For the past week, it required a special effort to avoid news about the World Economic Forum (WEF) meetings in Davos, Switzerland. Among other important news, like Chinese President Xi Jinping’s defence of globalization, probably one of the most spectacular headlines of this years’ WEF was the inequality report, by the U.K. based think tank, Oxfam. You know, the “8 richest people holds as much wealth as the poorest half of the world” thing. The headline was so catchy that many missed even the second part of this sentence; the number at the left side of the equation was shrinking each year.
Even at the summary of the report, Oxfam points out to more findings that were really worth thinking about. Your good ol’ writer is trying to learn to create infographics these days, so summarizing these facts will be a good exercise.
We don’t want to talk much about the picture above. Afterall, since the beginning of history, there has been those who are rich and those who are poor. Anyways, we find some comfort in thinking that most of these rich people were probably hard-working individuals, probably possesing a superior quality. Of course, most of the heirs in the third finding are not included in this opinion.
For us, the more disturbing facts from the Oxfam Report is below. The rich is accumulating wealth faster than the poor. Worse, more often than not, the rich is getting richer on the poor’s expense.
Take this; average yearly income of a CEO of company in S&P500 was $22.6 million in the year 2014. What does he have to do to earn this? Maximize his or her company’s profits in a given period of time. Among other steps, we can easily assume that a CEO could do a lot to decrease the company’s labor costs. Be it depressing salary increases, extending work hours or cutting jobs at home and even moving the operation overseas for lower payrolls. Of course this last one benefits the foreign country, which would enjoy new employment opportunities. However, the low-wage workers probably do not get as much from the wealth generated by this process as the top executives, and maybe ordinary stock holders.
Nevertheless, the fruits of globalization seemed to be enough for all parties, until the 2008-crisis. However, since then, the lower 80-90% of the global citizens are struggling to float, while the rich keeps getting richer. Joseph Stiglitz argues that in the ‘recovery’ of 2009-2010, the top 1% of US income earners captured 93% of the income growth.
Now, the lower levels of income is becoming aware of this bizarre wealth distribution equilibrium. They are getting angry and they are looking for alternatives, which promise change. In fact, they have the voting power in their hand to do this, the ability to shock the system with the choices like Brexit or Mr. Donald Trump.
Anyway, the richest eight, with all their wealth and power, can hardly match 3.6 billion votes.