What would it cost to eliminate poverty and ensure that each person on the planet enjoyed a ‘living wage’; enough income to meet their basic needs for a descent and good life?
First, the world’s leaders, along with the world’s billionaires, would have to issue a joint declaration of well-being, that all people on the planet are deserving of a sufficient ‘living wage’ that would meet their basic needs for a good life.
What is a living wage? A living wage is the income required to meet the basic needs for a reasonable good life of clean water, good air, good food, comfortable shelter, clothing and some healthy degree of autonomy.
The Catholic 13th century theologian Thomas Aquinas (building on the ideas of Aristotle) said what is required of a good life is sufficiency of material needs (and hence sufficiency of income to finance those needs) and virtuous action).
Based on Plato and Aquinas, the key virtues to act upon are moderation, courage, justice and wisdom.
Reality Check: The Facts
The current estimated global poverty line is $1.45 per day or $530/yr.
$2.50/day ($912/yr) is the estimated poverty level in developing countries. In 2005, acccording to poverty facts currently roughly 50% of the world’s people (over 3.2 billion) live on $2.50/day while 80% (5.15 billion) live on $10/day or less.The $10 dollar a day (US $3,650/yr) figure above is close to poverty levels in the US.
The poorest 40 percent of the world’s population accounts for 5 percent of global income. The richest 20 percent accounts for three-quarters of world income.
In 2005, the wealthiest 20% of the world accounted for 76.6% of total private consumption. The poorest fifth just 1.5%.
The poorest 10% accounted for just 0.5% of all consumption while the wealthiest 10% accounted for 59% of all the consumption.
About 0.13% of the world’s population controlled 25% of the world’s financial assets in 2004. The total wealth of the top 8.3 million people around the world “rose 8.2 percent to $30.8 trillion in 2004, giving them control of nearly a quarter of the world’s financial assets.”
A conservative estimate for 2010 is that at least a third of all private financial wealth, and nearly half of all offshore wealth, is now owned by world’s richest 91,000 people – just 0.001% of the world’s population.
The next 51 percent of all wealth is owned by the next 8.4 million — just 0.14% of the world’s population. Almost all of this financial wealth has managed to avoid all income and estate taxes, either by the countries where it has been invested and or where it comes from.
The world’s gross domestic product in 2006 was $48.2 trillion in 2006.
- The world’s wealthiest countries (approximately 1 billion people) accounted for $36.6 trillion dollars (76%).
- In 2013, the world’s billionaires — just 1,426 people (approximately 0.0002% of the world’s population) — had an estimated financial worth of $5.4 trillion (over 7% of world GDP).
- Low income countries (2.4 billion people) accounted for just $1.6 trillion of GDP (3.3%)
- Middle income countries (3 billion people) made up the rest of GDP at just over $10 trillion (20.7%).
How much would this cost to eliminate poverty around the world (with 7.074 billion people and assuming the same distribution of poverty)?
To double the raise the income of roughly 5.64 billion (80% of the world’s population who live on less than $10/day) to $10.00/day would cost $29.4 billion/day or $10.7 trillion per annum. (I have not included people in the developed countries who may not be earning $10/day).
A $10.7 trillion boost in disposable income to the 5.6 billion poor would be the equivalent of 13.7% of World GDP ($78.8 trillion in 2015, in nominal terms).
Compare this figure with the estimated net worth of the world’s 1,426 billionaires at $5.4 trillion, according to Forbes latest wealth estimates.
Imagine a campaign to Bill Gates and the rest of the super wealthy to give 1.0% of their wealth in the form of a ‘wellbeing dividend’ to the 5.6 billion living without a living wage?
Moreover, raising the wages of the poorest amongst us will actually benefit economies, as a whole providing greater purchasing power to the poor to enjoy a better life.