Azerbaijan - Asian Business News and Tenders
The Richest 62 People Own More Than The Poorest 50% Combined
January 21, 2016
Income inequality in the world is getting worse and is bringing with it further damage to the poorest of the world's population.
These figures were announced by anti-poverty charity Oxfam in connection with the latest World Economic Forum in Davos, Switzerland. It was a way to drive home the point about how bad income equality is becoming worldwide.
The better truth of this is the situation is not just bad but that it is also getting worse.
Five years earlier, for example, it took the top 388 wealthiest people’s combined balance sheets to equal the total held by the poorest 50%. Since that time the top 62 people in this year’s analysis have done quite well, increasing their net worth by 44% or around half a trillion dollars. The bottom half is now ‘worth’ approximately a full trillion dollars less than five years ago.
Calculating it another way, the top 1% of all individuals now owns more than the entire bottom 99% combined.
With this big a gap between the rich and the poor, it is no wonder that the poor cannot see any way to ever escape the poverty trap. With the rich in charge, what is widely referred to as ‘the new golden rule’ (that ‘those who have the gold make the rules’), the game is already rigged and getting even more constricted to protect the wealthy and abuse the poor.
As just one example of how this manifests, consider the now vast web of means by which both companies and individuals are able to shelter funds offshore and avoid taxation or in many cases even reporting. Even with choice of the word ‘shelter’ is an odd oxymoron here. For the wealthy, the total ‘hidden’ net worth of an estimated $7.6 trillion dollars, more than the total GNP of the United Kingdom and Germany combined, might be considered ‘sheltered’ by taking it offshore. For the poor, a far more accurate term for what is going on is that the modern robber barons are hiding money wherever and whenever they can.
And who created those rules that allow that sheltering or hiding of funds to take place? The same wealthy group that is benefiting from it. The end result is widespread legal tax evasion as just one outcome.
With such a concentration of financial power in the hands of so few people at the top, political power is also distorted and even governments find themselves powerless to act to deal with it. Recent investigative cases involving governments trying to access what they see as illegitimate use of local and regional tax laws are running into brick walls. The consequences are to protect both individuals throughout the world and companies as varied as Starbucks and Apple, both of which make use of complex legal structures to do things like income-shifting and tax avoidance on a grand scale.
When the true costs of income equality are calculated, they sum up to things that in the long run are even more serious than the numbers alone show. Behaviors change both at the individual and corporate levels, giving each less reason to care about where they reside or do business unless it results in a financial gain. The wealthiest also have more ability than most to move their investments, in the event local entities try to take actions to provide more equitable treatment in their territories. This can create havoc in those local areas, destroying the tax basis for the governments involved, something they can rarely afford, and creating mass unemployment. It is a form of power the poor can only dream of.
This is also part of why many feel real economic growth in some of the poorest regions in Asia and Africa, especially at the grass roots levels of the poorest on the planet, may stay stuck for a very long time.