Eighty two per cent of the wealth generated in 2017 went to the richest 1% of the global population, while the 3.7-billion people who make up the poorest half of the world saw no increase in their wealth.
A new report, entitled ‘Reward Work, Not Wealth’, released by charity organisation Oxfam, on Monday, comes as world leaders and politicians are gathered in Davos, Switzerland, for the forty-eighth World Economic Forum meeting.
“In addition to what can be characterised as a governance crisis, the meeting happens at a time when South Africa is going through several very urgent challenges that need to be dealt with.
“Primary among these are the triple, yet systemic, challenges of poverty, unemployment and inequality, as well as the continued problem of poverty wages,” Oxfam South Africa executive director Siphokazi Mthathi said at the report launch, in Johannesburg.
She added that the report revealed how the global economy enables a wealthy elite to accumulate vast amounts of wealth, while hundreds of millions of people are struggling to survive on poverty pay.
Mthathi further pointed out that 2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days.
Further, the number of African billionaires had increased from eight in 2010 to 25 last year and their combined wealth has more than doubled from $28-billion to $80.3-billion over the same period.
The report highlights that billionaire wealth has risen by an average of 13% a year since 2010, six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2%.
The report points to the relentless corporate drive to reduce costs and increase returns to shareholders as the biggest driver of rewards for the wealthy, at the expensive of workers.
“We see government behaviour globally, and in South Africa, which enables the squeezing of workers and the erosion of rights, a problem we think will be exacerbated by the proposed amendments of the Labour Relations Act, which, it seems, will significantly curtail workers’ rights to strike when passed into law.”
She noted that in 2015, world governments adopted an agenda for sustainable development which recognised addressing inequality as a problem.
Mthathi added that the economic situation in South Africa has historical roots, however, decisions of the post-apartheid government have failed to balance the scale.
She pointed out that the neoliberal economic framework the country adopted post-1994 could only produce a scenario where those who are already privileged, have the most capital, and have the most control over the economy have continued to grow at the expense of the poor and working people.
“The inequality we see, the extreme poverty which recent government numbers say has risen to a staggering 55% of the population since 2011, is owing to the economic direction our government took. Government has the power to change this,” she stated.