Unions and Global Fight Inequality Alliance: Growth in extreme wealth deepens social divisions

Extreme social divisions are exposed in the annual World Wealth Report which shows the super-rich are getting even richer, while the world’s poorest are left behind.

The release of the World Wealth Report from Capgemini shows that times have never been better for the world’s wealthiest – since 2009 more than 4.5 million new millionaires have been created, rising to a total of 15.4 million millionaires across the world last year. Yet while the wealthy prosper, 702 million people living in extreme poverty [1] are being left behind due to a broken economic system, warned a global alliance of international organisations including the International Trade Union Confederation.

The report also reflects on a failure to predict the growing anger across the world towards those with extreme wealth, faced with rapidly rising inequality and fuelled by scandals such as the Panama Papers revealing the scale of tax avoidance by very rich people. Private equity, swollen with investments from wealthy individuals, is on the rise and threatening to undermine public services.

Low interest rates have seen private equity firms grow from managing $1 trillion in 2008 to $4.3 trillion – more than the value of Germany’s gross domestic product according to the advisory firm Triag.

“When working people and their families have the security of jobs, living wages and social protection, they will regain hope and trust in the future.

“What the one per cent don’t understand, or don’t care about, is that to stand on an island of wealth as conflict, economic desperation and social marginalisation escalate will only guarantee an increase of insecurity.

“When global GDP has trebled since 1980 yet wages have slumped and inequality is now at historic levels, the economic model is broken,” said Sharan Burrow, General Secretary, International Trade Union Confederation.

The 2016 World Wealth Report found:

• Global High Net-worth Wealth Individual (HNWI) wealth expanded fourfold over the last 20 years to reach USD 58.7 trillion in 2015.
• Against the backdrop of growing inequality in many countries, Asia-Pacific surpassed North America to become the region with the largest amount of HNWI wealth. Faltering growth in the Americas has slowed the overall rate of HNWI wealth expansion.
• Japan and China are the engines of both Asia-Pacific and global growth.
• Global HNWI wealth is projected to surpass USD 100 trillion by 2025.

The ITUC 2016 Frontlines Poll on wages and inequality in nine countries found one in ten people are falling through the cracks, without enough money to cover their basic needs: housing, food and electricity.

“Increasing inequality not only steals wealth from the majority. When nearly half the population in the nine of the world’s largest economies have no money to spend, economies will not grow.

“Tackling inequality, kick starting economies and re-establishing a measure of social justice starts with minimum wages on which people can live with dignity; strengthening collective bargaining; and ensuring labour rights, the rule of law and social protection,” said Sharan Burrow.

The ITUC has joined with the Fight Inequality Alliance to strengthen global and national campaigns to fight inequality and build a global movement to counter the excessive power and influence of the one per cent and achieve a fairer and more sustainable world.

The members of the Fight Inequality Alliance are ActionAid; ACT Alliance; Amnesty International; CIVICUS; FEMNET; Greenpeace International; the ITUC and Oxfam.

The World Wealth Report is released annually by Capgemini analysing high net worth individuals, their wealth and the global economic context www.worldwealthreport.com.

(1) 702 million people: estimated by the World Bank, Oct 2015, based on $1.90 extreme poverty line. Explained here