As fast-food industry continues to see a surge in child labour violations across the United States, such as McDonald’s and Chick-fil-A, the poor become poorer while the rich become incredibly richer. The latest Oxfam report says the planet’s five wealthiest persons have seen their fortune more than doubled to US$869 billion since 2020 while five billion people (world’s poorest 60%) have been made poorer.

 

The revelation comes as more than 1 in 5 children are engaged in child labour in the world’s poorest countries, while business elites gather this week for the annual World Economic Forum (WEF) meeting in Davos, Switzerland. The rich have gotten so wealthy that it was found that a billionaire is now either running or is the main shareholder of 7 out of 10 world’s biggest companies.

 

Since 2020, the 5 billionaires’ net worth has skyrocketed 114% to US$869 billion, even after taking inflation into account – up from US$340 billion (or 155%) in March 2020. At the rate the wealthiest make money, the world could see its first “trillionaire” within a decade. At the same time, it would take nearly 230 years to eliminate poverty as 5 billion people struggle with inflation and war.

The question is who among the current 5 richest men – Tesla CEO Elon Musk, Bernard Arnault of luxury company LVMH, Amazon founder Jeff Bezos, Oracle founder Larry Ellison and investment guru Warren Buffett – would emerge as the first trillionaire. Of course, it could also be someone not on the list of richest people right now. But when that happens, he or she would possess the wealth equivalent to Saudi Arabia.

 

In other words, the five wealthiest men were growing their fortunes at a rate of US$14 million per hour in the past four years. And if they were to spend US$1 million per day, it would take 476 years for the 5 richest to exhaust all their money. While Musk will take 673 years, Bezos will need 459 to burn his wealth. That probably explains why their new toy is to go explore planet Mars.

 

To put it in another perspective, John D. Rockefeller of Standard Oil fame is widely believed to have become the world’s first billionaire in 1916. Overall, billionaires have seen their wealth grow by US$3.3 trillion (about 34%) since 2020. Some 148 of the world’s largest corporations made nearly US$1.8 trillion in profits in the 12 months leading up to June 2023 alone – 52.5% higher than 2018-2021 average.

The best part, according to Oxfam, the top 1% own 43% of the world’s financial assets. In the U.S., this group of mega rich people owns 32%, while in Asia, it’s 50%. In the Middle East, the top 1% holds 48% of the financial wealth, while in Europe, it’s 47%. Oil and gas industry, pharmaceutical companies and the financial industry were the biggest winners.

 

Based on Forbes, Musk is currently the richest man on planet Earth, with a personal fortune of just under US$250 billion – a mind-boggling increase of 737% from March 2020 (after accounting for inflation) despite Covid-19 pandemic. Not bad for a man who was first listed on the Forbes Billionaires List in 2012, with a net worth of just US$2 billion His companies included SpaceX, Tesla, Twitter (rebranded as “X”) and Boring Company.

 

Bernard Arnault, the 74-year-old founder, chairman and CEO of LVMH Moët Hennessy Louis Vuitton – the world’s largest luxury goods company – and his family had a net worth of US$191 billion, up 111%. Amazon founder Jeff Bezos, meanwhile, had a fortune of US$167 billion, up 24%, while Oracle founder Larry Ellison’s wealth skyrocketed to US$145 billion, up 107%.

Billionaire and investor Warren Buffett, the co-founder, chairman and CEO of Berkshire Hathaway, saw his net worth jumped 48% to US$119 billion. The Oracle of Omaha’s top investment included Apple, Bank of America, American Express, Coca-Cola and Chevron. The portfolio in Apple alone was valued at a staggering US$175 billion.

 

The inequality is not a coincidence. Rather, the billionaires ensure corporations, of which they were major shareholders, deliver more wealth to them at the expense of everyone else even as millions of workers faced a cost of living crisis due to inflation and salary cuts. The Russia’s invasion of Ukraine in Feb 2022 has sent energy and food prices soaring.

 

Nearly 800 million workers across 52 countries saw their salaries over the past two years fail to keep up with inflation, having lost a combined US$1.5 trillion over the last two years – equivalent to 25 days of lost annual income for each worker. Worse, the study also shows that of the world’s 1,600 largest corporations, just 0.4% of them have publicly committed to paying workers a living wage and to supporting a living wage in their value chains.

As the super-billionaires will be meeting at the Davos events to champion “stakeholder capitalism”, or to maximize profits, Oxfam Head of Inequality Policy Max Lawson said – “What we know for sure is that today’s extreme system of shareholder capitalism, which puts ever-increasing returns to rich shareholders above all other objectives, is driving inequality”.

 

For every US$100 of profit made by 96 major corporations between July 2022 and June 2023, US$82 was paid out to enrich shareholders. The super-rich and powerful were not interested in redistributing wealth among workers and society. Not only billionaires are US$3.3 trillion richer than in 2020, their wealth has actually grown 3 times faster than the rate of inflation.

 

Amitabh Behar, Oxfam International’s interim executive director, said – “Public power can rein in runaway corporate power and inequality – shaping the market to be fairer and free from billionaire control. Governments must intervene to break up monopolies, empower workers, tax these massive corporate profits and, crucially, invest in a new era of public goods and services.”

He said – “Runaway corporate and monopoly power is an inequality-generating machine: through squeezing workers, dodging tax, privatizing the state, and spurring climate breakdown, corporations are funnelling endless wealth to their ultra-rich owners. But they’re also funnelling power, undermining our democracy and our rights. No corporation or individual should have this much power over our economies and our lives – to be clear, nobody should have a billion dollars”.

 

But it’s easier said than done. The gap between rich and poor is likely to increase simply because governments worldwide are working hand-in-glove with the rich by making deliberate political choices that enable and encourage this distorted concentration of wealth, even as hundreds of millions of people live in poverty.

 

Oxfam estimates that a wealth tax on the world’s millionaires and billionaires could generate US$1.8 trillion a year. Governments should also ensure the universal provision of healthcare and education. However, such measures to help the poor go against the capitalist system. To add salt to injury, this same richest 1% emits as much carbon pollution, on a global level, as the poorest two-thirds of humanity.

 

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January 15th, 2024 by financetwitter

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