A recent report by Oxfam paints a stark picture of soaring inequality, highlighting how the wealth of the world’s five richest men has doubled since 2020, reaching a staggering $869 billion, while nearly five billion people have been pushed further into poverty.
Titled “Inequality Inc.,” the report was released just before the annual World Economic Forum (WEF) meeting in Davos. It reveals a concerning trend: billionaires are not only becoming richer, but their influence on major corporations is growing.
The report finds that seven out of the ten biggest companies globally are either run by or have a billionaire as their main shareholder. Since 2020, despite global economic crises like the COVID-19 pandemic, billionaires have amassed an additional $3.3 trillion in wealth.
The fortunes of the top five richest individuals, including Elon Musk, Bernard Arnault, Jeff Bezos, Larry Ellison, and Warren Buffett, have skyrocketed by 114% in real terms since 2020. This staggering growth stands in stark contrast to the plight of millions struggling to make ends meet due to rising inflation and a cost-of-living crisis.
“We cannot continue with these levels of obscene inequality,” said Amitabh Behar, the interim Executive Director of Oxfam International. “This shows that capitalism is serving the super-rich at the expense of everyone else.”
Oxfam urges governments to take action by curbing corporate power through measures like breaking up monopolies, introducing taxes on excess profits and wealth, and exploring alternatives to shareholder control, such as employee ownership models.
The report estimates that 148 top corporations raked in $1.8 trillion in profits, a 52% increase over the past three years. This windfall has fueled hefty payouts to shareholders while millions of workers face real wage cuts due to inflation.
“This inequality is no accident,” Behar emphasized. “The billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else.” The report underscores this point by highlighting that the world could have its first trillionaire within the next decade, while ending poverty would require 230 years.
Oxfam criticizes intensive lobbying by corporations that has resulted in lower corporate tax rates, depriving governments of vital resources to support the most vulnerable sections of society. Corporate taxes in OECD countries have plummeted from 48% in 1980 to 23.1% in 2022.
The WEF promotes “stakeholder capitalism,” which envisions corporations fulfilling human and societal needs beyond just maximizing shareholder returns. However, Oxfam’s report, based on data from various sources including the International Labour Organization, World Bank, and Forbes, exposes the vast gap between this ideal and reality.
“We know for sure that today’s extreme system of shareholder capitalism, prioritizing ever-increasing returns to rich shareholders above all else, is driving inequality,” stated Max Lawson, Oxfam’s Head of Inequality Policy.
The report further reveals that nearly 800 million workers have seen their wages erode due to inflation in the past two years, translating to an average loss of 25 days of annual income per worker. Only 0.4% of the world’s 1,600 largest corporations have publicly committed to paying a living wage to their employees and supporting living wages within their supply chains.
Adding to the global disparity, Oxfam highlights those rich countries in the Global North, representing just 21% of the global population, control 69% of global wealth and house 74% of the world’s billionaire wealth.
The ongoing war in Ukraine has further exacerbated the situation, disproportionately impacting poorer nations with rising energy and food costs.
“We are witnessing the dawn of a decade of division,” warned Behar. “Billions of people are bearing the brunt of economic shocks caused by the pandemic, inflation, and war, while the fortunes of billionaires continue to explode.”
This report serves as a wake-up call, urging urgent action to address the widening wealth gap and build a more equitable and just world.