A new report from Oxfam says that global inequality of individual wealth has skyrocketed in recent years. Here’s one statistic: The world’s count of billionaires has doubled since the financial crisis.
Of the 10 richest people in the world, seven are Americans. Oxfam also found a strong gender gap, with only three women on the list of the world’s 30 richest people. The report’s list of social problems tied to economic inequality is exhaustive: health, education, income opportunity, the gender wage gap, poverty, climate change, and violence.
"The gap between the rich and the poor is spiraling out of control. In fact, the number of billionaires in the world has more than doubled since the financial crisis," said Raymond C. Offenheiser, president of Oxfam America, in a press release. "Far from being a driver of economic growth, extreme inequality is a barrier to prosperity for most people on the planet. It hinders economic growth, corrupts politics, stifles opportunity and fuels instability."
What’s led to such extreme concentrations of wealth? The wealth of the world’s 1,646 billionaires combined is $5.4 trillion—a third of the U.S. yearly GDP—while there 870 million people living in extreme poverty. Oxfam cites two reasons: laissez faire policies and the ability of the wealthy to hold power. Oxfam argues that taxes are being kept low by the economic elite buying political clout with their money.
The report is endorsed by a handful of famed economists, including Nobel laureate Joseph Stiglitz and development economist Jeffrey Sachs—both of whom have been vocal supporters of reducing inequality.
Oxfam's recommendations are also in line with another thinker interested in inequality: Thomas Piketty—whose book Capital in the Twenty-First Century has a lot of smart people discussing whether income inequality is rising and whether a global tax on the super-rich, however politically unfeasible, would ameliorate the current numbers. (If you haven't read the 700 page book, The Economist sums it up nicely in 4 paragraphs.)
Not all super-wealthy people are turned off by Piketty's recommendations: One recent supporter of Piketty? None other than billionaire Bill Gates—who suggests a consumption tax would be more effective, rather than a global tax. Oxfam is calling on governments, as well as the World Bank and the International Monetary Fund, to start with corporate tax dodging. Ireland recently announced it will no longer be a tax shelter—but for Google and other companies currently enjoying the tax break, they won't be kicked out until 2020. Baby steps, but steps nonetheless.
