By Umar Aman
Oxfam’s Inequality Report 2019, which came ahead of the World Economic Forum (WEF) summit in Davos, should serve as a clarion call to action. The report says that 26 billionaires now own as much wealth as the poorest 3.8 billion of the humanity. In India, nine richest people own fortunes equivalent to bottom 50 percent of the population.
The report says that our economy is broken, with hundreds of millions of people living in extreme poverty, while huge rewards go to those at the very top. Surprisingly, “the number of billionaires has doubled since the financial crisis and their fortunes grow by $2.5bn a day, yet the super-rich and corporations are paying lower rates of tax than they have in decades.” The report observes that the human costs of income and wealth inequality are huge in the form of children with no teachers, clinics with no medicines. “Piecemeal private services punish poor people and privilege elites. Women suffer the most, and are left to fill the gaps in public services with many hours of unpaid care.”
We need to transform our economies to deliver universal health, education and other public services. To make this possible, the richest people and corporations should pay their fair share of tax. This will drive a dramatic reduction in the gap between rich and poor and between women and men.
World leaders as well as our country’s politicians need to mount a concerted campaign against growing wealth gap. If economic inequality keeps growing at this speed, it may unravel the fabric that keeps society together. The report warns us: “Rising wealth inequality threatens the social fabric of the nation.”
The situation is grim as, according to Oxfam, 25 million people across the world are working in slave labour. Millions more are working long hours on low pay, just to earn enough to feed their families. It’s no coincidence that the worst paid jobs – like making garments and domestic work – are done by women and girls. Inequality has kept people trapped in poverty. And, as per the study, it is compromising the efforts to alleviate poverty.
Interestingly, most leaders show their concern about the scourge of growing economic inequality. However, their concern needs to be translated into concrete action so that people at the bottom get their fair share of economic growth. Leaders everywhere, especially in Asia and Africa, should work out a plan to grapple with this vast and growing gap between rich and poor.
The report notes that unprecedented levels of tax avoidance and evasion allow the rich to pay less tax and in turn make them become richer. “There can be no moral justification for this behaviour beyond the discredited neoliberal dogma that if everyone maximises their selfishness, the world will somehow be a better place.” The report is scathing about tax avoidance and evasion and says, “super-rich are hiding $7.6 trillion from the tax authorities.” The study reveals that corporations hide money offshore to evade taxes, and claims that this deprives developing countries of $170bn a year.
Inequality is bad for a country’s economy as well as society. Therefore, it must be addressed with utmost seriousness and a well-thought-out strategy. The report says: “High level of wealth disparity subverts democracy.” Governments should crack down on tax dodging, invest heavily in public services and ensure that the low paid get higher wages.
The study details shocking levels of gap between the haves and have-nots. It expresses concerns that the fortunes are being concentrated into the hands of the richest few, and the poorest are suffering from deprivations and hardships.
The majority in the developing nations are not in a position to give their children proper education or even access healthcare facilities. Lack of good education does not allow majority of people to get out of the poverty trap. Winnie Byanyima, Executive Director of Oxfam International, says: “The size of your bank account should not dictate how many years your children spend in school, or how long you live – yet this is the reality in too many countries across the globe.” In India and in other developing countries the government and the civil society must ensure that every child gets good education so s/he becomes employable in the job market. There should be free healthcare and education for all.
Women and girls are worst affected by the rising economic inequality. Interestingly, the Oxfam report has a special focus on women’s work under the heading “inequality is sexist” wherein it tries to figure out whey women are the poorest of the poor.
Oxfam report has also noted that public services are suffering from chronic underfunding or being outsourced to private companies that exclude the poorest people. In many countries a decent education or quality healthcare has become a luxury only the rich can afford. Every day 10,000 people die because they lack access to affordable healthcare. In developing countries, a child from a poor family is twice as likely to die before the age of five as a child from a rich family. In countries like Kenya a child from a rich family will spend twice as long in education as one from a poor family.
The study cites the United Nations report saying that women across the world earn 23 percent less than men while men own 50 percent more of the total wealth than women. In India, women are still receiving 34 percent less wages than their male counterparts for the same work.
The study estimates, “If all the unpaid care work carried out by women across the globe was done by a single company, it would have an annual turnover of $10 trillion – 43 times that of Apple, the world’s biggest company.”
Girls bear the brunt of wealth inequality in a way that they are barred from going to school or college because the parents don’t have enough money to provide for the family members and educate the children simultaneously. “Girls are pulled out of school first when the money isn’t available to pay fees, and women clock up hours of unpaid work looking after sick relatives when healthcare systems fail.”
In order to deal with the scourge of rising wealth inequality, Oxfam suggests that taxes should be raised. As per its estimation, a one percent wealth tax will be enough to educate 262 million out of school children and to save 3.3 million lives. Jeff Bezos, Amazon founder, is the wealthiest man on earth with a $112 billion fortune. Oxfam estimates that only one percent of his total wealth is roughly equivalent to the health budget of Ethiopia, a country with a population of 105 million people.
Oxfam observes that people around the world are angry and frustrated. Therefore, it urges governments to deliver real change by ensuring that corporations and wealthy individuals pay their fair share of tax, and invest this money in free healthcare and education to meet the needs of everyone – including women and girls whose needs are so often overlooked. Winnie Byanyima believes that governments can build a brighter future for everyone – not just a privileged few.
The study has come up with key recommendations, which could help make a significant stride in reducing the gap between rich and poor. Oxfam thinks that governments should listen to ordinary citizens and take meaningful action to reduce inequality. It urges governments to set concrete, time-bound targets and action plans to reduce inequality as part of their commitments under Sustainable Development Goals (SDG) on inequality. It advises governments to work in three areas.
Firstly, governments need to deliver universal free healthcare, education and other public services that also work for women and girls. Governments should put an end to privatisation of public services. They should provide pensions, child benefits and other social protection for all. They should design all services to ensure they also deliver for women and girls.
Secondly, governments need to free up women’s time by easing millions of unpaid hours they spend every day caring for their families and homes. They should invest in public services, including water, electricity and childcare that reduce the time needed to do this unpaid work. All public services should be designed in a way that works for those with little time to spare.
Thirdly, governments should end the under-taxation of the rich individuals and corporations. Tax avoidance and evasion by corporates and the super-rich must be eliminated. A new set of global rules and institutions should be agreed upon to fundamentally redesign the tax system to make it fair, with developing countries having an equal seat at the table.
In short, governments should pull out all the stops to reverse this troubling economic trend in order to take the world to greater equality in both income and wealth.
Umar Aman completed masters in History from Jamia Millia Islamia, New Delhi, with special focus on Modern Indian History. Presently, he works for several NGOs and writes for magazines and news portals.
Cafe Dissensus Everyday is the blog of Cafe Dissensus magazine, based in New York City and India. All materials on the site are protected under Creative Commons License.
Read the latest issue of Cafe Dissensus Magazine, “Revisiting the Partition of India”, edited by Kamayani Kumar, University of Delhi, India.