Oxfam reported that over the past two years nearly 800 million workers around the world saw their wages fail to keep up with inflation, resulting in an equivalent average loss of 25 days of income per worker.
Everyone who is interested in the distribution of national incomes and is seriously concerned about the persistently declining share of worker incomes will want to read the report presented to the recent World Economic Forum (WEF) by the aid organization Oxfam International.
The report, prepared by Oxfam’s inequality policy staff, contains data and analyses that are highly disturbing. The report’s data sources included the International Labor Organization (ILO), the World Bank and Forbes magazine’s annual list of the world’s richest individuals.
Oxfam reported that over the past two years nearly 800 million workers around the world saw their wages fail to keep up with inflation, resulting in an equivalent average loss of 25 days of income per worker.
Oxfam also reported that, even as hundreds of millions of workers faced a cost-of-living crisis as inflation led to real wage cuts, 48 top corporation made profits totaling $1.8 trillion—a figure 52 percent higher than the preceding three-year annual average—making possible hefty dividend payouts to shareholders.
Citing specific individuals, the Oxfam report stated that the inflation-adjusted surge in the wealth of Elon Musk, Bernard Arnault, Jeff Bezos, Larry Ellison and Warren Buffett was driven by the sharp gains in the market values of Tesla, LVMH, Amazon, Oracle and Berkshire Hathaway shares.
In contrast, Oxfam reported that only 0.4 percent of the world’s 1,600 top corporations have made a public commitment (1) to pay their workers a living wage and (2) to support a living wage in their value chains.
Oxfam noted that the recent WEF was intended to highlight stakeholder capitalism, which, WEF says, “defines a corporation as being not just about maximizing profits but also about fulfilling human and social aspirations as part of the broader social system.”
In his commentary Oxfam’s interim executive director said: “This inequality is no accident. The billionaire class is ensuring that corporations deliver more wealth to them at the expense of everyone else.”
He went on to say: “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.”
The picture that Oxfam International has painted is accurate. On one hand, the real value of the incomes of workers, who are not capital-market players, gets diminished by persistent inflation; on the other hand, the wealth of corporate shareholders, steadily gets pushed upward by the value-increasing effect of inflation. This situation is economically and morally unacceptable, but it is the stark reality.
What is the answer? One of the remedial policy actions proposed by Oxfam is a government program of promoting and assisting worker ownership of corporate stock.
That is a move in the right direction, but will be very difficult to implement.
One thing is certain. The economic policymakers have to take policy actions to mitigate the perverse impact of inflation on the incomes of billionaires and workers.
(llagasjessa@yahoo.com)