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Cape Town - Seven out of ten South Africans believe it is the government’s responsibility to reduce the gap between rich and poor, according to a new report on global inequality by Oxfam International.
The report found that 2017 was one the best years yet for the world’s dollar billionaires, with a new billionaire minted every two days.
“Billionaires saw their wealth increase by $762bn in 12 months. This huge increase could have ended global extreme poverty seven times over,” stated the report’s authors.
Oxfam said that over 80% of all wealth created in 2017 went to the world’s wealthiest 1%, while the bottom half of the world’s population saw no relative increase in wealth at all.
To conduct its research Oxfam relied, in part, on a survey of over 70 000 people in 10 countries, including South Africa.
In South Africa 69% of respondents agreed or strongly agreed that it is the government’s responsibility to reduce the gap between the rich and the poor. This was about 10% higher than the global average of 60%.
Meanwhile, 79% of South Africans agreed that the gap between the rich and the poor needs to be addressed "urgently or very urgently".
The authors also reported that global wealth was increasingly becoming skewed towards people who were already rich.
“In South Africa, the top 10% of society receives half of all wage income, while the bottom 50% of the workforce receives just 12% of all wages,” it said.
CEO need pay cuts
Oxfam found widespread agreement that company bosses needed pay cuts.
“Across all countries, respondents think CEOs should on average take a 40% pay cut. In countries like the UK, US and India, respondents think CEOs should take a 60% pay cut.”
It also found that people underestimated how much CEO's were paid, and underestimated how much more CEO's were paid than average workers.
Oxfam said that one way to decrease inequality was to increase taxes on the rich. It praised South Africa and Chile for having done so, saying other states should follow SA's lead.
While it did not specifically say which taxes in SA had been increased, in his 2017 budget then Minister of Finance Pravin Gordhan announced a new "super tax bracket" of 45%.
Oxfam said that while inequality was growing globally, there was also good news for the poorest of the poor.
In the 20 years between 1990 and 2010, the number of people living in extreme poverty – which is calculated as less than $1.90 a day - had halved, and continued to decline since then, it said.
“This tremendous achievement is something of which the world should be proud,” stated the report's authors. However they warned that the poorest of the poor could easily fall back into extreme poverty.
"It is also the case that those who have been lifted out of extreme poverty often remain very poor, in debt and struggling to feed their families. Many may be only one step away from slipping back. More than half of the world’s population lives on between $2 and $10 a day."
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