Oxfam on inequality
[Originally published at foodforthought.blog.lemonde.fr on January 27, 2018]
As it does every year, the world’s political and financial elite is flocking to Davos, Switzerland. As it does every year, Oxfam released its annual report on the state of global inequality. As it does every year, it got worse.
Overall, a decade after the biggest financial crisis since the Great Depression, the world seems to have gotten out of the crisis. Not evenly and not as much as many might have hoped, but out still. Developing countries had rebounded rather quickly, the United States is showing comfortable growth, and even Europe, despite its hampering lack of unified economic and financial decision-making, is showing enough signs of continued growth to leave behind overtly reassuring messages destined to calm nervous markets.
Therefore, the global economy is growing and we are producing extra wealth every year. The pie is growing.
But for every given year, the size of the pie is fixed, and it is distributed among the world’s population. And this is obviously things get less rosy. As it has continuously for the past decades, the bulk of the world’s yearly growth goes to the richest in our societies. And “bulk” is no exaggeration: according to Oxfam, and based on Forbes and Crédit Suisse data, a staggering 82% of the world’s growth goes to the top 1%, while the bottom half sees no increase at all.
Let that sink in for a little bit. You’re in a room with ninety-nine other people and we’ll assume you all have the same working conditions — which, as we all know, is pure fantasy. You all decide to work more than last year. You all work harder. At the end of the year, you collectively make $100 more. One single person will take home $82; forty-nine people will split $18; and the remaining fifty will get nothing. Of course, all the while, inflation has made everyone’s life more expensive.
Overall, the report details that, over the past ten to twelve years, billionaires’ pay has grown six times faster than that of ordinary workers. And that’s just for income.
Two figures sum up the broad state of wealth inequality. The top 1% owns more than the entire remaining 99%. And 42 people own as much as the bottom 3.7 billion people. Forty-two people, down from sixty-one last year. That’s about a small meeting. Or half a train wagon. Richer than half the planet.*
Oxfam’s report goes into a wealth of details, from gender pay and wealth gap, to women’s unpaid care contribution to the economy, to working conditions where people even in developed countries are denied access to the restroom, to supply chain where those at the top make billions on the back of underpaid — and often underage — workers. I will not repeat all their statistics but strongly encourage you to read the report.
I do want to make one point, however. That these continuously-worsening figures on inequality are neither the simple state of nature, nor a fatality. Things were not always this way. Unbridled liberalisation — adopted in Western countries and imposed on many developing countries through international institutions — starting roughly in the 80s is what triggered this situation. Failure to redistribute wealth within societies, lack of investment in publics goods — from infrastructure to education –, generous inheritance laws, lax enforcement of monopoly regulations, undue influence of money in politics, tax cuts for the wealthy and baseless trickle-down policies, absence of concerted and tangible action to finally stem tax evasion; all these are the result of policies we chose. And while political leaders bear a great share of the responsibility, I have argued before that, in democratic systems, citizens cannot escape a share of the blame.
The good news is that, conversely, this situation is not a fatally: we can act and address it. Indeed, the longer we wait, the worse inequality becomes, and the harder it is to address it efficiently and without major upsets to the global economy. Whenever possible, incremental change is easier and favourable to rash, drastic actions. But there is little choice left when imbalances have reached this level.
This is why we can no longer close our eyes to this situation. And I’m not talking about reading about it, talking about it or complaining about it. I mean keeping it in mind when we vote. I mean voicing it out loud to our candidates and representatives. I mean actively voting against those who have perpetuated this system. I mean thinking twice about purchasing items made by companies that maintain and promote this system. I mean understanding that many of us, including ourselves, often benefit from this system and that we must sometimes go beyond our immediate personal interest and understand that we directly stand to gain from improving other people’s lot. That by directly supporting worker’s rights in developing countries, you do not simply create better conditions for them, you also contribute to limiting the race to the bottom that may one day delocalise your own job. That simply because other people lose more, doesn’t mean that you win.
If anything, the Oxfam report shows us that the entire planet — except maybe a train wagon — continuously lose from this. But that we can do something about it.
* I tried to do a graph that would represent this statistic, but this inequality is of such magnitude that my computer could literally not handle the number of items that would be shown to equate one of these forty-two individuals.
Originally published at foodforthought.blog.lemonde.fr on January 27, 2018.