- Fortunes of five richest men have shot up by 114 percent since 2020.
- Oxfam predicts the world could have its first-ever trillionaire in just a decade while it would take more than two centuries to end poverty.
- A billionaire is running or the principal shareholder of 7 out of 10 of the world’s biggest corporations.
- 148 top corporations made $1.8 trillion in profits, 52 percent up on 3-year average, and dished out huge payouts to rich shareholders while hundreds of millions faced cuts in real-term pay.
- Oxfam urges a new era of public action, including public services, corporate regulation, breaking up monopolies and enacting permanent wealth and excess profit taxes.
The world’s five richest men have more than doubled their fortunes from $405 billion to $869 billion since 2020 —at a rate of $14 million per hour— while nearly five billion people have been made poorer, reveals a new Oxfam report on inequality and global corporate power. If current trends continue, the world will have its first trillionaire within a decade but poverty won’t be eradicated for another 229 years.
“Inequality Inc.”, published today as business elites gather in the Swiss resort town of Davos, reveals that seven out of ten of the world’s biggest corporations have a billionaire as CEO or principal shareholder. These corporations are worth $10.2 trillion, equivalent to more than the combined GDPs of all countries in Africa and Latin America.
“We’re witnessing the beginnings of a decade of division, with billions of people shouldering the economic shockwaves of pandemic, inflation and war, while billionaires’ fortunes boom. This inequality is no accident; the billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else,” said Oxfam International interim Executive Director Amitabh Behar.
“Runaway corporate and monopoly power is an inequality-generating machine: through squeezing workers, dodging tax, privatizing the state, and spurring climate breakdown, corporations are funneling endless wealth to their ultra-rich owners. But they’re also funneling power, undermining our democracies and our rights. No corporation or individual should have this much power over our economies and our lives —to be clear, nobody should have a billion dollars”.
The past three years’ supercharged surge in extreme wealth has solidified while global poverty remains mired at pre-pandemic levels. Billionaires are $3.3 trillion richer than in 2020, and their wealth has grown three times faster than the rate of inflation.
- Despite representing just 21 percent of the global population, rich countries in the Global North own 69 percent of global wealth and are home to 74 percent of the world’s billionaire wealth.
- Share ownership overwhelmingly benefits the richest. The top 1 percent own 43 percent of all global financial assets. They hold 48 percent of financial wealth in the Middle East, 50percent in Asia and 47 percent in Europe.
Mirroring the fortunes of the super-rich, large firms are set to smash their annual profit records in 2023. 148 of the world’s biggest corporations together raked in $1.8 trillion in total net profits in the year to June 2023, a 52 percent jump compared to average net profits in 2018-2021. Their windfall profits surged to nearly $700 billion. The report finds that for every $100 of profit made by 96 major corporations between July 2022 and June 2023, $82 was paid out to rich shareholders.
- Bernard Arnault is the world’s second richest man who presides over luxury goods empire LVMH, which has been fined by France‘s anti-trust body. He also owns France’s biggest media outlet, Les Échos, as well as Le Parisien.
- Aliko Dangote, Africa’s richest person, holds a “near-monopoly” on cement in Nigeria. His empire’s expansion into oil has raised concerns about a new private monopoly.
- Jeff Bezos’s fortune of $167.4 billion increased by $32.7 billion since the beginning of the decade. The US government has sued Amazon, the source of Bezos’ fortune, for wielding its “monopoly power” to hike prices, degrade service for shoppers and stifle competition.
“Monopolies harm innovation and crush workers and smaller businesses. The world hasn’t forgotten how pharma monopolies deprived millions of people of COVID-19 vaccines, creating a racist vaccine apartheid, while minting a new club of billionaires,” said Behar.
People worldwide are working harder and longer hours, often for poverty wages in precarious and unsafe jobs. The wages of nearly 800 million workers have failed to keep up with inflation and they have lost $1.5 trillion over the last two years, equivalent to nearly a month (25 days) of lost wages for each worker.
New Oxfam analysis of World Benchmarking Alliance data on more than 1,600 of the largest corporations worldwide shows that 0.4 percent of them are publicly committed to paying workers a living wage and support a living wage in their value chains. It would take 1,200 years for a woman working in the health and social sector to earn what the average CEO in the biggest 100 Fortune companies earns in a year.
