The Oxfam inequality report is annually published by Oxfam, a congregation of 20 organisations that are working to eradicate poverty at the global level. This congregation was formed in the year 1942 and is led by the Oxfam International. The report is published each year prior to the World Economic Forum where the developed countries meet to discuss various economic issues of today’s world. Inequality is one of the key issues discussed in the Forum. The major focus of this report is to capture the extent of inequality and concentration of wealth in the world today.
The report stated that the net worth of the 26 richest individuals in the world was equivalent to the wealth held by the poorest 50% of the global population, i.e. 3.8 billion people. This shows the extent of concentration of wealth and inequality worldwide. Another aspect is that the wealth of the richest saw a growth of 12% while that of the poorest saw a decline of 11%. The year 2017 to 2018 saw the emergence of a billionaire every two days. The wealth of the richest is so high that 1% of Jeff Bezos is equal to Ethiopia’s health budget. These instances demonstrate the extent of wealth inequality. This proves that the benefits of economic development are not being distributed evenly and that the fight against global poverty is becoming tougher by the day.
In the Indian context, the issue is of even bigger concern. The report stated that nine rich Indians hold wealth that is equal to 50% of the poorest Indians. The top 1% of the richest saw their wealth grow at 39% while the wealth of the poorest increased by a mere 3 %. The bottom 10%, six crore Indians, have been in debt since 2004. The combined central budget for medical, health, sanitation and water supply departments is lesser than the total wealth held by Mukesh Ambani. Infants from poorer households are three times more likely to die before the age of one than children from relatively well-off households. In India, the inequality problem is compounded with the caste problem. Dalit women have a life expectancy that is 14.6 years lesser than that of high caste women.
One of the most insightful finding was the sexist nature of inequality. Economic inequality is intrinsically linked to gender inequality. It was found that women, globally, are paid 23% lesser than men for the same job with similar qualifications. The differences in the wages for men and women in India was 34%. Similarly, when it comes to the holding of wealth, men hold 50% more wealth than women. This is primarily because the patrilineal inheritance system has always favoured men. Generation of wealth and also increased income is possible through the process of entrepreneurship and women do not enter this because of lack of credit and collateral. Therefore, their chances of accumulating wealth are constrained. Finally, the report found that the unpaid work of women in the form of care and household activities accounts to $10 trillion globally.
The implications of inequality can be far reaching. It calls for the reallocation of resources so that the society as a whole can be better off. It merely drives home the fact that efforts to eradicate poverty can be futile if we do not figure out a means to address inequality. Another peculiar and rather important characteristic of wealth is that it breeds more wealth. It is therefore all the more unacceptable to expect that this wealth gap would reduce by itself. It is no longer acceptable to say that economic development or the practice of attaining self-interest in the markets would lead to equitable growth. In the Indian context, if the government was to impose an additional 0.5% tax on the wealth of the richest 1%, the health expenditure can be increased by 50%. Effectively taxing wealth is the key towards addressing this issue and providing some basic yet unavailable facilities to the masses. Often, the rich pay an effective tax rate that might be lesser than that of the general tax payers.
The report gives an insight and the rather strange comparisons highlight the extent of inequality existing in today’s world. There may be several criticisms with regard to the statistics and the data used to arrive at it but the existence of inequality cannot be negated. Inequality in economic terms is real and breeds even greater levels of inequality, thereby widening the wealth gap worldwide. It is never just or equitable to have one very small segment roll in luxury while the majority strives for sustenance. Reallocation of wealth in this context becomes very important for sustainable and equitable development. Taxation is a highly effective tool at the disposal of governments, even though tax evasion is yet another problem. It can be a step towards addressing inequality and there is a long path ahead. Equality in the perfect sense may be an utopian concept but people need to be given a fair chance at accumulating wealth and the present state of inequality is not a favourable situation for it.
Picture Credits : .visualcapitalist