Inequality

  • The widening gap between the world’s richest and poorest people is tearing societies apart. Too many still toil in extreme poverty. In contrast, wealth is increasingly concentrated in the hands of a few, who can use it to capture disproportionate power to shape the future. The widening gap between the richest and poorest is damaging economies and pushing more people into poverty. There are practical ways to close the gap.

“I can starve, but my children can’t” – The true cost of inequality

The figures are staggering. Eighty-two percent of the wealth generated in 2017 went to just one percent of the world’s population. In contrast, the 3.7 billion people who make up the poorest half of the world didn’t make a penny more. 

Not only that, billionaire wealth grew by $762 billion – that’s enough money to stamp out extreme poverty seven times over. Last year also saw the biggest-ever increase in billionaires, with one person becoming a member of the super-rich club every two days. Moreover, nine out of 10 of these new billionaires were men. Meanwhile, behind the scenes, women provided $10 trillion in unpaid care to support the global economy.

But these are just numbers. The true cost of inequality is revealed through the testimonies of women like Lan. Her story shows the reality of a truly unjust global village, where a small minority controls the majority of the wealth.

Lan is 32 and a mother of two. Her husband can’t work due to illness so she is the family’s sole breadwinner. Her job in the garment industry in Dong Nai province, near Ho Chi Minh City, Vietnam, is both exhausting and insecure.  She works at least nine hours a day, six days a week, earning just $1 an hour, to make shoes for global fashion brands. Despite working on 1,200 pairs of shoes a day, she can’t afford to buy even one pair for her 12-year-old son.

Worse still, she is separated from her son and her 15-month-old daughter who live 1,500km away in her home province of Thanh Hoa, where her parents look after them. Lan moved away to work so that her children could have a better future – but her low wages and the high cost of living means that she can’t afford for them to live with her full time. Organising regular visits home is almost impossible too because travel is expensive and Lan is rarely able to take annual leave.

Lan soothes her 15-month-old daughter Ha* in the small room she rents in Dong Nai province near Ho Chi Minh City, Vietnam. Ha*, who has been struggling in her mother’s absence, had to take a 34-hour bus ride with her grandmother to visit Lan. Photo: Sam Tarling/Oxfam

Lan and her 12-year-old son Sang* play with a kitten at her parents’ house in Thanh Hoa province. It’s the first time she has seen her family in nine months. Photo: Sam Tarling/Oxfam

"It’s hard because my children cannot live with me,” says Lan. “I feel very sorry for my children. They always ask to come here, but I don't allow it. I cannot afford to raise them here. My son really wants to come live with me and study here. 

“They have to be left with relatives because I don’t have enough money to feed them and pick them up from school. I miss them as I’m far away. I want to be close to my children. 

“It’s hard to say goodbye to kids because they want me to stay. When I’m back at home, I think about my children and I do not want to leave them and go back here to work.”

 She adds:  “I can’t let my children starve or feel that they are not as good as other kids. Well, my kids are not equal to other children because we don’t have money. I can starve, but my children can’t.

 "In my future, I want to work close to home with a steady salary so I can be close to home, close to my children so I can care for them and they can be like their friends. I want to work the hours which have better pay, so I can have my children with me and I can raise them well with good educations. I want my children to be close to their parents so they can have a better life.”

Inequality is keeping people trapped in poverty, but together we can fight it. 

Please join our campaign to Even it Up. 

Thank you. 

*Names have been changed 

More than 80% of new global wealth goes to top 1% while poorest half get nothing, new Oxfam report reveals

Oxfam campaigners set up an ‘inequality restaurant’ in Belfast city centre

Eighty-two percent of wealth generated last year across the world went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half saw their wealth flatline, according to a new Oxfam report published today.

Reward Work, Not Wealth sets out how the very biggest gains were made by billionaires. Oxfam said it was unacceptable and unsustainable for our economies to continue to enable a super-rich minority to accumulate vast wealth while hundreds of millions of people struggle to survive on poverty pay. It called for a rethink of legal and business models that prioritise shareholder returns over broader social impact.

