The Final Call

The rich get richer and the poor 'left holding the bag'

By Barrington M. Salmon -Contributing Writer- | Last updated: Jan 31, 2018 - 9:41:15 AM

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In 2017, 82 percent of all of the growth in global wealth flowed to the top one percent, while billions of men, women and children who comprise the bottom 50 percent saw no increase at all.

In 2016, annual share dividends from the parent company of fashion chain Zara to Amancio Ortega, the world’s fourth-richest man were worth approximately $1.28 billion, about 1.3 billion Euros. And Stefan Persson, whose father founded H&M, received about $705 million in share dividends last year.

By contrast, Anju, who earns just over $900 a year, sews clothes in Bangladesh for export. She often works 12 hours a day, until late at night. She often has to skip meals because she hasn’t earned enough money.

Americans aren’t immune from the scourge. In 2016, according to the Bergen Center, the overall poverty rate in the U.S. was 13.5 percent—43.1 million people. But when the near-poor and new poor are added, the number of Americans who live in poverty is in excess of 150 million with Blacks, Hispanics, children and seniors being hit particularly hard. The middle class has been hollowed out as millions of ordinary Americans who played by the rules, have seen their lives affected by stagnant wages, the loss of millions of jobs to globalization and automation, the shredding of the social safety net by Republican politicians and corporations hiding trillions of dollars in overseas tax havens.

Those who can find jobs often have to contend with low wages, less than fulltime hours and no benefits. Many business owners’ only concern is the bottom line and increasing profits.

With fiscal year 2016, Walmart’s revenue was $482.1 billion. The company, the largest publicly-owned retail company in the world, employing about 2.2 million employees worldwide, has the dubious distinction with Amazon—which grossed $128 billion last year—of having employees who are paid so little that they qualify for food stamps and other forms of public assistance. The Walton family is worth $130 billion.

This troubling income disparity is detailed in an Oxfam report, titled, Reward Work, Not Wealth, released in mid-January which documents in stark detail the widening chasm between rich and poor, and chronicles the mélange of reasons why despite working hard, most of the poor and middle class people remain mired in poverty.

“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system,” said Winnie Byanyima, executive director of Oxfam International. “The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors.”

Ms. Byanyima said female workers often find themselves at the bottom of the heap. Across the globe, women consistently earn less than men and are usually in the lowest paid and least secure forms of work. By comparison, she said, nine out of 10 billionaires are men.

“Oxfam has spoken to women across the world whose lives are blighted by inequality. Women in Vietnamese garment factories who work far from home for poverty pay and don’t get to see their children for months at a time,” Ms. Byanyima said. “Women working in the U.S. poultry industry who are forced to wear diapers because they are denied toilet breaks.” 

Oxfam notes that 2017 saw the biggest increase in the number of billionaires in history, with a billionaire being made every two days. There are currently 2,043 billionaires worldwide. Billionaires also saw a huge increase in their wealth, an increase that was enough to end extreme poverty seven times over.

This extraordinary wealth that is concentrated in the hands of a select few is erected on the shoulders of low-paid workers who are paid poverty wages and denied basic rights.  

“It is being built on the backs of workers like Dolores in chicken factories in the U.S., suffering permanent disability and unable to hold their children’s hands. It is being built on the backs of immigrant hotel cleaners like Myint in Thailand, sexually harassed by male guests and yet often being told to put up with it or lose their jobs,” said the report.

The report was launched as 3,000 political and business elites gather for the annual World Economic Forum in Davos, Switzerland.

The impact, as stated by Reward Work, Not Wealth is clear: employees working long hours at a minimum or sub-minimum wages; people working without benefits reveals how the global economy enables a wealthy elite to accumulate vast fortunes while hundreds of millions of people are struggling to survive. 

Oxfam’s report outlines the key factors driving up rewards for shareholders and corporate bosses at the expense of workers’ pay and conditions. These include the erosion of workers’ rights; the excessive influence of big business over government policymaking; and the relentless corporate drive to minimize costs in order to maximize returns to shareholders.

According to the report, billionaire wealth has risen by an annual average of 13 percent since 2010—six times faster than the wages of ordinary workers, which have risen by a yearly average of just two percent.

The number of billionaires rose at an unprecedented rate of one every two days between March 2016 and March 2017.

It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. And in the U.S., it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.

Howard University Political Science Professor Dr. Wilmer Leon, III, expects the economic vice will tighten and the situation will get worse before it gets better.

“This will be the status quo for the foreseeable future,” he told The Final Call. “It will get worse before we see any real evidence of things getting better. It’s going to take a lot more suffering and deprivation before people come to realize that this is our world not theirs.”

“We’re not servants for an elite group of corporatists. What Donald Trump is using as a tactic of leverage is race. It has always been used in this country as a source of division and a distraction from the real issue of labor being taken over by management. The political elite tells White people, ‘you have it better because you ain’ no nigger.’ ”

Both Prof. Leon, host of Inside the Issues on Sirius/XM, and the Rev. Derrick Harkins said the political elite and the wealthy should have security concerns as the inequalities breed unrest.

