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Oxfam tackles extreme inequality through taxes and the minimum wage

Credit: Oxfam

The six years since the global economic crisis have seen people and countries struggle. Things are getting better and the world is recovering, but the wealthiest people in the world have done exceptionally well, says Oxfam. The rate of economic inequality is getting worse around the world, and something needs to be done immediately to prevent future problems, says the organization’s new report Even it Up: Time to End Extreme Inequality.

Increasing inequality poses a problem to all people, especially the poor. There is evidence that connects high economic inequality with low social mobility. If the world wants to be serious about ending extreme poverty, changes must be made to make it easier, not harder, for people to shed poverty for good. The problem is not just concentrated in developing countries. In the United States, roughly half of children born into low-income households will grow up to have low-income households of their own.

“The extreme inequalities in incomes and assets we see in much of the world today harms our economies, our societies, and undermines our politics,” says Nobel Prize winning economist Joseph Stiglitz, in the report. “Whilst we should all worry about this it is of course the poorest who suffer most, experiencing not just vastly unequal outcomes in their lives, but vastly unequal opportunities too.”

Global income distribution by percentile of population. (Credit: Oxfam)

Global income distribution by percentile of population. (Credit: Oxfam)

Wealth is so concentrated that the richest 85 people in the world have as much money as the poorest 50%. Their wealth keeps growing. According to Oxfam the top 85 saw their collective wealth grow by $668 mill a day over the last year. By taxing the 1,654 billionaires in the world 1.5% of their wealth, some $74 billion could be raised each year.

Increasing taxes is only one of nine recommendations issued by the report. To end extreme inequality, Oxfam recommends:

  1. Governments should make ending inequality a top priority;
  2. Decrease the gender wage gap;
  3. Increase the minimum wage;
  4. Tax people for wealth, capital and income; not labor and consumption;
  5. Eliminate tax loopholes for the rich;
  6. Universal free health and education by 2020;
  7. Decrease prices of medicines through research and development reforms;
  8. Universal and permanent social safety nets;
  9. Spend development dollars on ending inequality

The Even it Up campaign, launched by the report, will work to see that the recommendations are implemented by governments.  Oxfam told Humanosphere it will organize events, in places like Washington D.C., to keep the conversation going. It will also lean on the United States to end tax avoidance and the use of offshore tax havens, by supporting corporate tax transparency, while at the G20 meetings in Australia.

The percentages of low-wage workers who would benefit from a raise in the minimum wage to $10.10. The darker colors indicate higher concentrations of low-wage workers. See the interactive map here.

The percentages of low-wage workers who would benefit from a raise in the minimum wage to $10.10. The darker colors indicate higher concentrations of low-wage workers. See the interactive map here.

Then there is the minimum wage. Oxfam will call on the US to raised the federal minimum wage to $10.10 an hour. Enacting such a change would immediately give more than 25 million U.S. workers a raise. It is also bound to meet some political opposition that is likely to increase. Next week’s mid-term elections are expected to see the Republican party attain control of both legislative bodies, the House and the Senate. Members of the party have been less than enthusiastic about the idea of raising taxes and the minimum wage.

“I’m tired of hearing about the minimum wage,” said New Jersey governor Chris Christie in a keynote speech at the U.S. Chamber of Commerce. “I really am. I don’t think there’s a mother or a father sitting around the kitchen table tonight in America saying, ‘You know, honey, if our son or daughter could just make a higher minimum wage, my God, all of our dreams would be realized. Is that what parents aspire to for our children?”

Oxfam is betting that talking about inequality will bring more people to their side of the argument. It is buoyed by the fact that half of Americans told a Pew survey that they think that the gap between rich and poor is a big problem.

“We sincerely believe that many poor and rich people alike will join our effort to fight inequality so that everyone has the opportunity to get ahead,” said Laura Rusu, Oxfam America Press Officer, to Humanosphere.

“We are joining a groundswell of voices, such as billionaires like Warren Buffet, venture capitalist Nick Hanauer, economists like Joseph Stiglitz and Jeffrey Sachs, faith leaders like the Pope, the heads of institutions like Christine Lagarde of the IMF, and millions of ordinary people, to demand that leaders tackle extreme inequality before it is too late.”


About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]