Equality and wealth distribution: How far have we really come? 1


This week’s blog comes from Gillian Moore.

Fig. 1: Child’s drawing of their home in a hotel in Dublin

Fig. 1: Child’s drawing of their home in a hotel in Dublin

This year marks the centenary of the 1916 Rising when the Irish Proclamation was read by Padraig Pearse on the steps of the General Post Office (GPO) proclaiming a Republic that would guarantee ‘religious and civil liberty, equal rights and equal opportunities for all its citizens, and declares its resolve to pursue the happiness and the prosperity of the whole nation and all its parts, cherishing all the children of the nation equally’ (the1916proclomation, 2016)

As a nation reflecting on this pivotal period, one can’t help but question how far we still are from realising this envisioned Ireland, especially when there is still so much poverty and inequality in our midst. Reading the figures released by the Oxfam report (2016) really encapsulated many of the issues coming to the fore in Irish society, such as homelessness and the widening gap between the wealthy and poor despite forecasts that Ireland is moving towards economic recovery. From my experience as a primary school teacher, I believe that in many ways Ireland is becoming a more unequal place, compared to ten years ago when I first began teaching. The number of homeless children in my school has increased, and as one parent explained ‘however bad things were before at least we had a roof over our head’ (Fig. 1).
Within Europe, the influx of refugees and our inability to address the situation in a just and moral way, questions how far we have come in the past century, particularly when less than 70 years ago the Refugee Convention, and later the 167 Protocol were approved to ensure such situations would be dealt with in a humane and protective manner. Today society as a whole is at a moral crossroads.

“The richest can no longer pretend their wealth benefits everyone – their extreme wealth in fact shows an ailing global economy. The recent explosion in the wealth of the super-rich has come at the expense of the majority and particularly the poorest people”
(Winnie Byanyima, Oxfam International Executive Director, Oxfam, 2016).

The Oxfam report ‘An Economy for the 1%’ released in January to coincide with the World Economic Forum at Davos emphasises that the divide between rich and poor has dramatically widened in the past few years. As of 2016 the wealth of the richest 62 individuals has increased ‘by more than half a trillion dollars to $1.76tr’ (Oxfam, 2016), with figures in the report showing that ‘1% of people own more wealth than the other 99% combined’ (Elliott, 2016). While world leaders such as Pope Francis and Christine Lagarde, the managing director of the International Monetary Fund (IMF), have stressed the need to address this inequality, little has really been done.
Further figures show that 30% of all African wealth is believed to be held offshore resulting in the loss of up to $14 billion lost tax revenue each year (Oxfam, 2016). As reported by Oxfam this money could ‘pay for healthcare for mothers and children in Africa that could save 4 million children’s lives a year, and employ enough teachers to get every African child into school’ (Oxfam, 2016). Frightening figures show that corporate investment in tax havens have almost quadrupled between 2000 and 2014 resulting in revenue losses of up to $100 billion per annum in developing countries (Oxfam, 2016).
However, the Oxfam report is not without its critics such as Felix Salmon, The Economist and Ezra Klein at Vox who believe ‘the lack of assets held by most people in the world skew the global figures’ (Gilmore, 2016)’. Or as Worstall (2016) at Forbes describes the Oxfam report as nothing that ‘should spark our concern in any great manner’ as she believes nothing needs to be done as there is no real problem at all. However, as argued by Gilmore (2016) such arguments are ‘pretty silly objection(s) to a serious report on what is a pretty serious situation’.
The Oxfam report (2016) emphasises the importance of governments collecting taxes owed by individuals and companies if they are to eliminate extreme poverty by 2010. Oxfam stresses the need for a three-pronged approach through a crackdown on tax dodging; higher investment in public services; and higher wages for the low paid (Elliott, 2016). Furthermore there is a need to close the tax havens utilised by companies and rich individuals that essentially deprive governments of the necessary resources needed to address poverty and inequality.
Public data utilised by Oxfam showed that out of 200 companies 9 out of 10 of them had a presence in at least one tax haven. Ironically out of the 200 companies, 100 were described by the World Economic Forum as strategic partners. The banking sector is seen as playing a key role in the tax haven issue with the 50 major banks managing most of the offshore wealth. Furthermore the financial sector is, as illustrated by Cohen (2016), a prime source of rising inequality in that one in five billionaires comes from that industry.
Why is this inequality not being tackled by governments? Tackling this inequality is complicated and as noted by Winters of Motivation in the United States ‘the most promising way to reduce inequality is through policy and tax changes rather than the goodwill of people at the top’ (Cohen,2016). The Equality Trust, which campaigns against inequality in the UK, has pointed out that in Britain alone the 100 richest families had increased their wealth by at least £57bn since 2010, during which time average incomes declined (Elliott, 2016). The trust’s director Duncan Exley emphasises that both globally and at national level inequality is at staggering levels and that “We now need our politicians to wake up and address this dangerous concentration of wealth and power in the hands of so few”(Elliott, 2016).
The report also outlines the falling share of national income going to workers in nearly all developed and most developing countries and the increasing divide between those at the top and bottom of the pay scale. The majority of low paid workers are also women. The Oxfam report highlights the need for governments to move towards living wages and the need to tackle the pay disparity between men and women.
We as a society need to make a decision. Do we want to adopt policies that make it harder for the ultra wealthy to shape government and society or are we content to facilitate the ability of the rich to shape our society? It can no longer be ignored that our society is becoming more unequal and the divide between the rich and poor even greater. As seen during the elections, decisions and approaches need to be taken if we are to lead our country into a new era, where the Ireland envisioned in the 1916 Proclamation takes solid, tangible form.

Bibliography:
Oxfam (2016), Available at: https://www.oxfam.org/en/pressroom/pressreleases/2016-01-18/62-people-own-same-half-world-reveals-oxfam-davos-report(Accessed 1 February 2016)
Available at: http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined(Accessed 18 February 2016)
Worstall (2016) Available at: http://www.forbes.com/sites/timworstall/2016/01/18/weve-already-solved-oxfams-little-inequality-problem/#476cfcbd6122(Accessed 13 February 2016).
Gilmore (2016) Available at: http://www.progressive-economy.ie/2016/01/for-richer-or-poorer-oxfams-wealth.html(Accessed 10 February 2016).
Credit Suisse (2015) Available at: http://www.protothema.gr/files/1/2015/10/14/ekthsi_0.pdf (Accessed 10 February 2016).
Cohen (2016) Available at: http://www.nytimes.com/2016/01/19/business/economy/wealth-inequality-rising-fast-oxfam-says-faulting-tax-havens.html?_r=0(Accessed 10 February 2016).
Available at: www.the1916proclomation.ie (Accessed 10 February 2016).


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