Bill Gates is worried – too many people are talking about raising the minimum wage. Appropriately, the world’s richest man spoke on the eve of the World Economic Summit in Davos. Gates is a great symbol of the Davos summit, an annual away day for global capitalism, at which the world’s 1% mouth concerns about poverty and climate change, while working on policies which fuel inequality.
Despite a fair bit of evidence that a reasonable minimum wage doesn’t cost jobs, Gates is picking up on a regular Davos theme. In 2012, Tidjane Thiam, chief executive of Prudential, called the minimum wage a ‘machine to destroy jobs’.
Last year Gates increased his wealth by $15.8bn and has now once again become the world’s richest man, worth about $78.5bn. He’s not alone – as a whole the world’s millionaires got 11% richer last year. For the rest of us, the decades-long trend of stagnating income continues. In some countries – Greece, Spain and Britain – median household income fell sharply.
The policies dreamt up by those who meet in Davos are a direct cause of these historically unprecedented rates of inequality. Last week, even the financial press was taken aback at the concentration of corporate wealth. Just six companies – including Apple, Microsoft and Google–are sitting on more than a quarter of the $1.5tn reserves held by US non-financial corporations.
Amongst other reasons, a big factor is tax avoidance, enabled by the financial liberalisation regime put into place over 30 years by the likes of those who attend Davos. According to the Financial Times: ‘some 94 per cent of Microsoft’s $81bn is now outside the US.’
So Gates doesn’t want a higher minimum wage denting the amount of wealth his company is able to avoid taxes on.
The really incredible thing about the Davos set is the way they are able, without irony, to expound all the good they are doing in the world. We barely question the illegitimacy of the enormous power that these corporate leaders hold over the world.
This week Gates is portrayed as a dreamy idealist, explaining to Davos seminars how ‘there will be almost no poor countries left in 20 years time’. Presumably this will happen with a lot of charity, but without minimum wages. Certainly Gates’ money will have significantly shaped the form which that ‘development’ will take, not least through the Bill and Melinda Gates Foundation. Forget democratic national projects, the world’s richest many will decide what sort of food you will eat and which corporation will supply your medical needs.
In an article in the Observer at the weekend, the head of the World Economic Forum, Robert Greenhill, said that mental and physical health were a priority of this year’s summit. Good business depends on good mental and physical health.
Yet some of the participants at Davos are directly responsible for the crisis and austerity measures which have been responsible for mental health problems spiral across Europe. In Greece, suicides rose 37% from 2009 to 2011. The Red Cross published a shocking report on Europe, characterising the continent as one of mass unemployment, suicides, social exclusion, deep poverty, crime, racism and collective despair. We should remember that none of this was an accident.
Charities like Oxfam which talked about inequality did some essential work to frame the global context in which Davos takes place. But we need to do more than put these issues on their agenda. The corporate elite represented at Davos cannot be allowed to meet in luxury and pretend they have the answers to the world’s problems. They are the world’s problems. Gates has helped us unmask the true interests of the corporate elite.
Acid Corbynism allows people to imagine a future beyond the paltry offerings of capitalism, writes Keir Milburn
Guy Shrubsole gives some tips for finding out
It’s no use apportioning blame, we need meaningful critical reflection. The old formulae are no longer sufficient, writes Paul O'Connell
Jenny Nelson reviews Luyendiks analysis of the City – the ‘time bomb at the heart of our society’.
Naomi Klein tells Mat Little how she put into words what so many were feeling – and why it’s time the new movement showed a public face and built coalitions with others on the left (published in issue 79, January 2001)
Leo Panitch speaks to Peter Newell and Sam Knafo about his book The Making of Global Capitalism – and what it means for strategy and action aimed at ‘un-making’ capitalism