From the TUC

TUC welcomes Oxfam report on the true cause of poverty: wealth

19 Jan 2013, by in Economics, International

Our friends at Oxfam have issued a report which will guarantee a rather frosty reception at the World Economic Forum in Davos next week. Publishing The Cost Of Inequality: How Wealth And Income Extremes Hurt Us All (not yet available on the web as far as I can tell) is a brave step for a charity to take. It’s a vital element of the fight against poverty – at home and abroad – to look not only at what we can do about the poor, but also what we can do about the rich. Oxfam don’t claim to have all the answers (see below) but they do argue forcefully that we shouldn’t (in Peter Mandelson’s words) be ‘intensely relaxed about people getting rich’ if we want to end poverty and gross inequality.

Welcoming the report, Frances O’Grady said:

“Oxfam are right to draw attention to both ends of the inequality that has grown massively in recent decades. That inequality was a major cause of the global financial crisis as ordinary workers borrowed massively to maintain their living standards and the rich looked for ever riskier loans to put their growing wealth to work. All the evidence is that the more equal societies are, the more productive, more resilient and more free they become.

“Working people and the global poor need a real boost to their incomes if we’re to escape from decades of stagnant growth and social strife. And rich people need to pay their taxes and curb their greed – voluntarily or not. In particular, Oxfam have highlighted the need for stronger unions to provide an effective voice for ordinary people.”

Oxfam report that the richest 1% of the world’s population has increased its income by 60% in the last 20 years. And while the world’s 100 richest people enjoy a net income of £150bn a year, people in extreme poverty live on less than 78p a day. That strikes most people as obscene, but Oxfam are right that as well as causing social unrest, it’s also inefficient – the point made in The Spirit Level by Richard Wilkinson and Kate Pickett.

What makes the Oxfam initiative even more important, however, is the shift from action concentrating on what to do for poor people (such as overseas aid, social protection, public services and so on), Oxfam are advancing proposals that tackle the other end of the income distribution, arguing for:

  • closure of tax havens;
  • more progressive taxation; and
  • a global minimum corporation tax rate.

Oxfam also criticise weak employment laws and advocate decent work and living wages, but – as I indicated above – they recognise that it’s for workers’ own organisations, trade unions, to decide exactly how to address these challenges. They do, though, argue for compliance with the core labour standards of the ILO as the bare minimum.

As well as our co-operation with Oxfam over international development campaigns like Make Poverty History and the current Robin Hood Tax campaign, we welcome the focus they’ve placed on food banks in the UK, and now this report too. Oxfam will be a crucial partner in the struggle against austerity and for a future that works.

TUC