“It’s amazing because throughout history, imbalance has always been dangerous, socially and economically. Here we have the one percent on one end and so many people on the far end,” said Rev. Harkins, senior vice president for Innovation in Public Programs at Union Theological Seminary in New York. “This imbalance is not just dangerous but immoral. We have to get corporate leaders to understand that being equitable amounts to fairness and equity.”

“All of us benefit when there’s fairness. We can’t ever have a fair society with such extremes. In theology, if you are solely wrapped up in possessions, that is a road to failure. It’s disheartening and threatening to see what’s going on. The U.S. is pretty isolated but there is real unrest and instability elsewhere. The outcome could be very troubling if we don’t address it,” said Rev. Harkins.

Prof. Leon said the Jan. 16 report indicates that eight men own the same wealth as 3.7 billion people.

“I can’t even begin to describe how atrocious it is and impact on large numbers of people,” he said. “If you ask economists and experts what is the biggest threat it’s security. The issue has to do with the increased accumulation of wealth. And the immigration debate has to do with people trying to improve their standard of living, quality of life.”

He explained that these wealthy men get the resources to generate their wealth from Africa—South Africa for diamonds and the Republic of Congo for seven or eight other important minerals.

“These countries, unfortunately, are not able to maximize the presence of these raw materials, because the raw material is extracted and sent overseas to be processed, then sold on the world market,” Prof. Leon said. “So you have a one carat raw diamond mined in South Africa sent to India, Israel or Switzerland to be cut into stones and sold in Brussels.”

“White supremacy plays an integral role in this, as does ethnocentrism. It’s not an accident that former colonial powers, now neo-liberals, are preying on the resources and human capital in China, Vietnam, and Central and South America. Nobody cares that people are suffering or the conditions under which they live. Oxfam is trying to change balance of power of globalization and exploitation.”

D.C. Attorney Quentin Driskell surmised that making changes on the ground would make a definable difference.

“I think any new contracts like in Africa with extractive industries, it makes sense that there would be provisions for local sourcing. Very little comes from local community,” said Mr. Driskell, a criminal defense and employment discrimination lawyer. “There should be some type of apprenticeship, training and mentorship. They also need to start sourcing from the local community. That has potential because once you learn, that provides a certain amount of independence and self-sufficiency. It’s possible, though, that these contracts might be a violation of trade agreements.”

“What no one seems to be doing is attacking the corporations themselves. People should start looking at corporations and revoke their charters at the local level. For example, pharmaceutical reps pitching Oxycodin said it wasn’t addictive. These corporations have been lying to you. And suing them doesn’t really stop them because it’s built into the business model. But revocations would be one solution.”

According to Forbes magazine, in 2007, the top 20 percent of the wealthiest Americans owned 80 percent of all financial assets, the richest one percent population owned 35 percent of the country’s total wealth, and the next 19 percent owned 51 percent. Thus, the top 20 percent of Americans owned 86 percent of the country’s wealth and the bottom 80 percent of the population owned 14 percent. In recent years, that gap has widened.

At the same time, the stock market has roared to 26,500 points, corporations, insurance companies and banks—many whose greed and reckless actions triggered the 2007-08 meltdown—are awash in hundreds of billions of dollars. And the general public is deeply angered by crony capitalism, corporate greed and the recent passage of tax theft masquerading as tax reform that Republican leaders engineered that shifted $1.5 trillion from the middle class to the wealthiest one percent.

“What’s playing out on the world stage we’re watching that play out here,” Rev. Harkins said. “The sad thing is that men and women who voted for Trump are excitedly waiting. I recently read an article about the coal industry and they’re feeling betrayed. The rich will get rewards. Do the others think they’ll get some of those spoils? Some operate under this illusion. Some people mistakenly think that they’ve been invited to party but they never got an invitation.”

Ms. Byanyima said people were sold the idea that trade-fueled growth would spread around the world, carried by democracy, on a rising tide that would “lift up all boats” but that failed and over time, the unspoken contract between the elites and the 99 percent—that unfettered market globalization and liberalization should benefit us all—has been broken.

She said government officials must begin to protect those they purport to serve by strengthening labor laws and being proactive in ensuring that workers get a living wage and work in safe environments and decent conditions.

No one should expect corporate and political leaders to suddenly become enlightened, Ms. Byanyima said, but the answer lies in public pressure, tougher laws and governments taking control again by using regulations to impose business ethics. In addition, the public, advocates and activists also have to support and encourage more business trailblazers, such as the multibillion-dollar Mondragon in Spain and Amul in India, which as considered leading innovative models based on the equity-worker-owned companies they’ve allowed to develop.

“Globalization has lifted many people out of the most abject poverty and we celebrate that,” Ms. Byanyima said. “But it has been even more successful in boosting an elite few into superyachts stuffed with stupendous wealth, while dumping hundreds of millions of people onto the flotsam and jetsam at the bottom. We are beginning to be left to trust that those at the top will rescue those below. But the worst-case scenario is, they won’t. There will be no value in it. “The masses will be left adrift to fend for themselves. It’s up to us all to make sure that doesn’t come to pass.”