World’s richest 0.1% increased their wealth by as much as the poorest 50% | National Union of Public and General Employees

World’s richest 0.1% increased their wealth by as much as the poorest 50%

"The growing body of credible evidence about income inequality is indisputable. But  there is also a growing consensus among economists that inequality is not inevitable. It can be stopped if countries legislate progressive income taxes, and by aggressively investigating and stopping tax cheaters and tax avoiders." — Larry Brown, NUPGE President.

Ottawa (18 Dec. 2017) — Another day, and another report on growing global inequality is making headlines.

As reported in the Guardian and Daily Mail newspapers, The World Inequality Report warned that inequality had ballooned to “extreme levels” in some countries and said the problem would only get worse unless governments took coordinated action to increase taxes and prevent tax avoidance.

Published on December 14 by economist Thomas Piketty, the report drew on the work of more than 100 researchers around the world. It found that the richest 1% of the global population captured 27% of the world’s wealth growth between 1980 and 2016.

Richest of the rich increased their wealth by even more

And the richest of the rich increased their wealth by even more:

  • the top 0.1% gained 13% of the world’s wealth
  • the top 0.001% — about 76,000 people — collected 4% of all the new wealth created since 1980.

“The top 0.1% income group (about 7 million people) captured as much of the world’s growth since 1980 as the bottom half of the adult population,” the report said. “Conversely, income growth has been sluggish or even nil for the population between the global bottom 50% and top 1%.”

Without political action, wealth gap will continue to grow

The report warns that unless there is globally coordinated political action, the wealth gap will continue to grow. “The global top 1% income share could increase from nearly 20% today to more than 24% by 2050,” the report said. “In which case the global bottom 50% share could fall from 10% to less than 9%.”

Inequality is “not inevitable”

However, the economists said that increasing inequality was “not inevitable” if countries brought in progressive income tax. “It not only reduces post-tax inequality, it shrinks pre-tax inequality by discouraging top earners from capturing higher shares of growth via aggressive bargaining for higher pay.” The authors said taxation alone was not enough to tackle the problem because the wealthy can avoid and evade taxes, as shown by the recent Paradise Papers investigation. The report said 1/10th of the world’s wealth was held in tax havens.

"The growing body of credible evidence about income inequality is indisputable," said Larry Brown, President of the National Union of Public and General Employees Union (NUPGE). "But  there is also a growing consensus among economists that inequality is not inevitable. It can be stopped if countries legislate progressive income taxes, and by agressively investigating and stopping tax cheaters and tax avoiders."


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE