Labor Day: since 2020 dividends for shareholders have grown 14 times faster than wages, a fifth of workers have a salary below the poverty line

ROMA – On Labor Day, the data circulating does not help us hope for the possibility of being able to coexist with other forms of capitalism, less rapacious and unequal. Between 2020 and 2023, dividends distributed to shareholders by the 1,200 largest capitalization companies in the world grew, in real terms, 14 times faster than the average wage of workers in 31 countries, which together represent 81% of global GDP. In the same period, the dividends of the Italian majors grew by 86% in real terms, while real wages recorded a drop of almost 13%.

OXFAM’s analysis. This is revealed by a new analysis by Oxfamreleased on the occasion of International Workers’ Day on May 1st, on the basis of Janus Henderson Global Dividend Index which examines the performance, on an annual basis, of 90% of global dividends. The overall monitored “coupon sum” is projected to reach 1,720 billion dollars in 2024, exceeding the record figure of 1,660 billion dollars in 2023.

Oxfam research. It found that in 31 countries, between 2020 and 2023, dividends, adjusted for inflation, increased by 45% (+$195 billion), while wages grew on average by just over 3%;

1) – excluding China, which represents the largest share of global wage growth, on average real wages in the countries analyzed fell by 3% in the same four-year period;

2) – due to the marked concentration of capital income in many countries, the trend of increasing dividends has worrying effects on the levels of internal income inequality, as recently confirmed by the International Labor Organization (ILO);

3) – examining the data of Wealth-X, it is estimated that the richest 1% of the planet today holds 43% of all global financial assets; Those in this group earned an average of $9,000 in dividends in 2023. An amount equivalent to eight months’ wages for the average worker in the 31 countries surveyed.

Shareholder earnings skyrocketed. “The profits of the largest corporations and the earnings of wealthy shareholders have skyrocketed, while wages continue to stagnate. – said Misha Maslennikov, policy advisor on economic justice at Oxfam Italia – This means that millions of workers are unable to escape the vicious circle of poverty and ensure a dignified level of existence for themselves and their families. A clear injustice, symptomatic of an economic system that rewards wealth more than work.”

The snapshot of working poverty on a global scale. The data confirm the alarm launched by the International Labor Organization on the growing spread of working poverty on a global scale. Using data from‘OIL, Oxfam found that:

1) – almost 1 in 5 workers globally earns a wage below the poverty line of $3.65 per day (at purchasing power parity, PPP);

2) – the wages of 66% of workers in low-income countries do not exceed this threshold;

3)– Afghanistan (22%) and Sri Lanka (9%) have the highest levels of in-work poverty above the $6.85 per day (PPP) threshold.

Unequal distribution of earnings, thanks to governments. “No company should be able to distribute generous dividends to its shareholders if it has not first paid decent wages to its workers. – adds Maslennikov – Governments should introduce reward measures, in the tax field or in tenders, for companies that distribute value more equitably among production factors and pay decent wages to their workers. Governments should also help strengthen the bargaining power of the most vulnerable and least protected workers through the introduction of decent minimum wages.”

What happens in Italy. Between 2020 and 2023 the dividends of the Italian majors will increase by 86%, and the salaries in the private sector will be -13%. In 2023, dividends distributed by the largest Italian companies listed on the stock exchange, monitored by Janus Henderson, reached a record figure of 20.1 billion dollars (18.5 billion euros), with an increase of 17.9% on an annual basis .

Record dividends in the banking sector. Three-quarters of the increase was attributable to dividends distributed by banking sector operators and none of the companies examined reduced their coupons on an annual basis. Between 2020 and 2023 the dividends of the Italian majors increased by 86% in real terms, while in the same period the paychecks of private sector employees contracted, by almost 13%, taking inflation into account.

Nominal wages and real wages. Considering a broader time window, in Italy nominal wages grew between 1991 and 2022 by 107.5%, but wage levels in real terms remained almost unchanged, showing growth of just 1%. A setback which in 2022 placed Italy in 22nd position among OECD countries for the level of real average annual wages, marking a drop of 13 ranking positions compared to 1992.

Persistent wage moderation. “Continuing wage moderation is a macroscopic problem of the Italian labor market. Other structural problems concern the employment delays compared to other advanced economies, the low quality of work of young people and women, the widespread use of atypical forms of work which determines marked salary inequalities and expands the ranks of the poor who have a job and therefore an income ( the so-called working poor) – adds Maslennikov – Unfortunately the Government does not seem at all willing to address the many unresolved issues”.

Everything left to the economic and fiscal convenience of companies. “With its mantra of ‘the more you hire, the less you pay’ – concludes Maslennikov – it does not give industrial policies the priority role for the development of good employment, but leaves it to the economic and fiscal convenience of companies. The choice to further liberalize contracts fixed-term and casual work also risks reinforcing the traps of precariousness. The heated opposition to the legal minimum wage also denotes a lack of interest in protecting less protected workers.”