As political and business elites gather in Davos for the World Economic Forum, Oxfam campaigners in Belfast city centre set up a mini restaurant – with unequal servings – to illustrate the huge gap between rich and poor.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “Something is very wrong with a global economy that allows the one percent to enjoy the lion’s share of increases in wealth while the poorest half of humanity miss out.

“In the 12 months to March 2017, billionaires’ fortunes grew by a staggering £585 billion [$762 billion] – enough to end extreme poverty more than seven times over.”

Oxfam has previously identified the role of tax dodging in driving inequality. This year its report highlights how the excessive corporate influence on policy-making, erosion of workers’ rights and relentless drive to minimise costs in order to maximise returns to investors all contribute to a widening gap between the super-rich and the rest.

Billionaire wealth rose by an average of 13 percent a year between 2006 and 2015 – six times faster than the wages of ordinary workers. It takes just four days for a CEO of one of the world’s five biggest fashion retailers to earn as much as a Bangladeshi garment worker will earn in her entire lifetime.

Women consistently earn less than men and are concentrated in the lowest-paid, least-secure forms of work. At current rates of change it will take 217 years to close the global gap in pay and employment opportunities between women and men. Oxfam has heard from women in Vietnamese garment factories whose low wages force them to live apart from their children, women in the US poultry industry who wear nappies because they are denied toilet breaks, and women working in hotels in Canada and the Dominican Republic who stay silent about sexual harassment for fear of being fired.

Clarken added: “The world has made huge strides forward in ending poverty but progress could be even faster if we did more to break down the barriers that are holding back the world’s poorest people. For work to be a genuine route out of poverty we need to ensure that ordinary workers receive a living wage and can insist on decent conditions, and that women are not discriminated against. If that means less for the already wealthy then that is a price that we – and they – should be willing to pay.

“Leaders should ensure that wealthy individuals and businesses pay their fair share of tax by cracking down on tax avoidance, and invest this into essential services like schools and hospitals, and creating jobs for young people.”

A new survey of 70,000 people in ten countries, including the UK, demonstrates huge support for action to tackle inequality. Nearly two-thirds of people – 72 percent in the UK – say they want their government to urgently address the income gap between rich and poor in their country. In the UK, when asked what a typical British CEO earned in comparison to an unskilled worker, people guessed 33 times as much. When asked what the ideal ratio should be, they said 7:1. In some sectors the reality can be very different. FTSE 100 bosses, for example, earn on average 120 times more than the average employee.

Clarken added: “Many leaders say they’re worried about the corrosive effect of inequality but their tough talk too often fades away at the first resistance. Some companies and wealthy individuals are taking steps towards fairer ways of doing business but too many others use their power to protect their own interests. To really transform our economies, we need to look again at the business models and laws that prioritise shareholder returns above wider social benefit.”

Tax avoidance by businesses and wealthy individuals is estimated to cost developing countries and poor regions $170 billion a year – money that could be used to fight poverty and provide public services. In the UK, Oxfam is urging the government to help fight tax dodging by using its upcoming Sanctions and Anti-Money Laundering Bill to ensure that Britain’s overseas territories publish the owners of companies incorporated on their shores. The Paradise Papers revealed the key role that UK-linked tax havens such as Bermuda play in facilitating global tax avoidance.

ENDS

SUGGESTED CAPTION: Table for one percent... Ahead of this week’s meeting of the world’s elite in Davos, Oxfam campaigners on inequality set up a mini restaurant in Belfast city centre to illustrate the huge gap between rich and poor. Eighty-two percent of new global wealth last year went to the richest one percent, while the poorest half saw no increase, according to a new Oxfam report. Photo by Press Eye/Darren Kidd.

More photos available for media use via: https://oxfam.box.com/v/BelfastPhotoStuntDavos2018

Oxfam spokespeople are available for interview. For interviews or more information, contact:

Phillip Graham on 07841 102535 / phillip.graham@oxfamireland.org

NOTES TO EDITORS

Inequality in numbers:

·         In 2017 it took just three days for the UK’s top bosses to make more money than the typical UK full-time worker will earn all year, according to The High Pay Centre.

·         In Nigeria, the legal minimum wage would need to be tripled to ensure decent living standards.

