“The rich have become richer, and the poor have become poorer; and the vessel of the State is driven between the Scylla and Charybdis of anarchy and despotism,” lamented Percy Bysshe Shelley almost exactly two centuries ago. That little has changed over the decades was more recently illustrated with empirical data by French economist Thomas Piketty in his 2013 book ‘Capital in the Twenty-First Century’.
On Monday, rights advocacy organisation Oxfam released a report warning that the growing gap between rich and poor is “undermining the fight against poverty, damaging our economies and fuelling public anger across the globe”. The document throws up some mind-boggling numbers.
In India for instance, the richest one per cent saw their wealth grow a whopping 39 per cent last year. The bottom 50 per cent, however, saw wealth grow a measly 3 per cent. The richest one per cent also own more than four times the wealth held by the bottom 70 per cent. Billionaires last year also added Rs 2,200 crore a day to their money chests, while the 13.6 crore Indians who make up the poorest 10 percent of the country have continued to remain indebted since 2004.
And India’s wealthy already enjoy sway over most of the country’s resources. The combined total wealth of the country’s 63 billionaires is higher than the total Union Budget of India for the fiscal year 2018-19, which stood at Rs 24,42,200 crore.
The trend is global. During the year, the world’s billionaires added $2.5 billion a day to their bank accounts while the poorest 3.8 billion people saw their wealth decline by 11 per cent.
Growing wealth inequality has ramifications for the world and India both, the authors of the report note. "It is morally outrageous that a few wealthy individuals are amassing a growing share of India’s wealth while the poor are struggling to eat their next meal or pay for their child’s medicines. If this obscene inequality between the top 1 per cent and the rest of India continues, then it will lead to a complete collapse of the social and democratic structure of this country,” said Amitabh Behar, CEO, Oxfam India.
The poor live shorter lives
The unhindered accumulation of wealth in the hands of a few has significant implications for those who are trapped in economic stagnation. According to the report, being poor actually means losing a substantial chunk of your expected lifespan.
“In most countries – both developed and developing – having money is a passport to better health and a longer life, while being poor all too often means more sickness and an earlier grave,” the report’s authors say, pointing out that in India, “a so-called low-caste woman can expect to live almost 15 years less than a so-called upper-caste woman”.
While the richest parts of Sao Paulo, Brazil, have a life expectancy of 79 years, in the poorest areas, the figure is just 54 years. In Nepal, a child from a poor family is three times more likely to die before they are five than a child from a rich family.
The need to spend for healthcare can itself push millions into crippling poverty, according to Oxfam, which says that each year, 100 million people are forced into extreme poverty and 800 million more face severe financial difficulties due to the need to pay for healthcare. “This number is increasing. The fastest increase is in Africa, where two-thirds of countries still charge user fees for all levels of care. India is home to the largest number of people pushed into poverty by health expenses; paying for medicines is the chief cause. Medical bills are also one of the leading causes of personal bankruptcy in the US,” the authors noted.
“The size of your bank account should not dictate how many years your children spend in school, or how long you live – yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care,” said Winnie Byanyima, Executive Director of Oxfam International.
Gender plays a part
While the yawning gap in opportunity between the poor and the wealthy is easier to spot, more difficult to understand is the very real gender gap. “Credit Suisse has this year estimated women’s share of global wealth at 40 per cent, but with very significant differences regionally and for different groups of women. For example: In Africa and in countries like India, Pakistan and Bangladesh, women account for somewhere between 20–30 per cent of wealth. In the US, unmarried white men own 100 times more wealth than unmarried Hispanic women,” noted Oxfam.
The organisation also says that when public services are neglected, poor women and girls suffer most. “Girls are pulled out of school first when the money isn’t available to pay fees, and women clock up hours of unpaid work,” it pointed out. In fact, if all the unpaid care work done by women across the globe was done by a single company it would have an annual turnover of $10 trillion – 43 times that of Apple, the world’s biggest company.
Even cutting taxes on the wealth predominantly benefits men, Oxfam said, because men own 50 per cent more wealth than women globally.
Government action key to addressing problem
The report’s authors note that governments have so far contributed to the problem and government action is needed to address it. For instance, globally, tax rates for the wealthy in rich countries fell from 62 per cent in 1970 to just 38 per cent in 2013. The average rate in poor countries is just 28 per cent.
“Economic inequality plagued by caste, class, gender and religion needs to be tackled on a war-footing. The government must now deliver real change by ensuring that the super-rich and corporations pay their fair share of tax and invest this money to strengthen public healthcare and education. Governments can build a brighter future for everyone – not just a privileged few,” said Behar.