Millions of people are being forced deeper into poverty as the ultra-rich increase their wealth.
As global elites gather this week in the ski resort town of Davos, Switzerland, for the annual World Economic Forum, our global context couldn’t be more alarming. For the first time in 25 years, extreme wealth and extreme poverty have increased at the same time.
People in the US and around the world struggle to pay the high costs of food, gas, and other necessities, yet over the past two years, the richest 1% have secured nearly twice as much wealth as the rest of the world combined. How is this possible?
Our new report, “Survival of the Richest,” delves into the concerning increase in billionaire wealth since 2020, and how this increase is pushing more people further into poverty.
In short, billionaires are bad for the economy. How bad? Check out these top five ways:
1. Since 2020, almost two-thirds of all new wealth went to the top 1%.
The richest people in the world make six times more than the bottom 90% of humanity. Collectively, that’s $2.7 billion a day. Our report shows that extreme wealth gaps undermine the fight against poverty, gender inequality, and climate change.
The U.N. set a goal to end poverty by 2030, but this increasing concentration of wealth means that efforts to reduce poverty have slowed down. This is the first time in decades that global inequality has risen. In response, the World Bank determined in 2022 that we are unlikely to meet the U.N.’s goal.
2. The super-rich are taxed at a dangerously low rate.
Billionaires paid a low tax rate of 3% while most people with less money, like nurses and teachers, paid far more. If multi-millionaires paid a 2-3% wealth tax rate and billionaires paid a 5% wealth tax rate globally, it would raise $1.7 trillion a year. This money could be used for underfunded social programs, environmental policies, and economic programs. This would reduce the stress of necessities like the cost of childcare and healthcare.
With this tax rate, 2 billion people could be lifted out of poverty. We need to reduce inequality to end poverty and injustice. Increasing taxation up to 5% for the richest people in the world would be a strong step toward equality.
3. Extreme wealth and poverty are rising simultaneously for the first time in decades.
Now more than ever, workers are struggling to pay their bills, buy their groceries, and support their families because inflation is skyrocketing across the world. Corporations are raising the prices on goods, not because they have to, but because it increases the payouts for their shareholders. This lines the pockets of the ultra-wealthy while forcing more people into poverty.
Last year, 95 food and energy corporations doubled their company profits. Instead of investing that money in their employees, they paid $257 billion to their already rich shareholders. In the backdrop of this outrageous corporate greed, 1.7 billion workers live in countries where inflation now outpaces wages.
4. American billionaires are 33% richer than they were at the start of the pandemic.
In 2020, the US experienced the worst economic growth since World War II. Much of the country felt this burden, especially marginalized groups, but the top 1% did not struggle. Instead, they became significantly richer.
This is possible because, for decades, the system has been rigged in favor of the rich. Labor laws, CEO compensation, the privatization of public assets, and much more are skewed toward making the rich richer. This leaves little protection and support for the average person, putting them in a vulnerable position.
5. Billionaires are contributing a million times more carbon to the atmosphere than the average person.
People across the globe are facing dangerous climate change events, such as severe hurricanes, flash floods, and wildfires because billionaires are making climate change rapidly worse. In fact, 125 of the world’s richest billionaires invest so much money in polluting industries that they are responsible for emitting an average of 3 million carbon tons a year. The more they invest in fossil fuels, the more they protect the use of them, no matter how much the rest of the world suffers in response.
The rising levels of global inequality are unacceptable: clearly, it's time for more billionaire-busting policies. Oxfam is demanding wide-ranging increases in taxation of the super-rich, and we call on world governments to tax multi-millionaires and billionaires.