Corporations and billionaires are increasing their wealth at astounding rates while the rest of us are suffering the consequences of their greed.
This week marks the World Economic Forum in Davos, Switzerland—an annual gathering where politicians, billionaires, and business leaders come together to supposedly “improve the state of the world.” However, the big players in Davos are often the very same people driving inequality, looking after their own interests rather than the public good. If they actually seek to better the world, they must start by taking a hard look at unchecked corporate power and take steps to rein in corporate greed.
Oxfam’s new report, Inequality Inc., explores the disparity between the uber-wealthy and the rest of society. Since 2020, five billion people have become poorer, while the world’s five richest men have more than doubled their fortunes—at a rate of $14 million per hour. Meanwhile, people worldwide face a prolonged cost-of-living crisis, climate breakdown, and conflict. Many are still reeling from the pandemic and working harder and longer hours, often for poverty wages in precarious and unsafe jobs.
6 ways corporate power is making inequality worse
1. Corporations are generating income inequality
Corporations use their influence to oppose labor laws and policies that benefit workers, for example by fighting minimum wage increases, while pushing for political restrictions on unionization and supporting rollbacks to child labor laws. Only 0.4 percent of the world’s largest corporations are publicly committed to paying workers a living wage and support a living wage in their value chains. While corporate profits are soaring, the wages of nearly 800 million workers around the world have failed to keep up with inflation, resulting in a loss of $1.5 trillion for those workers over the last two years.
2. Corporate power increases racial and gender inequality
This report uncovers how corporate power exploits and magnifies racial and gender inequalities. One such way is through privatization, which drives and reinforces inequalities, particularly along racial, class, caste, and gender lines. Privatization commodifies and segregates access to essential services, like healthcare and education, both excluding and impoverishing those who cannot pay.
Corporate power also propels climate breakdown, which further exacerbates inequalities, putting an undue burden on Black, Indigenous, and people of color, women, and lower-income people. Many of the world’s billionaires own, control, shape and financially profit from processes that generate carbon pollution. They benefit when corporations block progress on a fast and just transition to renewable energy while the people in low-income countries who produce the least climate pollution suffer the greatest the consequences.
3. Billionaires are reaping the profits
Hundreds of millions of people are struggling to keep up with the cost of living; meanwhile, billionaires are $3.3 trillion richer than they were in 2020. This is not a coincidence. When we analyzed the world’s largest corporations, we found that a billionaire is running or the principal shareholder of 7 out of 10 of them. The richest 1 percent own 43 percent of all global financial assets. If corporations were structured more democratically, that could significantly reduce inequality. For instance, if 10 percent of every business in the U.S. was employee-owned, it could double the share of wealth of the bottom 50 percent and the median wealth of Black households.
Help us demand President Biden and Congress rein in billionaire and corporate power
It’s time to curb the influence and power of billionaires and corporations.
4. Corporations are not paying their fair share
Oxfam’s report shows how a "war on taxation" by corporations has seen the effective corporate tax rate (the rate at which pre-tax profits are actually taxed) fall by roughly a third in recent decades, with many mega companies paying next to nothing in taxes. During the same period, many corporations made record profits. This tax-dodging costs society. To compensate for the loss of tax revenue from corporations and their rich owners, governments have cut public services and increasingly relied on regressive taxes on goods and services, which fall disproportionately on low-income households.
5. Monopolies are giving an elite few massive power
By allowing monopolies to flourish, governments are empowering a small number of corporations to exert extraordinary influence over economies and politics, and ultimately, over our communities. These monopolies have a huge role in shaping the lives of ordinary people around the world, from influencing how much we are paid, to the foods we eat and can afford, and the medicines we can access.
6. Our economic system has created a new type of colonialism
Many of the world’s super-rich are concentrated in countries that were once colonial superpowers. Neocolonial relationships persist, perpetuating economic imbalances and rigging the economic rules in favor of rich nations. Low- and lower-middle-income countries are set to pay nearly half a billion U.S. dollars a day in interest and debt payments between now and 2029, and they are having to make severe spending cuts to be able to pay their creditors.
A more equal world is possible, but only if governments take action
We are at an inflection point. Oxfam predicts the world could have its first-ever trillionaire in just a decade. At this same time, poverty is growing. At the current rate, it will take 230 years to end poverty. World leaders face a fundamental choice: they can allow the era of billionaire supremacy to flourish OR they can do what’s best for everyone else and transform our economies to be more equitable and dignified.
Monopolistic power is not a new phenomenon. During the Gilded Age of the late 19th and early 20th centuries, monopolies controlled industries in the U.S. from railways to banking. The last time we saw wealth concentration this high, governments did something about it. In the U.S. reforms were introduced to break up monopolies and keep corporate power in line. If we did it before, we can do it again.
So how do we reduce the gap between the super-rich and the rest of society?
Oxfam is calling on governments to rein in billionaire and corporate power. This means breaking up monopolies, empowering workers by supporting living wages, unionization, and paid sick and family leave, taxing corporations and the superrich, and embracing public services.
Oxfam estimates that a wealth tax on the world’s multi-millionaires and billionaires could generate $1.8 trillion a year. This money could be used to invest in public services and infrastructure and to support climate action initiatives that could better everyone’s lives, not just those of the ultra-wealthy.