·         Eighty-two percent of new wealth last year went to the richest one percent, while the poorest half’s share of wealth flatlined.

·         Last year saw the biggest increase in the number of billionaires in history, with one more billionaire created every two days. There are now 2,043 dollar billionaires worldwide.

·         The increase in billionaires’ wealth in the year up to last March was enough to end extreme poverty more than seven times over.

·         In the period between 2006 and 2015, ordinary workers saw their incomes rise by an average of just 2% a year, while billionaire wealth rose by nearly 13% a year – almost six times faster.

·         By the end of the 4-day Davos meeting, billionaires’ fortunes could swell by an estimated $8 billion. This is enough money to lift 66 million people out of poverty for the year.

·         A CEO of one of the world’s five biggest global fashion retailers earns as much in four days as a Bangladeshi garment worker will earn in her entire lifetime

·         At current rates of change it will take 217 years to close the gap in pay and employment opportunities between women and men.

·         Cracking down on tax avoidance by wealthy corporations and individuals could save developing countries and the world’s poorest regions an estimated $170 billion a year – money desperately needed for schools and hospitals.  

The embargoed report and methodology are available for download. https://oxfam.app.box.com/s/eosi27xj7nxuyywysr06d734ct1xyuev

Table showing distribution of new global wealth: https://drive.google.com/file/d/15NMFNjFFWQCyimLPK_V3eAF0stTVn3md/view

Case study footage and photos available: Lan, a worker in a Vietnam factory supplying global fashion brands, sews 1200 pairs of trainers a day for around $1 [74p] an hour. https://wordsandpictures.oxfam.org.uk/?c=34775&k=ae837a41d2

Reward Work, Not Wealth will be published online. The report includes case studies of workers around the world interviewed by Oxfam about their pay and conditions.

See the report and methodology note for more information about Oxfam’s statistics.

·         Calculations are based on global wealth distribution data provided by the Credit Suisse Global Wealth Data book 2017. The wealth of billionaires was calculated using Forbes' billionaires list last published in March 2017.

·         The real increase in global wealth between July 2016 and June 2017 was $9.2 trillion [£7.3 trn], of which $7.6 trillion [£6 trn] (82 percent) went to the top one percent of the population and the remainder to the rest of the top 20 percent.

·         The top five largest publicly listed apparel retailers (excluding department stores) by sales are listed on the 2017 Forbes Global 2000 list of The World’s Biggest Public Companies.

·         Oxfam uses World Bank data to calculate how much it would cost to raise the income of everyone living in extreme poverty to above $1.90 a day. This is only one measure - ending poverty will require a range of actions.

·         RIWI and YouGov conducted the online survey of 70,000 people in ten countries: India, Nigeria, United States, United Kingdom, Mexico, South Africa, Spain, Morocco, Netherlands and Denmark. In the UK 3,016 adults were surveyed online and the sample size for the control group was 1,004 adults. Fieldwork was undertaken between October and November 2017. The figures are representative of all GB adults (aged 18+).

The High Pay Centre has calculated ratios for UK CEO to worker average wages.

The UN estimates that tax avoidance by businesses costs developing countries $100bn a year. Economist Gabriel Zucman estimates that the world’s poorest regions – Africa, Asia and Latin America – lose $70bn in annual revenue due to wealthy individuals’ use of tax havens.

The Sanctions and Anti-Money Laundering Bill is expected to reach Report Stage in the House of Commons in March. Oxfam is urging the government to accept an amendment that would ensure Britain’s overseas territories publish public registers of beneficial ownership of companies.

The sterling conversion of $762bn to £585bn was calculated based on the average FX rate GBP:USD between 1 April 2016 and 31 March 2017.

First EU tax haven blacklist names 17 countries

Oxfam calls on Irish Government to tackle tax avoidance at home and globally
 
5th December 2017
 
EU finance ministers including Minister Paschal Donohoe have today adopted the first EU blacklist of tax havens. The list includes 17 mostly small countries. The EU has also published an additional grey list of countries that currently qualify as tax havens but have promised reforms.
 
The blacklisting process considered non-EU member states only. 
 
