INEQUALITY: the business role
As of 2016, the top 1% of the world’s population now owns more than everyone else put together. In the United States, the top 1% secured over half of all income growth since the 2008-2009 financial crisis.
As the Center for Economic and Social Rights notes, extreme inequality represents both a cause and result of human rights violations: not only do human rights violations drive inequality, erode labour rights, increase discrimination, and raise barriers to political participation, but unequal societies are also more likely to pose challenges to broad-based protection of human rights.
The link between business practices and rising inequality can be seen in corporate tax avoidance and evasion and prioritisation of shareholder interests that results in skewing income and wealth distribution, away from workers and benefiting shareholders, who include the world’s wealthiest individuals and largest corporations (“vertical inequality”). “Knowledge-intensive” economies can exacerbate levels of inequality, as manufacturing jobs decline and labour markets see increased division between higher-pay, higher-skilled jobs and lower-paying, lower-skill service employment.
And while the world has moved closer to gender equality over recent decades, women remain at significant disadvantage to men across a range of social, economic and political indicators (“horizontal inequality”). For example, laws and policies around the world prohibit women from equal access to land, property, and housing. Equally troubling, economic and social discrimination results in fewer and poorer life choices for women, rendering them more vulnerable, including to trafficking.
Some countries have shown that the right policies can encourage competitive and creative economies while fostering greater equality. But the challenge is real – how to make growth more inclusive, business more responsible, and distribution of resources more equitable. Put another way, how to ensure a more even distribution of wealth and access to resources across social groupings, whether by gender, or race, religion, ethnicity or otherwise, as well as between the richest and poorest.
The year ahead will see greater attention to how business can work with governments and other actors to play a more active role in combating inequality and promoting respect for fundamental rights. Business support for a living wage is one important step, as are strategies which employ local community members, improve education and entrepreneurial skills training, including dedicated initiatives to empower women, and expand apprenticeship opportunities.