More billionaires but wealth gap between rich and poor widens

About two-thirds of South Africa’s wealth is held by the top 1% and about 90% is held by the top 10% — an enormous concentration of wealth (Bloomberg)

About two-thirds of South Africa’s wealth is held by the top 1% and about 90% is held by the top 10% — an enormous concentration of wealth (Bloomberg)

In South Africa, it takes 4.5 days for the best-paid executive at Shoprite to earn what a temporary farm worker earns in their life, that is assuming they live up to 50 years, according to an Oxfam report on inequality.

The report, released on Monday, says, in 2017, worldwide there was an unprecedented growth in dollar billionaires, with one billionaire produced every second day, putting the total at 2 043. They accumulated $762-billion during the past year — at a rate six times faster than that of the average wage of ordinary workers.

“The South African situation mirrors global trends, which in many ways is worse in many instances,” said Gilad Isaac, a researcher at the University of Witwatersrand.

About two-thirds of South Africa’s wealth is held by the top 1% and about 90% is held by the top 10% — an enormous concentration of wealth, he said.

The report found, in 2017, 82% of all growth went to the top 1% and the bottom half saw no increase at all.

“We can confidently say that, by the end of the four-day meeting in Davos, billionaires’ fortunes would have well swollen by $800-billion. This is enough money to lift 66-million people globally out of poverty for the year, the executive director of Oxfam, Siphokazi Mthati, said.

The report also says the number of billionaires in Africa grew from eight in 2010 to 25 in 2017.

“We know that some of those billionaires in are this country, with their combined wealth having doubled from $28-billion to $80.3-billion over the same period,” she said.

Thembinkosi Dlamini, the head of economics at Oxfam, said one of the shocking findings was that the inequality crisis continues to spiral out of control, with the wealthy accumulating wealth faster than the poor. This is most prevalent in the fashion and retail industries.

The widening gap between the rich and the poor is underpinned by the shrinking of the rights of workers, whose right to protest is also being curtailed.

“This gives corporations more power and influence to ensure that government policies work in their interest,” Dlamini said.

The report also found women are subjected to more systematic discrimination in the workplace than men.

Oxfam said governments should take action to eliminate gender pay gaps and protect the rights of women workers.

Dlamini said women continue to have limited access to land, property and other productive assets, which means they only have recourse to their labour and, therefore, find themselves in the lowest paid and subjected to the most insecure and unsafe working conditions.

The report recommends governments should create a more equal society by prioritising workers and small-scale food producers instead of the rich and powerful. The rich must pay higher taxes and governments must crack down on tax avoidance.

It also says governments could implement measures such as limiting the number shares issued to shareholders and executives to ensure that all workers receive a decent wage and enjoy a decent quality of life.

It says governments should increase spending on public services such as healthcare and education.

Thulebona Mhlanga is an Adamela Trust trainee financial reporter at the Mail & Guardian

​Thulebona Mhlanga

​Thulebona Mhlanga

Thulebona Mhlanga is financial trainee journalist  at the Mail & Guardian, currently enrolled for a masters in politics at the University of Johannesburg. In addition to her fervent interest in business writing, reading and educating others around issues of financial literacy, she volunteers her time to projects assisting women and promoting social justice.  Read more from ​Thulebona Mhlanga

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