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Today's Top News
Elites Acknowledge: 'Disparities Between Rich and Poor' a Global Threat
Ahead of World Economic Forum, researchers warn about growing divide between have and have-nots
Even from their perch atop global capitalism's peak, many of the world's most influential people see the disparities in global wealth as a serious threat to their conception of continued prosperity and the stable cohesion of society.
According to the '2014 Global Risks' report released by the World Economic Forum on Thursday, the vast, growing and "chronic" income divide between the rich and the poor across the world is currently the greatest threat to global stability.
Though the WEF is broadly seen as the collective voice of the people and institutions who have most benefited from the coercive nature of global capitalism, the findings of the report are in some ways most striking exactly because of the source.
"The chronic gap between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade," the WEF report states.
Joining the group's list of conditions that are "most likely" to cause global instability across the world in the coming decade are extreme weather events, unemployment, fiscal crises, and cyber attacks.
Having surveyed over 700 experts from industry, government, academia and civil society, the authors of the report state:
Recent examples illustrate the reality of [key economic] interconnections – the failure of financial institutions brought about a financial crisis that resulted in liquidity crises affecting multiple national economies. This in turn led to higher levels of unemployment, widened income disparity and associated political and social tensions and protests, notably in some European countries and large emerging markets.
Income gaps are coming in at all-time highs around the globe. According to a recent study, the U.S. income disparity between the wealthiest 1% (families with incomes above $394,000 in 2012) and everyone else is the widest it's been since 1927, and the top 10% of earners took in "a level higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the 'roaring' 1920s."
Between 2009 and 2012, the incomes of the top 1% of earners grew by more than 31%, while the incomes of the bottom 99% grew by just 0.4%.
"The message from the Arab spring, and from countries such as Brazil and South Africa is that people are not going to stand for it any more," said Jennifer Blanke, the WEF's chief economist.
That call has grown ever louder over the past year. In the U.S., for example, protests over wages and working conditions proliferated across the country including workers from large corporate retail giants such as Walmart and fast food chains, including McDonald’s, Burger King, Wendy’s, and others.
The movement has garnered national attention, even among some policy makers in Washington.
The report should act as a wake-up call to the influencers and leaders at Davos next week. These are global issues we can do something about: we can twist the global economy back into shape – this includes a new commitment to create jobs, address income inequality and falling living standards. Since the global financial crisis it's been a race to the bottom in jobs, wages and living standards.
Well known as a gathering for some of the world's wealthiest and powerful individuals—including corporate, media, and political elites—the World Economic Forum's official gathering in Davos, Switzerland begins next Wednesday, January 22.