Inequality greater: most people became poorer in recent years, the richest few twice as rich | Economy

This is evident from the latest research by development organization Oxfam Novib into wealth inequality in the world. The differences are only getting bigger. For the first time in 25 years, wealth inequality between the north and the south has increased. The north is home to 21 percent of the world’s population and has 69 percent of global wealth, the study shows. Women also lag far behind men in terms of wealth. Men have 1.5 trillion more assets than women.

Inflation is one of the main causes of increased inequality. Higher prices hit the poor hardest, as they have to spend most of their income on food and energy, two major causes of inflation. Despite inflation, richer people can save and invest a larger share of their income and therefore see their wealth grow.

Oxfam Novib says that large multinationals also contribute to growing inequality. The companies have made record profits in recent years. Those profits go to shareholders, not employees. Seven of the ten largest companies in the world have a billionaire as CEO or major shareholder. So the increase in the wealth of the richest people is partly the result of the exploding profits of their companies.

The bill lies with the employees. The wages of 800 million workers have risen less than inflation, further eroding their purchasing power.

“The promise that more economic growth automatically leads to greater well-being and prosperity for everyone has long been broken. Large companies and the super-rich in particular benefit. It is not without reason that ‘grabbing inflation’ was the word of the past year. The hard figures from our report now expose this,” said Michiel Servaes, director of Oxfam Novib in the Netherlands.

Inequality is also great in the Netherlands, the report shows. The richest 1 percent of Dutch people have a quarter of the total wealth. The number of billionaires rose to a record level of 51. In the Netherlands, top executive pay is also rising faster than employee salaries. Top executives at Dutch multinationals had earned as much after one week as someone with the minimum wage would earn in a year.

An important cause of growing inequality is the tax system. In the Netherlands, labor is taxed more heavily than capital. In practice, this means that the richest 1 percent pay an average of 20 to 30 percent in taxes. While the average Dutch person pays 40 percent of his or her salary to the tax authorities.

And that requires action, says Servaes. For example, he wants an extra wealth tax for the super-rich. That money can then be used to reduce inequality. “Politicians who argue for greater social security must realize that this is only possible through a fairer distribution of prosperity. Without intervention, the skewed growth will only become more skewed.”

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