New report: Global economy benefits the richest one percent

Oxfam's new report shows how the global economy favors a wealthy elite while hundreds of millions of people do not earn enough money to live a decent life.

Inequality threatens poverty reduction
82% of wealth growth went to the richest one percent of the world's population last year. The 3.7 billion people who make up the poorest half of the world received no increase at all. This is according to our new report Reward work, not wealth, published on the eve of the World Economic Forum leaders' meeting in Davos.

Last year saw the biggest increase in dollar billionaires ever. Between March 2016 and March 2017, a new billionaire was added every other day, and they are getting richer. The combined wealth of billionaires has increased by an average of 13% per year since 2010. This is six times faster than the average worker's salary, which has increased by an average of 2% per year.

"The world must start rewarding work, not wealth. A much larger share of growth in the economy must start going to the poorest, otherwise the goal of eradicating extreme poverty will not be achieved. The fact that such a large share of wealth goes to the richest is not a law of nature, there are steps governments and businesses can take to reduce inequality and fight poverty."

Robert Höglund, Head of Communications Oxfam Sweden

The report shows that it would cost $2.2 billion a year to raise wages to a living standard for all 2.5 million Vietnamese working in the garment industry. This represents about a third of the amount paid to shareholders of the five largest garment companies in 2016.

Lan works in a factory that makes shoes in Vietnam. She works six days a week for one dollar an hour and has two other jobs to make ends meet. Photo: Sam Tarling/Oxfam

In just four days, a CEO of one of the world's five largest clothing companies earns as much as an average worker in the clothing industry earns in a lifetime. In the US, it takes a little over a day for a CEO to earn what an average worker earns in a year.

The report calls on governments and businesses to work to make the economy work for everyone, not just a few, and Oxfam makes clear new proposals to do so. For example, it calls on governments to set concrete targets to reduce inequality, starting from the premise that the combined income of the richest 10% should not exceed that of the poorest 40%. Companies are urged to prioritize their low-paid workers by refraining from rewarding shareholders and handing out bonuses to managers until all their employees have a living wage.

• It's hard to find a political leader who says they are not concerned about inequality. It's even harder to find someone who is doing something about it. Many are actively making the situation worse by cutting taxes and eroding workers' rights.

"It's hard to find a political leader who says they are not concerned about inequality. It is even harder to find someone who is doing something about it. Many are actively making the situation worse by cutting taxes and eroding workers' rights."

Robert Höglund, Head of Communications Oxfam Sweden