8 People Now Have the Same Wealth as the Poorest 3.6 Billion

Inequality is a daily reality for millions of Americans who are struggling to make ends meet, which is part of a global trend that has seen the wealthy profit from an unfair political system as everyone else is left behind. In the US, the 1% control 42% of wealth. Between 1988 and 2011 the poorest 10% of Americans saw their incomes grow by an average $427 while the richest 10% saw their income increase by $13,490 on average.

From Nigeria to Bangladesh, from the UK to Brazil, people are fed up with feeling ignored by their political leaders and millions are mobilizing to push for change. Seven out of 10 people live in a country that has seen a rise in inequality in the last 30 years. Between 1988 and 2011 the incomes of the poorest 10 percent increased by just $65, while the incomes of the richest 1 percent grew by $11,800 – 182 times as much.

But instead of attacking such dramatic inequalities, President-elect Trump and some in Congress seem to want to respond to the outcry by giving massive tax cuts to the rich, dismantling protections for workers, and punishing refugees and immigrants. It is concerning that to lead the agencies that protect workers, the environment, and human rights, President-elect Trump has nominated individuals who have spent their careers attacking the rules, undermining protections, and resisting progress.

The current economy of the 1% is built on a set of false assumptions which lie behind many of the policies, investments and activities of governments, business and wealthy individuals, and which fail people living in poverty and society more broadly. Some of these assumptions are about economics itself. Some are more about the dominant view of economics described by its creators as ‘neoliberalism’, which wrongly assumes that wealth created at the top will ‘trickle down’ to everyone else. 

 

The IMF has identified neoliberalism as a key cause of growing inequality. 50 Unless we tackle these false assumptions, we will be unable to turn the situation around. 

 

1. False assumption #1: The market is always right, and the role of governments should be minimized. In reality, the market has failed to prove itself the best way of organizing and valuing much of our common life or designing our common future. We have seen how corruption and cronyism distort markets at the expense of ordinary people and how the excessive growth of the financial sector exacerbates inequality. Privatization of public services such as health, education or water has been shown to exclude the poor, and especially women.

 

 2. False assumption #2: Corporations need to maximize profits and returns to shareholders at all costs. Maximizing profits disproportionately boosts the incomes of the already rich while putting unnecessary pressure on workers, farmers, consumers, suppliers, communities and the environment. Instead, there are many more constructive ways to organize businesses that contribute to greater prosperity for all, and plenty of existing examples of how to do this.

 

 3. False assumption #3: Extreme individual wealth is benign and a sign of success, and inequality is not relevant. Instead, the emergence of a new gilded age, with vast amounts of wealth concentrated in too few hands – the majority male – is economically inefficient, politically corrosive, and undermines our collective progress. A more equal distribution of wealth is necessary. 

 

4. False assumption #4: GDP growth should be the primary goal of policy making. Yet as Robert Kennedy said in 1968: ‘GDP measures everything except that which makes life worthwhile.’ GDP fails to count the huge amount of unpaid work done by women across the world. It fails to take into account inequality, meaning that a country like Zambia can have high GDP growth at a time when the number of poor people actually increased. 

 

5. False assumption #5: Our economic model is gender-neutral. In fact, cuts in public services, job security and labour rights hurt women most. Women are disproportionately in the least secure and lowest-paid jobs and they also do most of the unpaid care work – which is not counted in GDP, but without which our economies would not function. 

 

6. False assumption #6: Our planet’s resources are limitless. This is not only a false assumption, but one which could lead to catastrophic consequences for our planet. Our economic model is based on exploiting our environment and ignoring the limits of what our planet can bear. It is an economic system that is a major driver of runaway climate change. 

 

These six assumptions need to be overturned, and fast. They are outdated, backwardlooking, and have failed to deliver both shared prosperity and stability. They are driving us off a cliff. An alternative way of running our economy – a human economy – is needed urgently.

Together we must demand that world leaders, including President-elect Trump and Congress take urgent action to reduce inequality and the extreme concentration of wealth. We are calling on them to:
Stop offshore tax dodging which costs the US and developing countries more than $100 billion each year.

Raise the minimum wage so that working families can make a living wage.

Fight discrimination of all kinds and ensure equal pay for equal work.

Build and invest in a social safety net for everyone.

Ensure every person has access to affordable, high quality healthcare and education.