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Nonprofit warns few control wealth, signaling a new ‘Gilded Age’

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A recent report from Oxfam, a British nonprofit dedicated to combating poverty, has revealed significant disparities in profit distribution among U.S. corporations. The analysis of more than 200 companies shows that a substantial portion of net profits, approximately 90% or $1.1 trillion of the total $1.25 trillion, is directed towards wealthy shareholders. This trend indicates that shareholders and executives are benefiting significantly, with CEO compensation having risen by 31% between 2018 and 2022 following the COVID-19 pandemic, reaching record levels.

Irit Tamir, the senior director of Oxfam America’s private sector department, commented on the influence of corporate lobbying on tax reductions, suggesting that companies play a role in creating these favorable conditions for the wealthy.

The past year has also seen notable layoffs in the finance, technology, and media sectors despite continued financial success for many corporations. For instance, Fortune 500 companies have experienced growth in revenue and profits since 2014, with a marked increase post-pandemic. Despite announcing layoffs as part of a “year of efficiency,” Meta also announced significant stock buybacks, exemplifying a trend where stock buybacks reached $681 billion in 2022, according to Oxfam.

The dominance of power by top companies has been a long-standing development, gaining momentum from the 1970s. The concept of shareholder primacy became predominant, and stock buybacks, previously banned as a form of market manipulation, became legal in the 1980s. Corporate tax rates also fell during this period, influenced by tax cuts during the Reagan and Trump administrations, and the 2010 Citizens United decision allowed for unrestricted political spending by corporations and wealthy individuals.

Tamir asserts that companies have grown larger and corporate power has increased, benefiting a small group while leaving workers behind. However, there are emerging signs of change, as unionization gains popularity following successful strikes and negotiations by groups like the United Auto Workers and the Starbucks union.

Despite these developments, wages for workers have remained largely stagnant and insufficient compared to inflation, while executives received substantial pay increases. Only a small percentage of companies support a living wage, highlighting a widening wage gap, especially in larger companies like McDonald’s and Coca-Cola, known for their significant CEO-to-worker pay disparities.

The retail sector particularly reflects this inequality, with many workers being people of color and women, while leadership positions are predominantly held by white men. Although companies express intentions to meet diversity, equity, and inclusion targets, their actions often lack transparency.

Tamir emphasizes that even the wealthiest individuals may face negative consequences in the long term if these disparities persist. Companies like Dollar Tree, identified by Oxfam as the least equitable from a gender and racial perspective, have already had to close numerous stores. Tamir argues that concentrating wealth among a small group harms the broader economy.

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