Report: As the wealthy grow richer, the poor get poorer

As some of the richest and most powerful people in the world gather in Davos, Switzerland for this year’s World Economic Forum, campaigners are calling for an end to existing economic systems that have seen the rich get richer while the poor get poorer.

The latest Oxfam World Inequality Report indicates that 82 per cent of all wealth created in 2017 went to just one per cent of the world’s most elite population, while the poorest half of the population received nothing.

The report also states that the wealth of billionaires has grown six times faster than that of the ordinary, and that a new billionaire was minted every two days between March 2016 and March 2017.

“The billionaire boom is not a sign of a thriving economy, but a symptom of a failing economic system,” Oxfam executive director Winnie Byanyima said in a statement, adding that “the people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods and swell the profits of corporations and billionaire investors”.

SCHOOL FEES

Experts say the wealth that has created newly-minted billionaires is enough to end global extreme poverty seven times over for people like Stephen Onyango, a 32-year-old father of four who lives in Kibera, surrounded by a biting poverty propagated by a system he says is rigged against him.

He only made Sh5,000 in December last year from his cereals business, meaning his family was only able to survive because his wife grows subsistence crops on their one-acre farm in their rural home, therefore helping to supplement Onyango’s income.

“Business was very bad in December, maybe because of the political environment, so I was not able to make much sales,” he says. “Without the income from the farm, we would never have been able to pay school fees or feed and clothe our children. Life has always been hard, but it has seemingly gotten worse lately.”

He is pessimistic about whether January might give him better returns than December because, without capital to boost his small business, he has no way to grow the revenue.

“I work hard but everything in this society runs on money. You have to have money to make money, so when you are poor like me, your status seems unlikely to change.”

FAT SALARIES

On the opposite end of the spectrum are the spectacularly wealthy, whose fat salaries regularly put them on the list of best paid executives. Kenya’s highest earning chief executive, according to media reports, made Sh375 million last year, and many other business leaders earn more than Sh100 million annually.

The pay disparity between the rich and the poor is even more striking when gender is factored in because women consistently earn less than men, and are usually stuck in low paid, insecure jobs. Worldwide, nine out of every ten billionaires are men.

In Kenya, even as the woman empowerment movement grows and more women take up positions of leadership and influence, the economy is still generally skewed in favour of men. For instance, the Kenya National Bureau of Statistics reported in its 2017 Economic Survey that there are twice as many men as women in the Kenyan workforce.

GENDER PAY GAP

In addition, men grossly outnumber women in all sectors of the economy except two — human health and social work, and as caregivers in households. These two are among the least paid jobs available.

To fight rising inequality, Oxfam is calling on governments to limit the returns of shareholders and top executives, close the gender pay gap, crackdown on tax avoidance, and increase spending on healthcare and education.

The study was released on the eve of top political and business figures meeting at a luxury Swiss ski resort for the annual World Economic Forum, which this year will focus on how to create “a shared future in a fractured world”.

Additional reporting by AFP