Every 30 hours, a new billionaire was created during the pandemic; the same rate at which a million people could fall into extreme poverty this year, a new Oxfam brief today reveals.
Profiting from Pain is published as the World Economic Forum — the exclusive get-together of the global elite in Davos, Switzerland — takes place face-to-face for the first time since the onset of the pandemic.
Oxfam Australia Chief Executive Lyn Morgain said this period had seen the billionaires converging on Davos enjoy a huge boost to their fortunes.
“The pandemic and now the steep increases in food and energy prices have, simply put, been a bonanza for these billionaires. Meanwhile, decades of progress on extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive.”
The briefing shows that 573 people became billionaires during the pandemic, at the rate of one every 30 hours, with five new billionaires minted in Australia in a single year. At the same time, Oxfam expects that this year, 263 million more people will crash into extreme poverty, at a rate of a million people every 33 hours.
Billionaires’ wealth has risen more in the first two years of COVID-19 than in 23 years combined. The total wealth of the world’s billionaires is now equivalent to 13.9% of global GDP. This is a three-fold increase (up from 4.4%) in 2000.
“Billionaires’ fortunes have not increased because they are now smarter or working harder. Workers are working harder, for less pay and in worse conditions. The super-rich have rigged the system with impunity for decades and they are now reaping the benefits. They have seized a shocking amount of the world’s wealth as a result of privatisation and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments,” Ms Morgain said.
“Meanwhile, millions of others are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive. Across East Africa, one person is likely dying every minute from hunger. This grotesque inequality is breaking the bonds that hold us together as humanity. It is divisive, corrosive and dangerous. This is inequality that literally kills.”
Oxfam’s new research also reveals that corporations in the energy, food and pharmaceutical sectors —where monopolies are especially common— are posting record-high profits, even as wages have barely budged and workers struggle with decades-high prices amid COVID-19. The fortunes of food and energy billionaires have risen by USD$453 billion in the last two years, equivalent to $1 billion every two days. Five of the largest energy companies (BP, Shell, TotalEnergies, Exxon and Chevron) are together making $2,600 profit every second, and there are now 62 new food billionaires.
From Sri Lanka to Sudan, record-high global food prices are sparking social and political upheaval. 60% of low-income countries are on the brink of debt distress. While inflation is rising everywhere, price hikes are particularly devastating for low-wage workers whose health and livelihoods were already most vulnerable to COVID-19, particularly women, racialised and marginalised people. People in poorer countries spend more than twice as much of their income on food than those in rich countries.
- Today, 2,668 billionaries — 573 more than in 2020 — own $12.7 trillion, an increase of $3.78 trillion.
- The world’s ten richest men own more wealth than the bottom 40% of humanity, 3.1 billion people.
- The richest 20 billionaires are worth more than the entire GDP of Sub-Saharan Africa.
- A worker in the bottom 50% would have to work for 112 years to earn what a person in the top 1% gets in a single year.
The pandemic has also created 40 new pharma billionaires. Pharmaceutical corporations like Moderna and Pfizer are making $1,000 profit every second just from their monopoly control of the COVID-19 vaccine, despite its development having been supported by billions of dollars in public investments. They are charging governments up to 24 times more than the potential cost of generic production. Meanwhile, 87% of people in low-income countries have still not been fully vaccinated.
“The extremely rich and powerful are profiting from pain and suffering. This is unconscionable. Some have grown rich by denying billions of people access to vaccines, others by exploiting rising food and energy prices. They are paying out massive bonuses and dividends while paying as little tax as possible. This rising wealth and rising poverty are two sides of the same coin, proof that our economic system is functioning exactly how the rich and powerful designed it to do.
We need governments to start tackling this catastrophe by implementing the most common sense, transformational solution we have: by taxing extreme wealth, taxing big corporations,” Ms Morgain said.
Oxfam recommends that governments urgently:
- Introduce one-off solidarity taxes on billionaires’ pandemic windfalls to fund support for people facing rising food and energy costs and a fair and sustainable recovery from COVID-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ and is now considering introducing a windfall tax on energy profits as well as a tax on undeclared assets held overseas to repay IMF debt. The super-rich have stashed nearly $8 trillion in tax havens.
- End crisis profiteering by introducing a temporary excess profit tax of 90%to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.
- Introduce permanent wealth taxes to rein in extreme wealth and monopoly power, as well as the outsized carbon emissions of the super-rich. An annual wealth tax on millionaires starting at just 2% on wealth over $5 million, and 5% on billionaires, could generate $2.52 trillion a year — enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.