Reacting to the news, Oxfam Ireland Chief Executive Jim Clarken said: “We welcome the EU’s commitment to addressing the damage done by tax havens and this first concrete step towards tackling tax avoidance. However, it is worrying to see that some of the most notorious tax havens got away on the grey list. 
 
“Placing countries on a grey list shouldn't just be a way of letting them off the hook, as has happened with other blacklisting efforts in the past. The EU has to make sure governments on the grey list follow up on their commitments, or else they must be blacklisted.
 
“It’s a sad irony that if the EU were to apply the criteria to its own member states, Ireland, along with three EU countries; Malta, the Netherlands and Luxembourg would be blacklisted too. While we welcome Minister Donohoe’s support for the blacklisting process, we continue to call for him and the Irish government to tackle tax avoidance at home as well as globally. 
 
Specifically, we need the government to be proactively engaged in tackling existing tax avoidance mechanisms which Ireland is inadvertently facilitating. 
 
The EU’s list was established following a screening and a dialogue conducted during 2017 with a large number of third country jurisdictions. Those that appear on the list failed to take meaningful action to address deficiencies identified and did not engage in a meaningful dialogue on the basis of the EU’s criteria. Work on the list started in July 2016 within the Council's working group responsible for implementing an EU code of conduct on business taxation, in coordination with its high-level working party for taxation.
 
Last week, Oxfam published the report ‘Blacklist or whitewash?’, showing what a robust blacklist of tax havens would look like if the EU were to objectively apply its own criteria and not bow to political pressures. Oxfam concluded that at least 35 non-EU countries should be included in the EU tax haven blacklist. In addition, four EU member states fail the EU’s own criteria: Ireland, Luxembourg, the Netherlands and Malta. 
 
ENDS
 
Daniel English
Oxfam Ireland
086 3544954
 
Photos and TV-quality video footage of today illustrating a tax haven in Brussels are available and can be used by the media for free.
 
An interactive map shows the 39 countries listed in the report and explains why they should have been blacklisted by the EU.
 
The EU committed to a blacklist process in the wake of scandals like the Panama Papers and Lux Leaks that showed how tax havens let the companies and the super-rich get away with billions in unpaid taxes. The EU blacklist is based on three criteria: transparency, fair taxation, and participation in international fora on tax.
 
The EU’s blacklisting negotiations have taken place behind closed doors, and countries participating in the talks have refused to answer questions. The process has been in the hands of one of Brussels’ most secretive working bodies, the so-called Code of Conduct Group, which insists on its work being confidential.
·         86% of European are in favour of “tougher rules on tax avoidance and tax havens”, while 8% are “against the idea” according to the Standard Eurobarometer, published in July 2017.
·         Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging. $100 billion could provide an education for 124 million children and pay for healthcare services that could prevent the deaths of at least six million children annually.  There are 124 million children out of school. The annual domestic financing gap to achieve universal education in low and low middle-income countries is $39 billion per year. $32 billion would fund the key healthcare to prevent the deaths of 6 million children each year.
 
Following the Paradise Papers scandal, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that naming countries such as Ireland and the Netherlands that have been key players in the Paradise Papers scandal.

 

The World’s Rainy Day Fund

Right now, across the world, millions of people are in desperate need due to a deadly combination of conflict and drought. It seems unimaginable that it could happen in 2017 – but one in nine people don’t have enough food to eat. 

We are there. We are currently on the ground helping people facing starvation in countries like Ethiopia, Nigeria, Somalia, South Sudan and Yemen. 

Photo: Ilvy Njiokiktjien/Oxfam

These twins – a boy and a girl – were born in Zimbabwe, which last year experienced its worst drought in 35 years. Their mother Judy (36) fears for their future but is holding onto hope. Along with our partners in southern Africa we are working to ensure everyone has access to nutritious food and sustainable food sources – and we’re providing water and sanitation to people affected by the drought too. 

We want to make sure that families like Judy’s always have enough to eat and clean water to drink because these essentials aren’t just for some people, they’re for everyone. 

Our World’s Rainy Day Fund helps brighten the outlook for people in poverty. 

