The billionaire Warren Buffet famously said once, ‘There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.’  New analysis released by Oxfam this week for International Workers’ Day shows concretely that since 2020, the rich class, as Buffet calls them, are winning big.

Global dividend payments to rich shareholders grew on average fourteen times faster than worker pay in thirty-one countries, which together account for 81 percent of global GDP, between 2020 and 2023. Global corporate dividends are on course to beat an all-time high of $1.66 trillion reached last year. Payouts to rich shareholders jumped by 45 percent in real terms between 2020 and 2023, while workers’ wages rose by just three percent. The richest one percent, simply by owning stock, pocketed on average $9,000 in dividends in 2023 — it would take the average worker eight months to earn this much in wages.

This matters because as long as returns to capital increase faster than returns to work, the inequality crisis will grow.  At the heart of our economy is a constant struggle between the owners — or capital, as it is known in economics — and the workers, or labour. The measure of progress, or the lack of it, is the extent to which the benefits of all those billions of hours of labour worked each day are accruing to workers and their families, driving greater equality, or the extent to which benefits are accruing to the owners of capital, driving greater inequality.

For the majority of people on our planet, the years since 2020 have been incredibly hard. The pandemic was a huge blow; the millions lost to the disease, and the millions more thrown into destitution as the world ground to a halt. The sharp increase in the cost of food and other essentials that followed in 2021 has become a grinding new reality for many families across the world as they try to buy oil, bread, or flour without knowing how many meals they will have to skip that day. I think of friends in Malawi, for example, where I used to live, who are struggling each day to stay afloat; or the millions here in the UK who rely on food banks just to stave off hunger. Globally, poverty is still higher than it was in 2019. Inequality between the rich world and the Global South is growing for the first time in three decades.

But for the richest in our society, the owners of capital, the years since 2020 have really been good. Billionaires, of whom there are about 3000 worldwide, are some of the biggest shareholders. Seven out of ten of the world’s largest corporations have a billionaire CEO or a billionaire as their principal shareholder. Over the last decade, billionaire wealth increased by around seven percent annually. Since 2020, it has accelerated to 11.5 percent a year.

The term ‘shareholders’ has a democratic ring to it, but this is patently false. In fact, it is the richest people in the world who own the largest proportion of shares, and indeed all financial assets. Research on twenty-four OECD countries found that the richest 10 percent of households own 85 percent of total capital-ownership assets — including shares in companies, mutual funds and other businesses — while the bottom 40 percent own just four percent. In the USA, the richest one percent own 44.6 percent, while the poorest 50 percent own just one percent. 

The rich are not only rich, they are predominantly men, and they are predominantly white. In the USA, 89 percent of shares are owned by white people, 1.1 percent by Black people and 0.5 percent by Hispanic people. Similarly, globally, only one in three businesses are owned by women. So those bumper returns to shareholders are basically boosting incomes and wealth at the top.

How can we fix this? Taxing the super-rich much more would be a great start; the news here is good, because Brazil, which is chairing the G20 group of the world’s most powerful economies this year, has put the need to increase taxes on the formal agenda for the first time. At the same time, President Biden has once again said he supports a new billionaire tax.

But ultimately, tax is about fixing a problem after it becomes one. The key thing is ensuring the economy does not create such huge inequality in the first place. One critically important way to do this is to tip the scales back in favour of workers. The fruits of labour should be enjoyed by workers, not by those who, as John Stuart Mill said, ‘grow rich in their sleep without working, risking or economising’. This will only happen with an increase in worker organisation and workers’ power. When workers’ power has been high, inequality has been low, and as the International Monetary Fund has pointed out, declining membership of unions has directly contributed to increases in incomes at the top.

Given this, the resurgence in strikes and increase in the power and voice of workers we have seen in recent years is amazing. It is still a fraction of what is needed to tip those scales, but a whole new generation of workers are seeing the power of organising. Gen Z’s support for unions is the highest of any living generation. From the autoworkers in the USA to the garment workers in Bangladesh, we see workers fighting back against owners, and fighting for a fairer, more equal world.

Workers worldwide need to grab the scales and pull them back towards them; this will in turn create the politics and the economics of a new age of equality.