The world’s five richest men have more than doubled their fortunes from $405 billion (£321 billion) to $869 billion (£688 billion) since 2020, while the wealth of the poorest 60 per cent – almost five billion people – has fallen, a new Oxfam report on inequality and global corporate power has found.
If current trends continue, the world will have its first trillionaire within a decade but poverty won’t be eradicated for another 229 years.
Inequality Inc., published as business elites gather for the World Economic Forum in the Swiss resort town of Davos, examines how sharply increasing billionaire wealth and rising corporate and monopoly power are interconnected. And how corporate power exploits and magnifies inequalities of gender and race, as well as economic inequality.
The report reveals that seven out of ten of the world’s biggest corporations have a billionaire as CEO or principal shareholder.
These corporations are worth $10.2 trillion (£8.1 trillion), equivalent to more than the combined GDPs of all countries in Africa and Latin America. Using Wealth X data, it also finds that the world’s richest 1% own 43 per cent of all global financial assets.
Over the same period, people worldwide are working harder and longer hours, often for poverty wages in precarious and unsafe jobs. Across 52 countries, average real wages of nearly 800 million workers have fallen.
These workers have lost a combined $1.5 trillion (£1.2 trillion) over the last two years, equivalent to nearly a month (25 days) of lost wages for each worker. The most recent Gini index – which measures inequality – found that global income inequality is now comparable with that of South Africa, the country with the highest inequality in the world.
Aleema Shivji, Oxfam’s interim Chief Executive said “These extremes cannot be accepted as the new norm, the world can’t afford another decade of division. Extreme poverty in the poorest countries is still higher than it was pre-pandemic, yet a small number of super-rich men are racing to become the world’s first trillionaire within the next ten years.
“This ever-widening gulf between the rich and the rest isn’t accidental, nor is it inevitable. Governments worldwide are making deliberate political choices that enable and encourage this distorted concentration of wealth, while hundreds of millions of people live in poverty. A fairer economy is possible, one that works for us all. What’s needed are concerted policies that deliver fairer taxation and support for everyone, not just the privileged.”
The past three years’ supercharged surge in extreme wealth has solidified. Despite some individual fluctuations, billionaires are $3.3 trillion (£2.6 trillion) richer than in 2020, and their wealth has grown three times faster than the rate of inflation. The wealth of the five richest men has increased by 114 per cent. Meanwhile, the wealth of the poorest 4.77 billion people (60 per cent) has fallen by 0.2 per cent in real terms.
Using data from Wealth X, Oxfam has found that the world’s richest 1% own 43 per cent of all global financial assets – identifiable, publicly listed instruments including stocks, shares and bonds, plus stakes in privately held businesses. In the UK, the richest 1% own 33 per cent of all financial assets, with a value of $2.1 trillion (£1.6 trillion).
Mirroring the fortunes of the super-rich, big business is set to smash annual profit records over the last year. 148 of the world’s biggest corporations together raked in $1.8 trillion (£1.4 trillion) in total net profits in the year to June 2023, a 52 per cent jump compared to average net profits in 2018-2021. Their windfall profits surged to nearly $700 billion (£554 billion). The report finds that for every $100 of profit made by 96 major corporations between July 2022 and June 2023, $82 was paid out to shareholders.
New Oxfam analysis of World Benchmarking Alliance data on more than 1,600 of the largest corporations worldwide shows that fewer than one in 250 of them are publicly committed to paying workers a living wage and support a living wage in their value chains. It would take 1,200 years for a woman working in the health and social sector to earn what the average CEO in the biggest 100 Fortune companies earns in a year.
Progressive wealth taxes are one of the solutions for governments to both reduce inequality and raise vital revenue for public investment. A wealth tax on British millionaires and billionaires at a rate of between one to two per cent on net wealth above £10 million, could generate up to £22 billion each year.
Julia Davies, investor, is a founding member of Patriotic Millionaires UK, a nonpartisan group of British millionaires campaigning for a wealth tax. She said “Only 4 pence in every tax pound comes from taxes on wealth. It is miniscule, especially when compared to income at 42 pence in the pound. I am fortunate enough to be able to contribute more and want to do so. People argue that millionaires like me can just donate more voluntarily to the Treasury – but this clearly isn’t a solution. Just like income taxes, wealth taxes should be mandatory, not optional.
“Just imagine what £22 billion a year invested in public services and infrastructure could pay for; improving the lives of every one of us who live in the UK and providing our elderly, young and vulnerable with the care and support they need and deserve. Investment in a green economy, improving our care services and giving every child, whatever their background, the chance to succeed. It’s time to stop treating taxation of wealth as off the table and get on with using it to invest in building the future the British people deserve.”