EU must ensure tax haven blacklist is not a whitewash

The EU should resist political pressure and ensure its upcoming blacklist of tax havens objectively reflects the criteria it has itself set if it is serious about fighting tax avoidance, Oxfam said today.

The international organisation said that an honest appraisal of the role that different states play in facilitating tax dodging is crucial if European countries are to effectively tackle a problem that deprives them and poor countries of vital funds that could be used to fight poverty.

Oxfam’s new report, Blacklist or Whitewash?, names the 35 countries that should feature according to the EU’s definition of a tax haven, including six that are linked to the UK: the British Virgin Islands, Cayman Islands, Bermuda, Jersey, Gibraltar and Anguilla.

The EU has excluded member states from its blacklist. Oxfam is also urging the EU to act to reform the tax systems of countries like Ireland, Luxembourg, the Netherlands and Malta, which it found met the criteria for being tax havens.

The EU is expected to publish its blacklist next Tuesday after analysing 92 countries and jurisdictions against criteria including financial secrecy and facilitating profit shifting – but political pressure from inside and outside the EU means some of the world’s most notorious tax havens, such as Switzerland, may be left out.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

Last year more than 300 top economists, including Nobel Prize winner Angus Deaton, warned there is no economic justification for tax havens and urged world leaders to take on the powerful vested interests that benefit from the status quo.

Oxfam is calling on the UK government to take responsibility for its own offshore backyard by requiring Britain’s overseas territories and crown dependencies to publish registers revealing the real owner of companies registered there. None has yet complied with the UK government’s request to do this, first made by David Cameron in 2013. Private registers are not an adequate substitute as they would not be open to full scrutiny, especially by authorities in poor countries.

Oxfam’s report highlights how multinationals are able to use the UK’s overseas territories to shift profits through interest payments on artificial loans between their subsidiaries. Income from interest represented 73 percent of GDP in the Cayman Islands and 40 percent of GDP in Bermuda.

Clarken added: "People are fed up with double standards that mean some companies and wealthy individuals can funnel money through tax havens to avoid paying their fair share of tax, while ordinary people in the UK and overseas are struggling to get by. With growing cross party consensus on this, the Government should not delay further action to end tax secrecy in UK-linked tax havens and to require UK-based multinationals to publish their tax payments in every country they operate."

The EU’s tax haven blacklist is being drafted in secret, which makes scrutiny impossible. Malta has publicly lobbied for an empty list and the Swiss government has announced it does not expect Switzerland to be included.

Oxfam believes the EU’s blacklist criteria are a step in the right direction but should be extended to address other harmful tax practices such as the race to the bottom on corporate tax rates.

To learn more about Oxfam Ireland’s tax justice campaign go to https://www.oxfamireland.org/tax

ENDS

For more information or interviews please contact: Phillip Graham, Oxfam Ireland on phillip.graham@oxfamireland.org / 07841 102535.

NOTES TO EDITORS

The report, Blacklist or Whitewash?, is published online.

Oxfam applied the EU’s own criteria to the 92 countries screened by the EU, and the 28 EU member states. According to Oxfam’s analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist: Albania, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Bermuda, Bosnia and Herzegovina, British Virgin Islands, Cook Islands, Cayman Islands, Curaçao, Faroe Islands, Former Yugoslav Republic of Macedonia, Gibraltar, Greenland, Guam, Hong Kong, Jersey, Marshall Islands, Mauritius, Montenegro, Nauru, New Caledonia, Niue, Oman, Palau, Serbia, Singapore, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, Vanuatu. And four EU member states: Ireland, Luxembourg, the Netherlands and Malta.

Oxfam’s new briefing paper Ending the Tax Scandals sets out five policy measures the UK Government needs to take in order to tackle tax avoidance.

Bermuda topped Oxfam’s list of the world’s 15 worst corporate tax havens, published last year, which also named three other UK-linked territories – the Cayman Islands, Jersey and the British Virgin Islands.

A recent YouGov poll found that almost three quarters of the public think the government should be doing more to tackle corporate tax dodging. There is cross party support for doing more to tackle tax avoidance, including greater transparency for companies and in UK-linked tax havens.

In May 2016, top economists wrote to world leaders to say that tax havens have no economic justification.

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