(Touching albeit distracting naivety from Oxfam's CEO: “/I am optimistic
that there will be change. A few years ago the idea that extreme poverty
was harmful was on the fringes of the economic and political debate. But
having made the case we are now seeing an emerging consensus among
business leaders, economic leaders, political leaders and even faith
leaders/.” Luckily though, most of the world needs no such reality
check, as the Edelman survey below finds "/alarming evaporation of trust
across all institutions, reaching the lows of the Great Recession in
2009. Trust in government, business, media and NGOs in the general
population is below 50 percent in two-thirds of countries/.")
New Oxfam report says half of global wealth held by the 1%
Oxfam warns of widening inequality gap, days ahead of Davos economic
summit in Switzerland
*
Larry Elliott <http://www.theguardian.com/profile/larryelliott>,
economics editor, and Ed Pilkington
<http://www.theguardian.com/profile/edpilkington>
* The Guardian <http://www.guardian.co.uk/theguardian>, Monday 19
January 2015
Davos The Swiss ski resort of Davos, home to the annual meeting of the
World Economic Forum. Photograph: Christian Kober/Robert Hardi/REX
Billionaires and politicians gathering in Switzerland this week will
come under pressure to tackle rising inequality after a study found that
– on current trends – by next year, 1% of the world’s population will
own more wealth than the other 99%.
Ahead of this week’s annual meeting of the World Economic Forum in the
ski resort of Davos
<http://www.theguardian.com/business/2015/jan/18/seven-themes-dominate-davos-climate-change-political-instability-2015>,
the anti-poverty charity Oxfam said it would use its high-profile role
at the gathering to demand urgent action to narrow the gap between rich
and poor.
The charity’s research, published on Monday,
<http://policy-practice.oxfam.org.uk/publications/wealth-having-it-all-and-wanting-more-338125>shows
that the share of the world’s wealth owned by the best-off 1% has
increased from 44% in 2009 to 48% in 2014, while the least well-off 80%
currently own just 5.5%.
Oxfam added that on current trends the richest 1% would own more than
50% of the world’s wealth by 2016.
Winnie Byanyima, executive director of Oxfam International and one of
the six co-chairs at this year’s WEF, said the increased concentration
of wealth seen since the deep recession of 2008-09 was dangerous and
needed to be reversed.
In an interview with the Guardian, Byanyima said: “We want to bring a
message from the people in the poorest countries in the world to the
forum of the most powerful business and political leaders.
“The message is that rising inequality is dangerous. It’s bad for growth
and it’s bad for governance. We see a concentration of wealth capturing
power and leaving ordinary people voiceless and their interests uncared
for.”
Oxfam made headlines at Davos last year with a study showing that the 85
richest people on the planet have the same wealth as the poorest 50%
<http://www.theguardian.com/business/2014/jan/20/oxfam-85-richest-people-half-of-the-world>
(3.5 billion people). The charity said this year that the comparison was
now even more stark, with just 80 people owning the same amount of
wealth as more than 3.5 billion people, down from 388 in 2010.
Byanyima said: “Do we really want to live in a world where the 1% own
more than the rest of us combined? The scale of global inequality is
quite simply staggering and despite the issues shooting up the global
agenda, the gap between the richest and the rest is widening fast.”
Separate research by the Equality Trust, which campaigns to reduce
inequality in the UK, found that the richest 100 families in Britain in
2008 had seen their combined wealth increase by at least £15bn, a period
during which average income increased by £1,233. Britain’s current
richest 100 had the same wealth as 30% of UK households, it added.
Inequality has moved up the political agenda over the past half-decade
amid concerns that the economic recovery since the global downturn of
2008-09 has been accompanied by a squeeze on living standards and an
increase in the value of assets owned by the rich, such as property and
shares.
Pope Francis and the IMF managing director Christine Lagarde have been
among those warning that rising inequality will damage the world economy
if left unchecked, while the theme of Thomas Piketty’s best-selling book
Capital
<http://bookshop.theguardian.com/capital-in-the-twenty-first-century.html>
was the drift back towards late 19th century levels of wealth concentration.
Barack Obama’s penultimate State of the Union address on Tuesday is also
expected to be dominated by the issue of income inequality.
He will propose a redistributive tax plan to extract more than $300bn
(£200bn) in extra taxes from the 1% of rich earners in order to fund
benefits specifically targeted at working families.
