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Fair distribution of wealth

Closing the gap

The uneven distribution of wealth and prosperity worldwide is a well-known phenomenon, but for many years the research that was done on it failed to come up with any specific findings. In 2007, however, a study done by the World Institute for Development Economics Research (WIDER), the United Nations' "university", was the first to bring to light detailed facts on this unequal distribution. It found that almost 90 per cent of the world's household wealth is held in North America, Europe, Japan and Australia.

Household wealth: a large part of the world population at the back of the queue

The rest of the world, in which 70 to 80 per cent of the world's population live, makes do with the remaining ten per cent or less of "world wealth". We are a long way from anything approaching a fair distribution of private incomes and household wealth.

Figures provided by the International Labour Organisation (ILO) show that it is the pay structure in many developing and emerging countries that is mainly responsible for this inequality. About half of the 2.8 billion workers in the world have to manage on less than two US dollars a day, which means they are condemned to a life of poverty. They have too little to feed themselves and their families.

Decent work as a way out of poverty

The Decent Work Agenda is one of the ILO's efforts to bring about change. Its goals include the creation of more and better jobs worldwide that are rewarded with a fair wage. The ILO Director-General, Juan Somavia, stated that the main cause of poverty was low productivity, and not merely a lack of work.

However, decent work also means shaping growth in developing and emerging countries in a well-balanced way; Mr. Somavia believes that if productivity growth is not matched by the creation of decent jobs, then workers will never be able to find their way out of poverty.

Workers not on the winning side

The fair distribution of wealth and added value are of relevance not only in the context of international comparisons. Fair distribution of wealth tends to be on the wane within national economies all over the world, in industrial countries too.

It is the workers who are mainly affected by this uneven distribution; it is becoming rarer for them to be on the "winning side" of globalisation. Since the mid-1970s, wages and salaries in most industrial countries have accounted for an ever dwindling share of national income, as is proved by OECD figures. And the proportion of company profits and capital gains yields has risen correspondingly.

Attempts to achieve a fairer distribution of wealth

There are already a number of projects worldwide that are working not only towards decent work but also towards a fairer distribution of wealth and prosperity. These include the ILO Decent Work Agenda, sustainability strategies, and taxation ideas such as the Tobin tax.

In this connection, the trade unions of the G8 countries issued a declaration on the occasion of the 2007 G8 Summit in Heiligendamm entitled "Towards Fair Globalisation", in which they also took up the cause of a more equitable distribution of wealth throughout the world. They put forward the idea of networked governance, stating that in order "to achieve a more just and sustainable global economy", governments must also "exercise more active governance". They said there ought to be links between the various elements of economic, financial, trade and development policy, so that workers' wages and salaries rose too, in line with increasing productivity. This equitable distribution would lead to fair globalisation in the world of work too, in industrial as well as in developing and emerging countries.

The Tobin tax and other similar international tax concepts also aim for the creation of a fair global economy. They all share the fundamental idea of a standardised tax to be levied on all trade of currency across borders throughout the world, which would lead to a better adjustment of international financial markets.

The globalisation critics in the Attac network have lent their strong support to this idea in the past. The aim of such taxes is to make international currency exchange transactions less lucrative, leading to a reduction in excess liquidity on the currency markets. This financial capital could also be used to achieve a more equitable distribution of wealth. This too is part of the Attac concept, as it would also create a large source of international revenue that could be used for development programmes.

The gap between an idea of this kind and its realisation is not as great as one might think. France and Belgium, for instance, have already decided to introduce a Tobin tax, providing all other EU Member States do the same. In Germany too, a federal parliamentary committee of enquiry "Globalisation of the World Economy -- Challenges and Solutions" was established as early as 2002 which decided it was principally in favour of tax concepts of this kind. The more people there are in their respective country, who campaign for a fairer distribution of wealth and demand that politicians take the necessary steps, the closer we shall be to the goal of decent work and a fair distribution of wealth.