In 2018, the combined wealth of the 26 richest people worldwide was $1.4 trillion.
This equaled the combined wealth of 3.8 billion of “the poorest half of the global population.” According to Oxfam International, on Jan. 20, the 2,208 billionaires (many of whom are in the U.S.) become $2.5 billion dollars richer with each passing day. Meanwhile, the poorest half of the global population sees its worth dwindle on a daily basis.
This is a sad and scary development, but not a new one. There was a widening gap between rich and poor, according to the Census Bureau, in 1980. That gap has increased since that time. In 2007, about 1 percent of the richest families in the U.S. possessed 38 percent of the total net U.S. national worth. On the other hand, the bottom 50 percent of U.S. families possessed a mere 2.5 percent of the wealth. As Zbigniew Brzezinski noted in his book, "Strategic Vision," these trends have “launched the U.S. to the top of global indexes of both income and wealth inequality, making America the most unequal major developed country in the world.”
Apropos of the above, a few weeks ago, the Wall Street Journal asked its readers this question: “If you had the power to solve some of the world’s most pressing issues, if you had the command of the necessary resources, workforces, and energy — what would you do?” About 1,600 individuals (spanning ethnicity, race and gender) responded from 55 nations and 47 states.
The respondents were sanguine and upbeat about the economic picture for the future, but saw worsening divisions for society as a whole. To the question “Which issue should be the government and business leaders’ first priority?" the respondents stated, “the vanishing middle class in the global economy.” (See Michelle Ma, “How to Fix the World in 2019,” Wall Street Journal, Jan. 22).
What can be done to narrow the widening gap between the rich and poor, including the middle class? First, data demonstrate that the 2018 tax cuts increased deficits. The corporate tax cuts help a company’s bottom line, bring about faster short-term growth, but, alas, at the cost of higher deficits. Workers get a small increase in wages at the cost of eventually paying “for the tax cuts themselves” according to Jason Furman in the Wall Street Journal, Dec. 18.
Second, in the past few years, workers’ wages have been flat. However, the top 1 percent has received more than 99 percent of all new income. Such an unequal growth in wages accounts for about 33 percent of the long-term funding shortfall for Social Security, which many retirees depend on for their entire income.
The kicker is this: Congress has the ability to raise the minimum wage to $15 an hour. This will do three things: 1) It will strengthen the Social Security system; 2) help workers make ends meet; and 3) reduce the gnawing chasm between the super-rich and everyone else.
Third, Oxfam International, which consists of 20 charitable organizations, has as its mission to alleviate injustice and global poverty. In its annual report, it suggests that countries increase rates on personal income and on corporations while cutting out tax avoidance by the super-rich and companies. It also recommends that nations have universal healthcare because healthcare has become a luxury only for the rich. About 10,000 people die daily because they can’t get affordable health care, says Oxfam.
Oxfam notes that in some countries, outdated laws keep women out of the job market by having them raise their children or look after sick family members and relatives. India, for example, according to the McKinsey Global Institute, would boost its G.D.P. by $4.5 trillion provided that more women were part of the workforce.
Fourth, the U.S. must use soft power, such as diplomacy and peace-building, to deal with other countries instead of going immediately to the military option. The U.S. has spent $5.6 trillion since 9/11 in its war on terror, yet what have we to show for the loss of American lives and the physical and mental wounds of thousands of veterans? Does our military really need to be in 147 countries around the world? Are countries like Afghanistan, Iraq, and Syria better off today than they were before the wars were started? Do we want to resign our country to “Endless Wars” and alienate our allies and so-called enemies with tariffs and sanctions that only spread discontentment and hatred of our country?
Finally, instead of building walls of separation on our southern border with Mexico, wouldn’t it be a better investment to spend $5.7 billion on humanitarian aid for migrants and refugees in Latin America?
Richard Penaskovic is an emeritus professor at Auburn University, who taught religious studies for 30 years.