However, the odds of the White House having any success persuading
Congress to adopt the plan, given the Republicans’ new grip on both
chambers, are extremely long. But Obama’s embrace of what he calls
“middle-class economics” – as opposed to the trickle-down economics of
the Republicans – is likely to ensure that inequality remains a pivotal
theme of the 2016 presidential campaign.
Oxfam said the wealth of the richest 80 doubled in cash terms between
2009 and 2014, and that there was an increasing tendency for wealth to
be inherited and to be used as a lobbying tool by the rich to further
their own interests. It noted that more than a third of the 1,645
billionaires listed by Forbes inherited some or all of their riches,
while 20% have interests in the financial and insurance sectors, a group
which saw their cash wealth increase by 11% in the 12 months to March 2014.
These sectors spent $550m lobbying policymakers in Washington and
Brussels during 2013. During the 2012 US election cycle alone, the
financial sector provided $571m in campaign contributions.
Byanyima said: “I was surprised to be invited to be a co-chair at Davos
because we are a critical voice. We go there to challenge these powerful
elites. It is an act of courage to invite me.”
Oxfam said it was calling on governments to adopt a seven point plan:
• Clamp down on tax dodging by corporations and rich individuals.
• Invest in universal, free public services such as health and education.
• Share the tax burden fairly, shifting taxation from labour and
consumption towards capital and wealth.
• Introduce minimum wages and move towards a living wage for all workers.
• Introduce equal pay legislation and promote economic policies to give
women a fair deal.
• Ensure adequate safety-nets for the poorest, including a
minimum-income guarantee.
• Agree a global goal to tackle inequality.
Speaking to the Guardian, Byanyima added: “Extreme inequality is not
just an accident or a natural rule of economics. It is the result of
policies and with different policies it can be reduced. I am optimistic
that there will be change.
“A few years ago the idea that extreme poverty was harmful was on the
fringes of the economic and political debate. But having made the case
we are now seeing an emerging consensus among business leaders, economic
leaders, political leaders and even faith leaders.”
***
Trust in Institutions Drops to Level of Great Recession 2015 Edelman
Trust Barometer Finds Overly Rapid Pace of Change in Business Innovation
NEW YORK, Jan. 20, 2015** /PRNewswire/ -- The 2015 Edelman Trust
Barometer reveals an alarming evaporation of trust across all
institutions, reaching the lows of the Great Recession in 2009. Trust in
government, business, media and NGOs in the general population is below
50 percent in two-thirds of countries, including the U.S., U.K., Germany
and Japan. Informed public respondents are nearly as distrustful,
registering trust levels below 50 percent in half of the countries surveyed.
"There has been a startling decrease in trust across all institutions
driven by the unpredictable and unimaginable events of 2014," said
Richard Edelman, president and CEO, Edelman. "The spread of Ebola in
West Africa; the disappearance of Malaysian Airlines Flight 370, plus
two subsequent air disasters; the arrests of top Chinese Government
officials; the foreign exchange rate rigging by six global banks; and
numerous data breaches, most recently at Sony Pictures by a sovereign
nation, have shaken confidence."
For the first time, the Barometer looked at trust and its link to
innovation and found that trust issues are hindering acceptance of
technological advancements. A majority of respondents believe innovation
is happening too quickly (51 percent) and that it is being driven by
greed (54 percent) and business growth imperatives (66 percent), while
only some (24 percent) see it being done to make the world a better
place. More than half (55 percent) feel business is not doing enough
testing on new developments. Consumers also want stronger regulations of
business (46 percent), yet across major industries surveyed, only half
trust policy makers to develop and implement appropriate regulations.
"The pace of change has never been faster and innovation has become an
even greater imperative for business success," said Edelman. "Innovation
should be a trust accelerator, but today it is not. To invent is no
longer enough. There must be a new compact between company and
individual, where companies demonstrate that innovations are safe based
on independent research, provide both societal and personal benefit and
are committed to the protection of customer data."
The Barometer reveals a strong correlation between a country's trust
level and its willingness to accept innovation. The United Arab
Emirates, India and Indonesia, the top three countries on the trust
index, are the most accepting of innovation. Conversely, several
European nations, including Germany, France and Spain, plus Japan and
Korea, which are at the bottom of the trust index, are far less
accepting of technological developments. Overall, developing markets are
more open to innovation than developed (65 percent versus 44 percent).
Trust levels vary significantly based on the type of innovation. Trust
is higher in developments in the technology, financial services and
health industries, including electronic and mobile payments (69 percent)
and personal health trackers (59 percent). However, innovations
introduced in the energy and food sectors, such as hydraulic fracturing
(47 percent) and genetically modified foods (32 percent), are viewed
with far more skepticism. Trust in a particular industry sector does not
assure confidence in that industry's particular innovation. The food and
beverage sector (67 percent) is one of the most trusted, yet only 35
percent are confident it can develop and implement genetically modified
foods.
