A scary world of economic inequality

In a global climate of economic upheavals and uncertainty, it appears there are a few super-rich who will have no problems going to sleep at night, unlike the other billions who hope to survive the next day.

Oxfam recently released a report regarding the world’s economic equality, and it makes for some disturbing reading. It contains ‘horrors’ that even maestro Stephen King cannot conjure up.

And naturally, there has been some heavy negative reaction, and such a backlash is understandable as it remains clear that only a few elite on a planet of seven billion people are smiling all the way to the bank.

Consider that, according to this report, just eight men own the same wealth as the poorest half of the world. Therefore, as growth benefits the richest, the rest of society – especially the poorest – suffers.

Take a moment to digest that news. And who are the top three? They are, in order, Bill Gates (yes, he is still there), Amancio Ortega and Warren Buffet, who own between them about $202 billion, which works out to about almost R3 trillion!

Now, also consider that the combined wealth of three men in South Africa is greater than the wealth of the bottom 50 per cent of our Rainbow Nation combined.

The richest in South Africa are Christoff Wiese, Ivan Glasenberg and Stephen Saad, who hold between them roughly R165 billion, which can buy quite a number of Nkandlas!

In South Africa, the richest one per cent of South Africans therefore have 42 per cent of the total wealth.

In reaction to this, the Congress of South African Trade Unions said inequality will continue to worsen in South Africa because government has kept its hands off the running of the country’s economy, leaving the plight of the poor at the mercy of the monopoly capital with their wealth accumulation agenda.

Strong words indeed, but surely in all honesty something is not right with the world, that so few are so wealthy and so many are so poor.

Oxfam SA executive director Sipho Mthathi said such global inequality is the sign of a broken economy from global to a local perspective and the lack of will from government to change the status quo. No kidding.

The report claims the gap between the rich and the poor is greater than feared, detailing how big business and the super-rich are fuelling the inequality crisis by dodging taxes, driving down wages and using their power to influence politics.

It is no wonder it advocates for progressive wage policies to bridge income and wage disparities.

As I said, the report makes for some disturbing reading.

According to the report, the very design of global economies and the principles of such economics have taken societies to this extreme, unsustainable and unjust point.

It therefore also calls for economies to stop excessively rewarding those at the top and start working for all people.

The report follows the World Economic Forum that identified four years ago the rising economic inequality as a major threat to social stability.

The outgoing American president Barack Obama told the UN General Assembly in his departing speech in September last year that a world where one per cent of humanity controls as much wealth as the bottom 99 per cent will never be stable.

Here is some more disturbing reading:

The report estimates that over the next 20 years, 500 people will hand over R28 trillion to their heirs – a sum larger than the GDP of India, a country of 1.3 billion people.

The incomes of the poorest 10 per cent of people increased by less than R40 a year between 1988 and 2011, while the incomes of the richest one per cent increased 182 times as much.

A FTSE-100 CEO earns as much in a year as 10 000 people working in garment factories in Bangladesh.

There is therefore no getting away from the fact that the biggest winners in our global economy are those at the top.

At the end of the day, the total global wealth has reached a staggering $255 trillion. Since 2015, more than half of this wealth has been in the hands of the richest one per cent of people.

So for us here in South Africa, consider that we are not unique. The economic inequality we experience is a global phenomenon that is also worsening.

All I can say is thank goodness I am not driving a Ford Kuga or that I am not president of the USA.