Public procurement should be used to help tackle growing global economic inequality, Oxfam says.
According to the charity's study, the gap between the world’s richest and poorest people is widening, with inequality at “extreme levels”.
It concluded to help combat this, governments and international institutions should agree to tie public procurement contracts to those companies with a ratio of highest to median pay of less than 20:1.
The recommendation is part of a raft of changes called for to close the pay gap and curb rocketing executive rewards. The study says just 85 people own as much wealth as the poorest half of humanity. Last year, seven out of 10 people lived in countries where economic inequality was worse than 30 years ago.
In Even it Up: Time to end extreme inequality Oxfam said extreme inequality corrupts politics, hinders economic growth, exacerbates gender inequality, and causes a range of health and social problems. It added extreme wealth is not just found in rich countries. The world’s richest man is in Mexico and there are 16 billionaires in sub-Saharan Africa, alongside 358 million people living in extreme poverty.
Endorsing the report, Kofi Annan, chairman of the Africa Progress Panel and former secretary-general of the United Nations said: “The widening gap between rich and poor is at a tipping point. It can either take deeper root, jeopardising our efforts to reduce poverty, or we can make concrete changes now to reverse it.”
The report includes a call to action from Oxfam to build a fairer economic and political system:
• Make governments work for citizens and tackle extreme inequality
• Promote women’s economic equality and women’s rights
• Pay workers a living wage and close the gap with skyrocketing executive reward
• Share the tax burden fairly to level the playing field
• Close international tax loopholes and fill holes in tax governance
• Achieve universal free public services by 2020
• Change the global system for research and development and pricing of medicines so everyone has access to appropriate and affordable medicines
• Implement a universal social protection floor
• Target development finance at reducing inequality and poverty, and strengthening the compact between citizens and their government