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.

The Oxfam training putting women on the right track

Knowledge is power – just ask these women from Nairobi. They are all members of the Oxfam project, Wezesha Jamii – Swahili for ‘empowering communities’ – which, among others, provides training, supports job opportunities and promotes equality.

The majority of these vulnerable women, who live in informal settlements across the Kenyan capital, are either domestic workers or small-scale traders. Before getting involved in the project, many of them knew nothing about their rights or entitlements – and were often exploited by their employers.

Left: Sheillah Achieng and her baby in their apartment in Mathare, Nairobi, Kenya. Photo: Katie G. Nelson/Oxfam Right: Doreen styles a woman's hair in her salon in Mukuru. Photo: Katie G. Nelson/Oxfam

Sheillah Achieng (28), who left school with few qualifications, says domestic work is the only job she can do. She describes how a former employer once threatened her with a knife when she asked for her wages. But since becoming a member of Wezesha Jamii, she understands that she can go somewhere for help.

“Now I am enlightened and if something similar happened,” says the mother of three. “I would go to the police station. I know there are some offices we can go to.”

The project also taught Sheillah about her rights around maternity leave. Before her youngest child was born, she asked her employer if she could have some time off. “They told me I could have three months… I understood that if you are pregnant you are due some leave. I didn’t know that before."

“I am very happy that I learned my rights about maternity leave. I didn’t know before that three months is my right. Normally you would get two weeks and then find someone in your job.”

The advice she’s received through Wezesha Jamii (WJ) has made Sheillah realise that she wants better treatment at work: “What I want is for more employers to treat us as human beings. I feel very bad to see employers not treating us well. “I feel more confident and I have more energy. I feel encouraged that I know my rights.”

Elsewhere, Doreen Muththoni has tried to make a go of various business ideas down through the years. But from selling bread, to cooking and selling goat meat, she has struggled to earn enough money. After becoming a member of Wezesha Jamii, she was trained in how to develop a good business idea, how to budget and how to manage her money.

Now running a thriving beauty and hair salon, Doreen says: “The project helped me choose the business I could do and one that could bring me more income than the meat business. What I do now is sell hair products and also do women’s hair.

“Through the training they showed me how to save, I didn’t save before… I can save more than 10,000 KSh through my business.”

These days Doreen has no problem paying school fees for her three children – not only that, she has opened savings accounts for them too.

“We enjoy many things now we don’t have so many problems,” she says. “We feel free and happy now. I am filled with joy. The things we are doing, WJ has been able to help me so much and now I know more than what I used to know.”

The top 4 questions you asked about the new Oxfam inequality report

Our new report about the state of inequality in the world reveals how our economy is delivering unimaginable rewards for those at the top, while tens of millions of people are still in poverty.

As soon as we published it, we started to receive lots of great comments and questions. Here are some of the most interesting questions we’ve been asked, and our answers to them.

  1. “Poverty is going down globally. People are living longer, healthier lives. Why should we care if a few people are also getting really rich?”

It’s absolutely true – and absolutely brilliant – that extreme poverty has declined very significantly over the past 25 years. In fact, the number of people living in extreme poverty – which is defined as anyone living on less than $1.90 a day – has more than halved. However, that doesn’t mean we can now put our feet up, or even carry on along the same path that we’ve been going down.

Over this same time period, inequality has been increasing within most countries, and is now at dangerously high levels. There’s a great deal of evidence to show that extreme inequality leads to very negative social, political and economic impacts and stands in the way of the fight against poverty globally. The majority of extreme poverty is now in middle-income countries.

The rise of extreme economic inequality is also a serious blow to the fight against gender inequality. Women feel the impact of inequality, and are more likely to live in poverty than men.

  1. “Oxfam is a charity – why are you talking about politics?”

Ending poverty is Oxfam’s reason for being – but we know that we can’t achieve our goal unless we work with others to tackle the structural issues that push people into poverty and keep them trapped there. This means addressing really big challenges such as economic inequality, gender discrimination and climate change. And these problems are all fundamentally about power.

To understand their causes and to find solutions, we have to look at who has been making the big decisions, whose interests they have been acting in and whose voices have been excluded. In particular, women’s voices and the perspective of women need to be heard, and acted on. We also have to look at who has the responsibility and the ability to put things right – and very often that means challenging governments to make better decisions.

  1. “Oxfam keeps criticizing big companies. Are you anti-business?”

We’ve been asked this a few times over the years, but it simply isn’t true. Much of Oxfam’s work involves actively supporting and developing enterprises in communities around the world. We have productive partnerships with many companies, large and small.

What we are against is the kind of business model that maximizes profits by paying poverty wages, endangering workers, trashing the planet, or aggressively dodging tax. We are happy to be seen as anti those kinds of business.

We want to see companies showing that there is a different way of doing business – that profit is not the only thing that matters to them. We want to see governments regulating against bad business practices, and actively supporting more positive ones.

  1. “Oxfam talks as though the economic pie cannot grow, and so it’s just a question of sharing that pie out more equally. But that’s obviously not true. If the economy grows, there will be more for everyone. And billionaires are the real wealth creators, driving that economic growth, so why shouldn’t they be rewarded for that?”

Of course, economic growth can bring benefits with it – but at the moment, we see that those benefits are mostly going to those at the top. 82% of the wealth created in the world last year went to the top 1%. We need both governments and businesses to take action to ensure growth benefits everyone – and particularly those at the bottom, of which women make up the largest percentage. Across the world, women consistently earn less than men and are usually in the lowest paid and least secure forms of work.

While inclusive economic growth is going to play a really important role in ending poverty in many countries, we also know that we have to tackle inequality at the same time, or we’ll destroy the planet that we all depend upon. With current levels of inequality, our global economy would need to grow 175 times bigger before everyone was able to earn $5 a day. That’s obviously completely unsustainable. We have to find a different and better route to shared prosperity.

We are asking people to help spread the word and to join the movement to fight inequality and beat poverty.

Watch how kids make things fair

How Kids Make Things Fair - 2 Min

“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.

 

Pages