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Increasing gap between rich and poor

Manchester University Press will publish a new book in 2016. Licensed Larceny: Infrastructure, Accumulation and the Global South by Nicholas Hildyard. Here some quotations from background paper for this book. The author calculates gap in incomes between rich and poor in global scale.

In country after country, the already vast gulf between rich and poor has widened dramatically over the past thirty years. The incomes of the rich are skyrocketing, while those of poorer people stagnate or plummet; and the lion’s share of global wealth is increasingly concentrated in fewer and fewer hands.
The figures for income tell a dismal story. In 1992, the UN Development Programme (UNDP) produced a diagram depicting how much each fifth of the world’s population earned: 82.7 per cent of total world income went to the top fifth, whilst the bottom fifth got a paltry 1.4 per cent. The resulting ‘champagne glass’ image became a symbol of the vast gap between rich and poor. In 2007, researchers at the United Nations Children’s Fund (UNICEF) revisited the figures and found that the percentages had barely shifted, despite global economic output doubling: in the seventeen years between 1990 and 2007, the bottom billion increased their share of global income by just 0.18 percentage points. The UNICEF researchers concluded that, at this rate of progress, ‘it would take more than eight centuries (855 years to be exact) for the bottom billion to have ten percent of global income’.
In the twenty years between 1988 and 2008, the incomes of the top 1 per cent worldwide increased by almost two-thirds, and that of the super-rich (the top 0.01 per cent) rose even faster. In 2007, just before the global financial crisis, the pay packets of the world’s richest 1 per cent (some 61 million individuals, mostly concentrated in Europe and the US) totalled as much as the combined earnings of the world’s poorest 3.5 billion people (roughly the total number of people living in India, China, the United States, Brazil, Indonesia and Pakistan).
With the incomes (including bonuses) of the Chief Executive Officers (CEOs) of the top 350 US companies now some 300 times what US workers earn in a year, it would take the average US worker (note ‘average’, not the lowest paid) a month to earn what many CEOs earn in just an hour; and it would take several years before they came close to earning the $97,000 that the 400 wealthiest company bosses paid themselves hourly in 2009. And that is without taking into account the additional income that most CEOs and their families ‘earn’ from investments.
As the incomes of the rich rise, and more and more workers are forced into low-paid, precarious jobs, the share of after-tax household income for the top 1 per cent in the US more than doubled, from nearly 8 per cent in 1979 to 17 per cent in 2007. Those of the top 0.01 per cent saw a whopping 685 per cent rise in real incomes. Over the same period, according to the Organisation for Economic Co-operation and Development, the share of the bottom 20 per cent of the population fell from 7 per cent to 5 per cent. It is a pattern that is repeated the world over. For example, India, home to one-third of the world’s poorest people, has seen the number of billionaires increase from just two in the 1990s to 65 in early 2014; while 42 per cent of its 1.2 billion people continue to live on less than $1.25 a day, the top 10 per cent now earn twelve times more than the bottom 10 per cent, compared to six times some twenty years ago.
But income is only part of the inequality story. Unlike poorer people, the rich rarely rely solely on what they take home in their pay packets for their spending money: indeed, many have a substantial income without ever having worked at all. In 2008, only 19 per cent of the income of the 13,480 Americans making over $10 million a year came from wages and salaries. The rest came from dividends, interest and rents derived from using accumulated assets (such as shares, property and cash deposits) to extract wealth from the goods and services produced by others.
In many countries, inequalities in wealth are even wider than those in income, and they are growing. According to Swiss investment bank Credit Suisse, global household wealth totalled $263 trillion in mid-2014, less than 1 per cent of which was owned by the ‘bottom’ (in distributional terms) half of humanity, one-quarter of whom live in India. In sharp contrast, the top 10 per cent owned 87 per cent of the world’s wealth, and the top 1 per cent (those with more than $798,000) owned 48.2 per cent, amounting to $126 trillion or 47.5 times the total wealth of the bottom half of the world’s population. Within that global elite, a super-elite of some 199,200 Ultra High Net Worth Individuals (88 per cent of them men, and most of them residing in the US or Europe) own $28 trillion, equivalent in 2014 to 37 per cent of the world’s total annual economic output.
Oxfam calculates that, in 2013, just 85 people – the number of people you could get into just one London double-decker bus – controlled as much wealth as the bottom half of the world’s adult population. A year later, the same amount of wealth was controlled by just 67 people Microsoft’s Bill Gates had as much wealth as 156 million people in the bottom 50 per cent had.
The wealth gap between the richest and poorest countries is also growing. During the colonial period from 1820 to 1911 the income gap between the richest countries and the poorest countries widened from 3:1 to 11:1. By 1950, at a time when many countries were achieving independence, it was 35:1. Post-independence, the gap has not narrowed but increased: in 1999, the United Nations Development Programme estimated it was 79:1.

See more: http://www.thecornerhouse.org.uk/sites/thecornerhouse.org.uk/files/Global%20Looting%20A%20Snap%20Shot_0.pdf

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