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The richest increase their fortune by 2,500 million a day


Oxfam Intermón publishes a report on the occasion of the start of the Davos Forum in which it denounces a sharp increase in global inequality

The pandemic before and the inflationary spiral after are widening the gap between rich and poor, already enormous.

One measure of this is the growth in the fortune of billionaires in the last two years: it has advanced at a rate of 2.7 billion dollars a day globally (about 2.5 billion euros at current exchange rates).

In other words, the wealthiest 1% grabbed 63% of the new wealth generated worldwide (some $42 trillion) between the end of 2019 and 2021.

On the other hand, at least 1,700 million workers have seen in the same period how inflation grew above their salaries and eroded their purchasing power, according to Oxfam Intermón in its latest report

The Law of the Richest.

Spain is not exempt from this dynamic either.

Since 2020, the wealth of Spanish billionaires has increased by almost $3 billion.

"For every dollar of new global wealth that a person from the poorest 90% of humanity receives, a billionaire pockets 1.7 million dollars," exemplifies the NGO, which publishes its report on the occasion of the start of the World Economic Forum in Davos.

"The elites are coming together in a context in which extreme wealth and poverty in the world have increased simultaneously for the first time in 25 years," adds Franc Cortada, director of Oxfam Intermón.

If a wealth tax of up to 5% were levied on billionaires, an additional $1.7 trillion a year could be raised.

The rise in prices registered in recent months has been the straw that broke the camel's back.

Triggered by the reawakening of activity after the pandemic and exacerbated by the war in Ukraine, it has become an unbearable burden for many vulnerable households.

According to the World Bank, inflation could contribute to the largest increase in poverty and inequality between states since World War II.

“Entire countries are on the verge of bankruptcy.

The poorest allocate four times more resources to servicing the debt (in the hands of rich creditors) than to public health services”, Oxfam collects in its report.

The NGO denounces that the largest companies are responsible for the abrupt rise in inflation, since they are taking advantage of the rising cost of raw materials and the current uncertainty to inflate prices and increase profits.

Specifically, it points out that 95 large energy and food companies have more than doubled their profits in 2022, allocating 85% of their extraordinary profits to remunerate their shareholders.

The other side of the coin is the 1,700 million women workers in countries where prices rise more than wages —Spain included— and the more than 820 million people around the world who are hungry.

Spain, one of the most unequal countries

The report reveals how, in Spain, the process to reduce inequality – the gap reached its maximum level in 2013 – has stagnated.

In 2008, the richest 1% represented 13.6% of the population;

in 2019 it had risen to 16.9%.

In 2021, he held 23.1%, a result that indicates that his wealth recovered much faster than the economy as a whole after the coronavirus hit.

In contrast, the participation of the poorest 50% in national income fell from 16.2% in 2008 to 14.2% in 2019. “According to the latest official information available, referring to 2020, the year of the pandemic, Spain it is among the most unequal countries in Europe, ranking fifth out of the 26 for which information is available,” the report concludes.

Although Spain has managed to contain inflation compared to its European neighbors through various aid packages, the rise in prices has likewise reached unprecedented heights and hit the lowest incomes hardest.

Between January and November 2022, it has been around 8% and has reduced the purchasing power of the poorest families by a further 26% compared to the wealthier ones.

Wages, far from growing, are falling to levels similar to those recorded during the worst years of the Great Recession and are 4% below then in real terms.

Meanwhile, profits and business margins remain intact or increase, contributing according to the organization to aggravate the rebound in the cost of living by almost 90%.

"At the end of 2022 the margins of the companies were 60% higher than those observed at the end of 2019, while wages had barely grown by 4%", highlights the report, which points out how in 2021 the profit of the large companies of the Ibex 35 had already far exceeded pre-pandemic results.

"A trend that has accelerated in the last year: only in the third quarter of 2022, the largest groups announced results 30% higher than those of the same period of the previous year," he adds.

According to the NGO, 90% of the inflation registered in 2022 is due to the increase in corporate profits.

"The evolution of inequality in Spain is a worrying phenomenon: while wages lose weight and purchasing power, large companies increase profits and wealth in Spain continues to be concentrated in the hands of a few," says Cortada.

Faced with this scenario, the organization demands an income pact from the Government —so far, it has not been possible to reach a consensus on the matter with the social agents— and points to several priorities.

Among them, it lists fiscal measures —a further increase in taxation for capital income, the reinforcement of the fight against tax evasion and avoidance or the expansion of taxes on extraordinary profits of companies— and social measures —such as extending the coverage of the minimum vital income and adopt measures aimed at the most vulnerable while the current crisis lasts.

"It is time to move from emergency and reactive measures to others of greater depth and that involve the different social actors" concludes Cortada.

'Tax the rich'

Oxfam has kicked off the #taxtherich complaint campaign, to raise awareness of the need for the wealthiest to pay more taxes.

With this initiative, the organization intends to point out all those practices that are harmful to the path towards equality and social cohesion.

For example, that the richest and the largest companies benefit from the current crisis to further increase their assets and benefits, but at the same time do not raise the salaries of their employees or use tax schemes to reduce their tax payments.

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Source: elparis

All business articles on 2023-01-16

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