In a new report, Oxfam once again highlights the growing inequality in our country. The NGO has found that for every 100 euros in profit that the largest companies in Belgium make, only 27 euros flow back to their shareholders, while the average expenditure per employee increased by a smaller amount than the dividend. This raises concerns about the fair distribution of wealth and calls on the government to take action.
Oxfam has released “The Inequality Dividend” as part of its ongoing efforts to combat inequality and promote a fair economy. The report reveals how companies’ profit margins have increased significantly in recent years, with profits fueling inflation while wages have not kept up. According to Oxfam, business margins contributed twice as much to inflation in 2021 as wage increases, and this trend continued into 2022.
One of the key findings is that no storage is possible due to high company profits, which Oxfam labels as “absurd.” Despite an increase of 45.5% in value created by employees in large companies active in Belgium from 2017 to 2022, expenditure per employee only increased by 13%, while dividends increased by 23%. This shows that profit maximization comes at the expense of wages and fair prices.
Furthermore, Oxfam highlights how wealth generated by companies is not distributed fairly. On average, 73% of profits are paid out in dividends to shareholders, with some companies even paying out more dividends than they made in profit over the past six years. Additionally, someone earning minimum wage would need to work for over a century to earn the average annual wage of a Bel20 business leader. The tax system also contributes to inequality as wages are taxed but added value on share sales is not.
To address these issues, Oxfam has made several recommendations including more action against monopolies and revising the wage standard law. They also suggest regulating directors’ remuneration based on sustainability objectives and consistent taxation of capital gains and dividends with a minimum tax rate of 25% for multinationals.
Overall, Oxfam’s report sheds light on the ongoing problem of income inequality and highlights the need for government action to promote a fairer distribution of wealth.
