Mega-rich recoup COVID-losses in record-time yet billions will live in poverty for at least a decade
The 1,000 richest people on the planet recouped their COVID-19 losses within just nine months, but it could take more than a decade for the world’s poorest to recover from the economic impacts of the pandemic, reveals a new Oxfam report today.
The Inequality Virus is being published on the opening day of the World Economic Forum’s virtual meeting, The Davos Agenda. The report shows that COVID-19 has the potential to increase economic inequality in almost every country at once, the first time this has happened since records began over a century ago. Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly White male billionaires to bounce back.
In Canada, the fortunes of the country’s 44 billionaires have increased by almost $63.5 billion (CAD) since March 2020. Oxfam estimates this would be enough to give every one of the 3.8 million poorest people in Canada a cheque for $16,823 (CAD).
“We stand to witness the greatest rise in inequality since records began. The deep divide between the rich and poor is proving as deadly as the virus,” said Diana Sarosi, director of policy and campaigns for Oxfam Canada.
“Women and marginalized racial and ethnic groups are bearing the brunt of this crisis. They are more likely to be pushed into poverty, go hungry or be excluded from healthcare. And yet, they are more likely to work frontline jobs that increase their exposure to the virus. COVID-19 has also led to an explosion in unpaid care work, which is done predominantly by women. This kind of extreme inequality is not inevitable, it is the result of policy choices. Canada and governments around the world must seize this opportunity to build more equal, more inclusive economies that end poverty and protect the planet.”
A new global survey of 295 economists from 79 countries, commissioned by Oxfam, reveals that 87 per cent of respondents, including Jeffrey Sachs, Jayati Ghosh and Gabriel Zucman, expect an ‘increase’ or a ‘major increase’ in income inequality in their country as a result of the pandemic.
Oxfam’s report shows how the rigged economic system is enabling a super-rich elite to amass wealth in the middle of the worst recession since the Great Depression while billions of people are struggling to make ends meet. It reveals how the pandemic is deepening long-standing economic, racial and gender divides.
- The recession is over for the richest. The world’s 10 richest men have seen their combined wealth increase by half a trillion dollars since the pandemic began – more than enough to pay for a COVID-19 vaccine for everyone and to ensure no one is pushed into poverty by the pandemic. At the same time, the pandemic has ushered in the worst job crisis in over 90 years with hundreds of millions of people now underemployed or out of work.
- Women are hardest hit, yet again. Globally, women are overrepresented in the low-paid precarious professions that have been hardest hit by the pandemic. If women were represented at the same rate as men in these sectors, 112 million women would no longer be at high risk of losing their incomes or jobs. Women make up roughly 70 per cent of the global health and social care workforce – putting them at increased risk of contracting COVID-19.
- Inequality is costing lives. Afro-descendants in Brazil are 40 per cent more likely to die of COVID-19 than White people, while nearly 22,000 Black and Hispanic people in the United States would still be alive if they experienced the same COVID-19 mortality rates as their White counterparts. Infection and mortality rates are higher in poorer areas of countries.
- Fairer economies are the key to a rapid economic recovery from COVID-19. A temporary tax on excess profits made by the 32 global corporations that have gained the most during the pandemic could have raised $104 billion in 2020. This is enough to provide unemployment benefits for all workers and financial support for all children and elderly people in low- and middle-income countries.
Billionaires fortunes rebounded as stock markets recovered despite continued recession in the real economy. Their total wealth hit $11.95 trillion in December 2020, equivalent to G20 governments’ total COVID-19 recovery spending. The road to recovery will be much longer for people who were already struggling pre-COVID-19. When the virus struck over half of workers in poor countries were living in poverty, and three-quarters of workers globally had no access to social protections like sick pay or unemployment benefits.
“The fight against inequality must be at the heart of economic rescue and recovery efforts. This needs to be a global effort by governments to ensure everyone has access to a COVID-19 vaccine; financial support if they lose their job; investing in public services as well as low carbon sectors to create millions of new jobs,” Sarosi added.
“These measures must not be band-aid solutions for desperate times but a ‘new normal’ in economies that work for the benefit of all people, not just the privileged few.”
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Notes to editors:
- Download the full report of ‘The Inequality Virus’, the report summary and the methodology document outlining how Oxfam calculated the statistics in the report. All reports found HERE.
- During the week of January 25, the World Economic Forum (WEF) will digitally convene the Davos Agenda, where key global leaders will share their views on the state of the world in 2021.
- Oxfam’s calculations are based on the most up-to-date and comprehensive data sources available. Figures on the very richest in society come from Forbes’ 2020 Billionaires List. Because data on wealth was very volatile in 2020, the Credit Suisse Research Institute has delayed the release of its annual report on the wealth of humanity until spring 2021. This means that we have not been able to compare the wealth of billionaires to that of the bottom half of humanity as in previous years.
- According to Forbes the 10 richest people as of December 31, 2020, had seen their fortunes rise $540 billion dollars since the March 18, 2020. The 10 richest men were listed as: Jeff Bezos, Elon Musk, Bernard Arnault and family, Bill Gates, Mark Zuckerberg, Larry Ellison, Warren Buffett, Zhong Shanshan, Larry Page, and Mukesh Ambani.
- The oldest historical records of inequality trends are based on tax records that go back to the beginning of the 20th century.
- The World Bank has simulated what the impact of an increase in inequality in almost every country at once would mean for global poverty. The Bank finds that if inequality (measured by the Gini coefficient) increases by 2 percentage points annually and global per capita GDP growth contracts by 8 per cent, 501 million more people will still be living on less than $5.50 a day in 2030 compared with a scenario where there is no increase in inequality. As a result, global poverty levels would be higher in 2030 than they were before the pandemic struck, with 3.4 billion people still living on less than $5.50 a day. This is the Bank’s worst-case scenario, however projections for economic contraction across most of the developing world are in line with this scenario. In the World Economic Outlook (October 2020), the International Monetary Fund’s worst-case scenario does not see GDP returning to pre-crisis levels until the end of 2022. The OECD has warned this will lead to long-term increases in inequality unless action is taken.
- Oxfam calculated that 112 million fewer women would be at risk of losing their jobs or income if men and women were equally represented in low-paid, precarious professions that have been most impacted by the COVID-19 crisis based on an ILO policy brief published in July 2020.
- All amounts are expressed in US dollars unless otherwise indicated.
- Calculations of the salaries of Canada’s CEOs was based on data from the Canadian Center for Policy Alternatives (2018).
- Data on the average salary of a nurse in Canada came from Statistics Canada.
- Oxfam is part of the Fight Inequality Alliance, a growing global coalition of civil society organizations and activists that are holding the Global Protest to Fight Inequality from January 23 – 30 in around 30 countries, including Kenya, Mexico, Norway and the Philippines, to promote solutions to inequality and demand that economies work for everyone.