Respondents identified a number of actions that would increase trust in
an industry to implement innovations: making test results publicly
available for review (80 percent), partnering with credible third
parties, including academic institutions (75 percent), and running
clinical trials or beta tests (71 percent).
"Trusted innovation can only be achieved when business adopts a new
framework rooted in sharing information and fostering collaboration,"
said Ben Boyd, president of Practices, Sectors and Offerings. "While
developing innovations, business must invite open conversation and
continually listen to stakeholders."
This year signaled the end of an era of recovery of trust in business,
as trust in that institution declined in two-thirds of the markets and
is now below 50 percent in 14 countries, the worst showing since 2008.
The largest drops occurred in Canada (15 points to 47 percent), Germany
(12 points to 45 percent), Australia (11 points to 48 percent) and
Singapore (10 points to 61 percent). This is highlighted by drops in the
once impenetrable technology industry, which is still the most trusted
but saw declines in trust in most countries for the first time.
The decline in trust in the CEO as a credible spokesperson continued for
the third consecutive year, with trust levels now at 31 percent in
developed markets. Globally, CEOs (43 percent) and government officials
(38 percent) continue to be the least credible sources, lagging far
behind academic or industry experts (70 percent) and a person like
yourself (63 percent). In the developing world, CEO credibility trends
thirty points higher at 61 percent.
*Other key findings from the 2015 Edelman Trust Barometer include:*
* Government remains the least trusted institution for the fourth
consecutive year, with trust levels below 50 percent in 19 of 27
countries, including the U.S. (41 percent), U.K. (43 percent) and
Japan (40 percent).
* Media as an institution is distrusted by 60 percent of countries and
for the first time, online search engines are now a more trusted
source for general news and information (64 percent) than
traditional media (62 percent).
* Trust in NGOs declined for only the second time but remained the
most trusted institution. In 19 of 27 countries, trust in NGOs fell
or remained at equal levels to the previous year and saw dramatic
drops in the U.K. (16 points) and China (12 points).
* There is a tangible impact of trust. Nearly two-thirds (63 percent)
of respondents refuse to buy products and services from a company
they do not trust, while 58 percent will criticize them to a friend
or colleague. Conversely, 80 percent chose to buy products from
companies they trusted, with 68 percent recommending those companies
to a friend.
* A majority of respondents (81 percent) believe a company can take
specific actions that both increase profits and improve the economic
and social conditions in the community where it operates, while
three-quarters (75 percent) feel a company can be more profitable by
finding ways to solve social and community problems.
*ABOUT EDELMAN*
Edelman is the world's largest public relations firm, with more than
5,000 employees in 65 cities, as well as affiliates in more than 35
cities. Edelman was named one of Advertising Age's "A-List Agencies" in
both 2010 and 2011, and an "Agency to Watch" in 2014; Adweek's "2011 PR
Agency of the Year;" PRWeek's "2011 Large PR Agency of the Year;" and
The Holmes Report's "2013 Global Agency of the Year" and its 2012
"Digital Agency of the Year." Edelman has been awarded seven Cannes
Lions including the Grand Prix for PR in 2014. Edelman was named one of
the "Best Places to Work" by Advertising Age in 2010 and 2012 and among
Glassdoor's "Best Places to Work" in 2011, 2013 and 2014. Edelman owns
specialty firms Edelman Berland (research), Edelman Deportivo
(creative), Blue (advertising), BioScience Communications (medical
communications) and agency Edelman Significa (Brazil). Visit
http://www.edelman.com <http://www.edelman.com/> for more information.
*ABOUT THE EDELMAN TRUST BAROMETER *
The 2015 Edelman Trust Barometer is the firm's 15th annual trust and
credibility survey. The survey was powered by research firm Edelman
Berland and consisted of 20-minute online interviews conducted on
October 13th – November 24th, 2014. The 2015 Edelman Trust Barometer
online survey sampled 27,000 general population respondents with an
oversample of 6,000 informed publics ages 25-64 across 27 markets. All
informed publics met the following criteria: college-educated; household
income in the top quartile for their age in their country; read or watch
business/news media at least several times a week; follow public policy
issues in the news at least several times a week. For more information,
visit www.edelman.com/trust2015 <http://www.edelman.com/trust2015>
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