NEW YORK (CBS NEWS) — Wealth inequality is growing to bigger extremes, with the world’s 2,153 billionaires now claiming as much wealth as 60% of the world’s population, or 4.6 billion people, according to a new report from anti-poverty group Oxfam.
The number of billionaires has doubled in the past decade, thanks partly to government policies such as the 2017 U.S. tax overhaul, which cut taxes for America’s rich and corporations, as well as the strong stock market, the report noted. But that’s creating a global economy where the ultra-rich are increasingly veering off from the rest of the world’s population, Oxfam says.
Its report will be released at the World Economic Forum in Davos, Switzerland, which begins Tuesday and draws many of the billionaire class that’s singled out in the report. This year, 119 of the world’s richest people — including Bridgewater Associates LP founder Ray Dalio, worth more than $16 billion — will be in attendance, representing a net worth of more than $500 billion, according to Bloomberg News. The conference’s theme this year is “Stakeholders for a Cohesive and Sustainable World,” and panels will include topics such as inequality and climate change.
Presenting Oxfam’s annual report on the widening wealth disparities across the globe “is an opportunity to speak truth to power,” said Oxfam America policy director Gawain Kripke in an interview. The reception in past years has been “mixed. There is interest in it, but also resistance and criticisms.”
Since Oxfam started studying the dynamics of wealth inequality in 2011, the wealth concentration at the top has only intensified, Kripke said. That stems from dynamics such as stagnant wages for the typical worker, combined with the 2017 tax changes that slashed U.S. tax rates for the very rich and corporations.
For instance, average wages in the Group of Seven countries — developed economies including the U.S., Canada and Germany — rose 3% from 2011 to 2017, Oxfam said. But during that same period, stock dividends rose 31%, a trend that favors the wealthy given that the richest 1% own half of all stocks.
Examining women’s unpaid work
This year’s Oxfam report also examines the role of gender in income and wealth inequalities, given that women and girls provide much more unpaid work than men. Caring for family members, cooking and cleaning are tasks that are typically performed on an unpaid basis by women and girls, who effectively provide a subsidy of $10.8 trillion to the world’s economy.
“We estimate in the U.S. that women are providing about $1.4 trillion dollars worth of labor in unpaid care and domestic work,” or almost twice the federal defense budget, Kripke said. He added that the estimate is based on women earning the federal minimum wage of $7.25 an hour, which he said is likely a lowball figure given fewer and fewer workers in the U.S. today earn a wage that low.
Because the issue of women’s unpaid work is largely ignored by policy makers, it’s an often invisible element in income and wealth inequality, he added. “It doesn’t count in GDP, but it’s essential to a country’s functioning,” Kripke added. “That women provide such a large fraction of this means that women are disadvantaged by this situation.”
About 4 of 10 women globally don’t participate in the paid labor market because of the demands of this unpaid work, Oxfam said. By comparison, fewer than 1 in 10 men are in the same situation.
Huge wealth inequality isn’t healthy for an economy because it can stifle growth for other income groups and lead to social unrest, Kripke said.
“A billionaire is created every two days. Is that sign of health or disease?” Kripke asked. “We think it’s a sign of disease.”
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