January rolls around again, the World Economic Forum gathers at Davos, and Oxfam release their latest work on inequality. I’ve been wondering how long Oxfam could continue to get headlines with this strategy, but then every year the figures get worse. And every year our leaders talk more about inequality without doing anything about it. So why not keep on highlighting it?
This year’s ‘killer stat‘ is that 82% of the wealth generated last year went to the richest 1% of the world’s population. That’s $762 billion created between March 2016 and March 2017, enough to end extreme poverty seven times over.
The flipside of that is that the poorest half of the world’s population got exactly 0% of the new growth.
To me, it’s the second statistic that’s the more powerful one. If we focus on the rich getting richer, it’s easy for people to say that we’re motivated by envy, and that we’re anti-wealth and want the world to be poorer – see the rush of anti-Oxfam articles on the Institute of Economic Affairs this week.
The second statistic shows that we can’t just carry on as if everything’s fine, and wait for wealth to trickle down. It isn’t trickling down fast enough. The report behind Oxfam’s statistics, Reward Work, Not Wealth, points out that if you are among the poorest 10% of people, your income will have improved by less than $3 in the last 25 years. As they say, “this is a deeply inefficient way to eliminate poverty.”
More to the point, if making people a tiny bit less poor means giving the rich infinite increases in wealth and consumption, we will run out of planet long before we end poverty. To raise everyone in the world to the (still miserable) level of $5 a day, the global economy would need to be 175 times larger than it is today. This, I shouldn’t need to tell you, is impossible.
In words that echo the title of this blog, Oxfam’s Nick Bryer puts it succinctly: “What has become increasingly clear over the years however, is that there’s no way we’re going to end poverty unless we tackle extreme wealth too. They are two sides of the same coin.”
- You can download the report here.