Why do 62 People Own Half of Planet Earth?
Six years ago, no one could have imagined that only 62 people would now hold the bulk of the world’s wealth. At the time, that title was shared by 388 individuals. In the wake of the global recession, between 2010 and 2015 the staggering gap in wealth and poverty has ballooned at an alarming rate.
Drawing upon research from the Credit Suisse 2015 Global Wealth Databook and the annual Forbes list of billionaires, anti-poverty organization Oxfam determined that the richest 62 people are worth $1.76 trillion, the same amount that the world’s poorest 3.6 billion people collectively possess. The escalating income inequality crisis is even more frightening because those at the top are witnessing their wealth rise while those at the bottom are seeing their buying power drop.
Examining the Widening Wealth Divide
In its latest global income inequality report, Oxfam cites several reasons why 62 people own half the planet. The Swiss nonprofit organization places a large share of the blame on unfair and stagnant low wages. Despite the shockingly widespread layoffs and steep financial hits big businesses sustained throughout the recession, CEO salaries have skyrocketed. Many of the top U.S. firms are now shelling out an additional 54 percent to its chief executives.
In contrast, the federal minimum wage has not budged since 2009. The U.S. Census Bureau notes that the median income for Americans has only increased from $49,445 in 2010 to $53,657 in 2014. Throughout the rest of the world, 71 percent of the population lives on less than $10 per day.
The growing global crisis, the group says, is also the result of widespread tax dodging. The legal yet controversial practice of hiding money offshore has resulted in evaders depriving governments of collecting an extra $190 billion each year. This has contributed to a lagging investment in public services that tackle poverty and inequality.
“The current system did not come about by accident,” notes the Oxfam report. “It is the result of deliberate policy choices, of our leaders listening to the 1 percent and their supporters rather than acting in the interests of the majority … The global economy is not working to pull people out of extreme poverty.”
A Bigger Issue Than Rich and Poor
Economists note that the type of wealth the rich and poor possess is vastly different. The billionaires and millionaires of the world have amassed their fortunes primarily by building upon financial assets, such as stocks, partnership shares, dividends and interest payments. Since the rebounding economy is not growing as quickly as investments, the rich are seeing enormous amounts of financial assets stockpiling in their accounts.
However, the wealthy do not trade in actual money but rather upon printed certificates that prove their net worth. Meanwhile, the average person must rely on the actual cash in hand to purchase the everyday necessities that they need to survive — housing, food, gas and clothing. During the recession, working-class Americans took huge credit score hits as they defaulted on mortgages, car payments and credit cards, damaging their ability to access traditional loans. Left with no property and decimated savings accounts, few can afford to pay upfront for the unexpected things they need, such as car repairs or medical bills.
Advocating for Financial Responsibility
Oxfam has proposed several solutions to fixing the global epidemic of financial disparity. Protecting workers’ rights to unionize provides the best opportunity to earn fair living wages. Additionally, instead of placing the tax burden on the shoulders of labor and consumption, governments need to shift their attention toward wealth and capital gains. The group also advocates implementing regulations that minimize the political power big businesses and lobbyists have over governments.
Promoting equal rights for women concerning wages, inheritance and land ownership must also be addressed. The Institute for Women’s Policy Research puts the wage gap between male and female full-time workers at 21 percent. This is true across nearly all occupations despite women making up almost half of the workforce and having more education than men. Today, just 24 women have been appointed CEO to run an elite Fortune 500 company. Of the 62 richest people in the world, only 9 are women. This limited group includes the daughters of the man who launched Walmart, L’Oreal founder Liliane Bettencourt and media mogul Anne Cox Chambers.
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