Oxfam's report also shows how a "war on taxation" by corporations has seen the effective corporate tax rate fall by roughly a third in recent decades, while corporations have relentlessly privatized the public sector and segregated services like education and water.
“We have the evidence. We know the history. Public power can rein in runaway corporate power and inequality —shaping the market to be fairer and free from billionaire control. Governments must intervene to break up monopolies, empower workers, tax these massive corporate profits and, crucially, invest in a new era of public goods and services,” said Behar.
“Every corporation has a responsibility to act but very few are. Governments must step up. There is action that lawmakers can learn from, from US anti-monopoly government enforcers suing Amazon in a landmark case, to the European Commission wanting Google to break up its online advertising business, and Africa’s historic fight to reshape international tax rules.”
Oxfam is calling on governments to rapidly and radically reduce the gap between the super-rich and the rest of society by:
- Revitalizing the state. A dynamic and effective state is the best bulwark against extreme corporate power. Governments should ensure universal provision of healthcare and education, and explore publicly-delivered goods and public options in sectors from energy to transportation.
- Reining in corporate power, including by breaking up monopolies and democratizing patent rules. This also means legislating for living wages, capping CEO pay, and new taxes on the super-rich and corporations, including permanent wealth and excess profit taxes. Oxfam estimates that a wealth tax on the world’s millionaires and billionaires could generate $1.8 trillion a year.
- Reinventing business. Competitive and profitable businesses don’t have to be shackled by shareholder greed. Democratically-owned businesses better equalize the proceeds of business. If just 10 percent of US businesses were employee-owned, this could double the wealth share of the poorest half of the US population, including doubling the average wealth of Black households.
As someone deeply entrenched in the field of global economic inequality and corporate power dynamics, it's disconcerting yet not surprising to witness the staggering trends outlined in the recent Oxfam report, "Inequality Inc." The evidence presented is a stark testament to the growing chasm between the ultra-rich and the rest of the world, and I'd like to shed further light on the key concepts discussed in the article.
Wealth Surge of the Top Five Billionaires: The exponential increase in the fortunes of the world's five richest individuals, soaring from $405 billion to $869 billion since 2020, is a glaring indication of the concentration of wealth. This rate of accumulation, equating to $14 million per hour, is a testament to the unprecedented pace at which the elite are amassing wealth.
Billionaires and Corporate Control: The report highlights the profound influence of billionaires on corporate power structures, with seven out of ten of the world's largest corporations having a billionaire as CEO or principal shareholder. This concentration of power, totaling $10.2 trillion, poses significant implications for economic equality and democratic governance.
Corporate Profits Amidst Global Challenges: Despite widespread economic challenges such as the pandemic, inflation, and conflicts, the report reveals that 148 major corporations experienced a 52 percent increase in total net profits, reaching $1.8 trillion in the year to June 2023. This financial windfall, coupled with huge payouts to rich shareholders, underscores the disconnect between corporate prosperity and the struggles faced by millions.
Global Wealth Disparities: The stark contrast in global wealth distribution is emphasized, with rich countries in the Global North owning 69 percent of global wealth. The top 1 percent, representing a mere 21 percent of the global population, owns 43 percent of all global financial assets. This imbalance reflects the systemic nature of wealth inequality.
Impact on Workers and Wage Disparities: The report delves into the adverse effects on workers, with nearly 800 million facing stagnant wages that fail to keep up with inflation. The wages of these workers have collectively lost $1.5 trillion over the last two years. This data underscores the widening gap between labor and capital, with workers shouldering the burden of economic shocks.
Corporate Taxation and Privatization: Oxfam's analysis of a "war on taxation" by corporations reveals a decline in the effective corporate tax rate. Simultaneously, privatization trends in the public sector, including essential services like education and water, further exacerbate the challenges faced by the less privileged.
Oxfam's Call to Action: The report concludes with Oxfam's urgent call for a new era of public action. This includes revitalizing the state through universal healthcare and education, reining in corporate power by breaking up monopolies, legislating for living wages, capping CEO pay, and implementing new taxes on the super-rich.
As an expert deeply engaged in these issues, I echo Oxfam's call for governments and corporations alike to take immediate and decisive action to address the widening chasm of economic inequality and corporate power. The evidence presented demands urgent and comprehensive interventions to create a more equitable and just global economic landscape.