gap in pay and employment opportunities between women and men.
  • Ensure the wealthy pay their fair share of tax through higher taxes and a crackdown on tax avoidance, and increase spending on public services such as healthcare and education. Oxfam estimates a global tax of 1.5 percent on billionaires’ wealth could pay for every child to go to school.

Though Oxfam has been calculating global inequality on an annueal basis for more than a decade, the anti-poverty group notes that this year’s report used new data from Credit Suisse and a separate kind of model. Specifically, Oxfam noted, the fact that the world’s 42 richest billionaires have as much wealth as the poorest bottom half “cannot be compared to figures from previous years – including the 2016/17 statistic that eight men owned the same wealth as half the world – because it is based on an updated and expanded data set published by Credit Suisse in November 2017.  When Oxfam recalculated last year’s figures using the latest data we found that 61 people owned the same wealth as half the world in 2016 – and not eight.”

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World’s Richest Become $1 Trillion Richer in 2017

The richest 500 people would still have enormous amounts of money if they together hadn’t gained $1 trillion, of course. There’s plenty that could be done to improve the lives of many millions of people with that $1 trillion too, and it’s disappointing how much of it continues to sit idle when it could be invested productively instead.

The richest people on earth became $1 trillion richer in 2017, more than four times last year’s gain, as stock markets shrugged off economic, social and political divisions to reach record highs.

The 23 percent increase on the Bloomberg Billionaires Index, a daily ranking of the world’s 500 richest people, compares with an almost 20 percent increase for both the MSCI World Index and Standard & Poor’s 500 Index.
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It should also be noted that the stock market measures the expected value of future corporate profits, not economic well-being for most people. The stock market is an accurate indication of how well the top 1 percent are doing, however, as they’re the people who stock ownership tends to be concentrated in.

UN Investigated Extreme Poverty in World History’s Richest Country

The poverty rates in the U.S. are absolutely shameful. Significant poverty in a wealthy country means that the wealth is being distributed improperly.

His fact-finding mission into the richest nation the world has ever known has led him to investigate the tragedy at its core: the 41 million people who officially live in poverty.

Of those, nine million have zero cash income – they do not receive a cent in sustenance.

Alston’s epic journey has taken him from coast to coast, deprivation to deprivation. Starting in LA and San Francisco, sweeping through the Deep South, traveling on to the colonial stain of Puerto Rico then back to the stricken coal country of West Virginia, he has explored the collateral damage of America’s reliance on private enterprise to the exclusion of public help.

The Guardian had unprecedented access to the UN envoy, following him as he crossed the country, attending all his main stops and witnessing the extreme poverty he is investigating firsthand.

Think of it as payback time. As the UN special rapporteur himself put it: “Washington is very keen for me to point out the poverty and human rights failings in other countries. This time I’m in the US.”

[…]

The tour comes at a critical moment for America and the world. It began on the day that Republicans in the US Senate voted for sweeping tax cuts that will deliver a bonanza for the super wealthy while in time raising taxes on many lower-income families. The changes will exacerbate wealth inequality that is already the most extreme in any industrialized nation, with three men – Bill Gates, Jeff Bezos and Warren Buffet – owning as much as half of the entire American people.

A few days into the UN visit, Republican leaders took a giant leap further. They announced plans to slash key social programs in what amounts to an assault on the already threadbare welfare state.

[…]

Trump’s undermining of human rights, combined with the Republican threat to pare back welfare programs next year in order to pay for some of the tax cuts for the rich they are rushing through Congress, will hurt African Americans disproportionately.

Black people are 13% of the US population, but 23% of those officially in poverty and 39% of the homeless.

 

World’s Top 1 Percent Own Over Half of Global Wealth

The world’s top 1 percent has more wealth than the world’s bottom 99 percent, which is confirmed again by the new Credit Suisse Global Wealth Report. Anything near that level of inequality is a tremendously immoral and destabilizing force in the world.

Anti-poverty advocates on Tuesday implored world leaders to combat the massive wealth gap described in the annual Global Wealth Report released by Credit Suisse, which showed that the world’s richest one percent own just over half of the global wealth.

“This report highlights the huge gulf between the haves and the have nots—the world’s richest one percent own more than everyone else combined while the poorest half of the population share less than a penny of every pound of wealth,” said Katy Chakrabortty, head of advocacy for Oxfam, in a statement.

At the height of the global financial meltdown in 2008, the world’s richest people held 42.5 percent of the global wealth, compared with 50.1 percent today. Thirty-six million people with over a million dollars make up just 0.7 percent of the global population, but control 46 percent of the world’s $280 trillion dollars.

Meanwhile, 3.5 billion people who make up the world’s least wealthy adults each have assets of less than $10,000. These adults account for 70 percent of people who are of working age.

The group is disproportionately represented in developing countries. “In some low-income countries in Africa, the percentage of the population in this wealth group is close to 100 percent,” according to Credit Suisse’s report.

