Income Inequality: it’s worse than you thought


The extent to which America’s colossal income gap between the rich and everyone else is on the dramatic rise has managed to garner a considerable amount of press coverage in the past few years, due in large part to the “Occupy Wall Street” Movement of 2011-2012 (a movement that, while short-lived, had a great effect on the national political narrative). But what hasn’t drawn nearly the same amount of attention is just how dyer the circumstances are on an international scale. The raw numbers and statistics showing just how much money the world elite have been funneling for themselves at the expense of everyone else will surely astound you!

In advance of the World Economic Forum‘s winter Conference (more like a retreat) held annually for the world’s economic elite in Davos, Switzerland from January 22-25, Oxfam International released a devastating report that demonstrated in full detail how the world-wide wealth disparity between rich and poor is at an all-time high, and the problem doesn’t seem to be improving. The report, titled Working for the Few: political capture and economic inequality, contains many startling revelations, not least of which is the fact the 85 richest people on the globe currently own the same amount of wealth as the poorest 50% of the entire world population combined. Think about that for a moment. Just a mere 85 people have as much money as the world’s poorest 3 ½ Billion people combinedThis incomprehensible trend is on the sharp rise as “the richest undermine democratic processes and drive policies that promote their interests at the expense of everyone else.”

“Since the late 1970s,” the report continues, “tax rates for the richest have fallen in 29 of the 30 countries for which data are available, meaning that in many places the rich not only get more money but also pay less tax on it.” Other factors contributing to the more recent swelling of the income gap which fall into the category of “policies successfully imposed by the rich” included “financial deregulation, tax havens and secrecy, anti-competitive business practices, lower tax rates on high incomes and investments and cuts or underinvestment in public services for the majority.” It’s also worth noting that “the percentage of increase in share of income of the richest one percent” from the years 1980-2012 was by far the most extreme in the United States, followed up next by Australia. Likewise, “the share of national income going to the richest one percent” increased exponentially in the U.S. from the years 2008-2012. (In other words, what is this nonsense we’ve been hearing about a “socialist” president again?!?)

For the World Economic Forum‘s part, a spokesman said on its behalf that “the chronic gap between the world’s richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decades.” Left unsaid in this tepid response, however, is that many of the individuals whose influence the Oxfam report so critically derided make up a large part of the W.E.F. Conference’s attendees.

Oxfam International’s entire report, Working for the Few: political capture and economic inequality, can be read in full by visiting the organization’s website. Some of its highlights include the following:

  • Almost half of the world’s wealth is now owned by just one percent of the population.
  • The wealth of the one percent richest people in the world amounts to $110 trillion. That’s 65 times the total wealth of the bottom half of the world’s population.
  • The bottom half of the world’s population owns the same as the richest 85 people in the world.
  • Seven out of ten people live in countries where economic inequality has increased in the past 30 years.
  • The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012.
  • In the U.S., the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.

Several policy measures have also been suggested as possible remedies to the problem which could, at the very least, prevent the crisis from worsening further:

  • Cracking down on financial secrecy and tax dodging;
  • Redistributive transfers; and strengthening of social protection schemes;
  • Investment in universal access to healthcare and education;
  • Progressive taxation;
  • Strengthening wage floors and worker rights;
  • Removing the barriers to equal rights and opportunities for women.

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