Insights from the Oxfam Report for South Africans

Dr Gilad Isaacs, a researcher at Wits says the Oxfam report highlights that wealth accumulated isn't based on people's efforts but on cronyism, etc. Picture: Noni Mokati

EVERY time he speaks about the National Minimum Wage, South African deputy president and ANC president Cyril Ramaphosa, takes great care to stress that “this is not a living wage”.

He is right, of course.

Take-home pay of R3 500 a month for a 40-hour week does not come close to a living wage, but Ramaphosa, like many others, sees it as a start, a first step to pull millions of South Africans out of extreme poverty and, eventually, inequality.

And yet, dire though conditions may be for the poverty-stricken in this country, we are not alone. Nor are we the worst. But this should offer scant satisfaction to those who say they support equality (but who had done little to go beyond words).

On Monday, Oxfam, an international confederation of 20 organisations, working with local communities in more than 90 countries, released its annual report on inequality.

As usual, the release of the report was timed to coincide with the gathering of the super-rich and super-powerful – both corporations and countries – to talk shop and to consider pleas for investment from developing countries and, quite frankly, an assortment of basket-case economies.

It’s intriguing – and sad – how attitudes in the world have changed in less than 200 years….In the 1800s, there was a scramble in Europe and America for slaves from Africa, and spices and raw materials from Asia.

In our second millennium, in our age of globalisation, many countries in Asia, especially, offer their own citizens in their own countries. as virtual slave labourers for big Western corporations – to work in sweatshops, producing big-name brands of shoes and other fashion labels. As usual, the information contained in the Oxfam report will horrify human rights supporters and activists.

Pages and pages in the document have outlined a depressing series of stories revolving around the scramble by the rich to maximise profits by squeezing the wages of the poor.

The horror story started right at the beginning of its executive summary…

“In 2016,” Oxfam pointed out, “annual share dividends from the parent company of fashion chain Zara to the world’s fourth-richest man, Amancio Ortega, were worth approximately €1.3bn.”

And then it added: “Stefan Persson, whose father founded H&M, is ranked 43 in the Forbes list of the richest people in the world, and received €658m in share dividends last year”. This will be of interest to many South Africans, including those who were moved to protest violently against the company’s recent racist hoody advertisement.

A key among H&M’s profit drivers is the production of clothes in the sweatshops of poor Asian countries such as Bangladesh.

The report also spoke about a clothing worker named Anju, who it said sewed clothes in Bangladesh for export. “She often works 12 hours a day, until late at night. She often has to skip meals because she has not earned enough money. She earns just over $900 dollars a year.” Oxfam said 2017 had seen the biggest increase in the number of billionaires in history, with one person acquiring billionaire status every two days.

Of the now 2 043 dollar billionaires worldwide, nine out of 10 are men,” Oxfam reported. In addition to this, existing billionaires became even richer. This increase was enough to end extreme poverty seven times over, Oxfam said, adding that “82% of all of the growth in global wealth in the last year went to the top 1%, whereas the bottom 50% saw no increase at all”. 

“Living wages and decent work for the world’s workers are fundamental to ending today’s inequality crisis. All over the world, our economy of the 1% is built on the backs of low paid workers, often women, who are paid poverty wages and denied basic rights.

“It is being built on the backs of workers like Fatima in Bangladesh, who works sewing clothes for export. She is regularly abused if she fails to meet targets and gets sick because she is unable to go to the toilet.”

Abuse does not only occur in poor countries….

Oxfam wrote about its efforts to improve the “appalling working conditions” of poultry workers in the US. “Workers are unable to take sufficient toilet breaks, meaning they must wear nappies to work,” it said. And it quoted the experiences of a woman named Dolores, a former poultry worker in Arkansas, where Bill Clinton was once governor.

“It was like having no worth,” Dolores told researchers. “We would arrive at 5 in the morning…until 11 or 12 without using the bathroom… I was ashamed to tell them that I had to change my Pampers”. 

“The work is also dangerous,” the report said, “with one of the highest injury rates of any sector. Repetitive strain injuries can be so severe that after only one year working on the production lines, workers have been unable to straighten their fingers, hold a spoon or even properly hold their children’s hands.”

Oxfam noted that four years had passed since the World Economic Forum warned that rising economic inequality had become a major threat to social stability, and three years since the World Bank had combined its goal for ending poverty with the need for shared prosperity.

“Since then, and despite world leaders signing up to a global goal to reduce inequality, the gap between the rich and the rest has widened. This cannot continue,” it said.

“As President Obama told the UN General Assembly in his departing speech in September 2016, a world where 1% of humanity controls as much wealth as the bottom 99% will never be stable.‟

The comparisons in the earnings of those at the top and those at the bottom, beggar belief. And yet, very little has changed over the past few years. Although names may sometimes change, the figures and percentages, continue to read like a horror story.

News that the world’s richest 1% are wealthier than the rest of the world – or that eight men own the same amount of wealth as the poorest half of the globe – should scare governments everywhere. When the murmurings of the poor that – in the words of Bob Marley – ‘dem bellies full, but we hungry”, start rising in volume, the world will become like a simmering volcano, just waiting to erupt.

Back to the US: research by economist Thomas Piketty highlights the fact that over the past 30 years, income of the country’s bottom 50% has not grown at all, while the top 1% has seen an income growth of 300%

Oxfam warned that inequality could pull societies apart if nothing was done to check its growth. “It increases crime and insecurity, and undermines the fight to end poverty.” It leaves more people living in fear and fewer in hope.

South Africa is, of course, well aware of the dangers that the Oxfam report warns about. The signs have been there for a long time. In fact, the Gini coefficient, the measure of the inequality of income is, at 6.6 to 6.9, confirmation that South Africa is one of the most consistently unequal societies in the world. A Gini coefficient of 0 means total income equality – where everyone has the same income. A Gini coefficient of 1 means maximum inequality. One person has it all.

A rating of 0.4 is considered the international alert line for high inequality. Since the ANC’s elective conference in December, there has been a rise in optimism in the country that a lacklustre economy will, at last begin to show signs of recovery.

But Cyril Ramaphosa, the recently elected ANC president will know that a tough road lies ahead to convert good intentions into action. For, despite the bullish confidence that the end of the corrupt Zuma presidency is imminent and that his departure would usher in a new era of business confidence  and investment in South Africa, the insatiable search across the world for profits (and for that read “cheap labour”) by international corporations, emphasises the size of the task ahead.

South African trade unions have come in for a lot of flak from, particularly, the opposition DA for their stance against slave wages and poor working conditions.

The unions have an important duty to protect the interests of workers. It is important that the South African delegation at Davos remembers this – and stresses this to the corporations and countries from which they are seeking investment.

Dougie Oakes is the Op-ed and features editor of Independent Media.