A recently published report titled, “Billionaire Bonanza 2017: The Forbes 400 and the Rest of Us,” exposes the extreme wealth concentrated within the fortunes of the 400 wealthiest Americans compared to the much more meager assets of working families. This is yet another piece of evidence confirming the decades-long trend of growing income inequality in the U.S. According to economists, that inequality will be greatly exacerbated by the new Republican tax reform legislation which was recently signed into law by President Trump.
As the world’s wealthy elite, including Donald Trump gathered in Davos, Switzerland in mid-January for the annual World Economic Forum, the anti-poverty group Oxfam released its new report titled, “Reward Work, Not Wealth,” which reveals how the global economy enables a wealthy elite to accumulate vast fortunes while hundreds of millions of people are struggling to survive on poverty pay. Among other disturbing data points, the report found that “82 percent of the wealth generated in 2017 went to the richest 1 percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth,”
Between The Lines’ Scott Harris spoke with Paul O’Brien, vice president for policy and advocacy with Oxfam America, who summarizes some of the main findings in the Oxfam report, including the drivers of growing global wealth inequality, and potential remedies.
PAUL O’BRIEN: We’ve been looking at structural inequality for about five or six years now, and the extent of both extreme poverty and extreme wealth. And one of the things we’ve done each year as Davos has come together is to ask how many of the richest people on the planet does it take to have the same amount of wealth of the poorest half of the planet? This year that number is 42 people. So the 42 richest people have the same wealth as the poorest half of the planet, which is 3.7 billion people.
The thing that we’ve found in our report this year that was most troubling to us is what had happened to the increase in wealth since the last time we did the report. Our analysis is that 82 percent of the wealth that generated last year went to the top 1 percent, while the poorest half of the world, the people we care about, got basically nothing. No increase in wealth. That’s the core finding.
BETWEEN THE LINES: I think there’s a lot of superficial discussion about inequality here in the United States. And you always here these “neutral” commentators talk about inequality as if it was an act of God, or a natural disaster of some kind beyond human control. Obviously, that’s not the case. So I wondered if you’d put into context for us the causes of this rising inequality.
PAUL O’BRIEN: Certainly, so, from our perspective, we see inequality as a structural phenomenon that is a consequence of basically institutional failure. It’s either the failure of governments to regulate corporations or its the acts of corporations to find ways to ensure they are the beneficiaries of under-regulation or bad regulation.
We have a context now in the United States. Most people don’t recognize how unequal the United States is, where the wealthiest one percent of Americans now own 40 percent of the country’s wealth. That’s the highest share that it’s been in the last 50 years. President Trump like to talk about the massive increase in wealth that has taken place in the American stock market. I h heard him in Davos say that now, see there’s an extra $7 trillion’s worth of wealth.
In the United States, the wealthiest 10 percent owns 84 percent of stocks. The top 1 percent owns 40 percent of stocks. So what we have is an economic structure where it’s getting harder and harder if what you do is just go to work everyday and work hard, but you don’t already own wealth or own stocks to lift yourself out of poverty. Whereas, if you are already extremely wealthy, you don’t have to do a lot in order to become wealthier still.
BETWEEN THE LINES: Your report, “Reward Work, Not Wealth” talks about some antidotes and specifically, Oxfam has called for certain policy changes at the governmental level, including changes in minimum wage policy, the gender pay gap, and fair taxation. Would you summarize some of those for us?
PAUL O’BRIEN: Well, those are very good to start with. There’s going to be sort of three sets of responsibilities. We’re gonna need more effective and progressive taxation that targets wealth that is not working hard enough and then ultimately puts in places where it could work much better. One of the ideas that we’re pushing because we’ve seen this billionaire boom in the last year, and just to put a number on that, since the last time we did the report, there’s been a new billionaire born every 48 hours. We estimate that if you put a tax on the wealth of billionaires of 1.5 percent, you could pay for every child to go to school everywhere in the world.
So would like to see a wealth tax taken seriously. This was put forward a few years ago by Pickety in his book, “Capital.” There’s been a robust discussion amongst economists, and so there’s no good reason we can see why there’s not a globally imposed wealth tax.
We’re also deeply concerned that public spending for both to strengthen the opportunities for women generally, but in health and education are under-invested in, in just about every country that we looked at with very, very few exceptions. And then as you mentioned, labor policies and making sure that people are protected in the workplace, are not discriminated at in the workplace, and are given the opportunity through hard work and innovation to lift themselves from poverty. For us, unfortunately, in many of the countries we work in, we’re seeing things go in the other direction.
So, what we’re seeing in many of the countries where we’re working in, is hard-working people doing their best to lift themselves out of poverty. But the policies on labor, on taxation and on spending are not giving them the opportunities they need to lift themselves and their families out of poverty. And we want a more serious conversation about it – both amongst policymakers, amongst the wealthy, and among the kinds of people who are listening to your show.
For more information visit Oxfam.org at oxfam.org; Oxfam America at OxfamAmerica.org.