The Global Wealth Report also presents a dire outlook for the world’s young adults, referred to in the document as “unlucky millennials.” Adults between the ages of 20 and 29 especially “faced the rigors of the financial crisis and the high unemployment that followed in many countries, and have also been widely hammered by high housing prices, rising student debt, and increasing inequality,” according to the report.

Despite being better educated than their parents’ generation, “millennials are not only likely to experience greater challenges in building their wealth over time, but also greater wealth inequality than previous generations.”

“We expect only a minority of high achievers and those in high demand sectors such as technology or finance to effectively overcome the ‘millennial disadvantage’,” said Urs Rohner, Credit Suisse’s chairman, in an interview with the Guardian.

Oxfam noted that the report is just the latest sign that the world’s poorest have the deck stacked against them, recalling the recent release of the Paradise Papers, which showed how the rich hide their wealth in order to avoid paying the taxes that stand to shore up public services that, when well-funded, benefit the whole population.

“The recent Paradise Papers revelations laid bare one of the main drivers of inequality—tax dodging by rich individuals and multinationals,” said Chakrabortty. “Governments should act to tackle extreme inequality that is undermining economies around the world, dividing societies, and making it harder than ever for the poorest to improve their lives.”

Three Richest Americans Have More Wealth Than the Bottom Half of the U.S. Population

Three people have more wealth than over 160 million in world history’s richest country. This absurd level of inequality is one of the most significant issues of the modern era for a reason — it is deeply unjust and unnecessary.

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In the United States, the 400 richest individuals now own more wealth than the bottom 64 percent of the population and the three richest own more wealth than the bottom 50 percent, while pervasive poverty means one in five households have zero or negative net worth.

Those are just several of the striking findings of Billionaire Bonanza 2017, a new report (pdf) published Wednesday by the Institute for Policy Studies (IPS) that explores in detail the speed with which the U.S. is becoming “a hereditary aristocracy of wealth and power.”

“Over recent decades, an incredibly disproportionate share of America’s income and wealth gains has flowed to the top of our economic spectrum. At the tip of that top sit the nation’s richest 400 individuals, a group that Forbes magazine has been tracking annually since 1982,” write IPS’s Chuck Collins and Josh Hoxie, the report’s authors. “Americans at the other end of our economic spectrum, meanwhile, watch their wages stagnate and savings dwindle.”

Collins and Hoxie are quick to note that the vast gulf that currently exists between the rich and everyone else is not the product of some inexplicable “natural phenomenon.” It is, rather, the result of “unfair economic policies that benefit those at the top at the expense of those at the bottom.”

[…]

In order to get a broader sense of the size of the chasm between rich and poor in the U.S., Collins and Hoxie place the net worth of the top one percent and the bottom one percent side by side.

“All combined, households in the bottom one percent have a combined negative net worth of $196 billion,” the report finds. “For comparison, the top one percent, a category holding the exact same number of people, have positive $33.4 trillion in combined net worth.”

Even mainstream institutions like the International Monetary Fund have acknowledged that such vast disparities of wealth and income are not sustainable, politically or economically. But as Billionaire Bonanza notes, the Trump administration—with the help of the GOP-controlled Congress—appears bent on making these disparities worse by slashing taxes for the wealthy while gutting programs that primarily benefit low-income and middle class Americans.

So the first priority, Collins and Hoxie note, is to “reject tax and other federal policies that will add oil to the inequality fire.”

In terms of going on the offensive once the “do no harm” principle is observed, the report makes several suggestions, including:

  • Enacting higher marginal tax rates on individuals earning above $250,000 and $1 million;
  • “Addressing the problem of hidden wealth,” which often leads to an underestimation of the level of wealth inequality;
  • Instituting a tax on Wall Street financial transactions, which could bring in an estimated $350 billion in federal revenue over a decade;
  • Eliminate the carried interest loophole, which allows hedge fund managers to “reclassify wage income as capital income” and pay less in taxes as a result; and
  • Bolstering, rather than eliminating, the estate tax, which only affects a tiny number families.

As “the elite ranks of our billionaire class continue to pull apart from the rest of us,” the report notes, many Americans—including students saddled with loan debt, workers suffering from stagnant wages, and families who have seen “their wealth and savings evaporate”—are revolting against the system that allowed the richest to accumulate such wealth at the expense of so many.

“A century ago, a similar anti-inequality upsurge took on America’s vastly unequal distribution of income and wealth and, over the course of little more than a generation, fashioned a much more equal America,” Collins and Hoxie conclude. “We can do the same.”

 

Paradise Papers Release Shows Immense Wealth Hidden by World Elites in Offshore Tax Havens

The Paradise Papers show that the world is moving too quickly in the direction of what’s perhaps appropriately described as an international oligarchy controlled by billionaires and giant multinational corporations.

The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.

The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.

The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times.

The project has been called the Paradise Papers. It reveals:

[…]

Meanwhile, multinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week.

“Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”