Skip to content
Ending global poverty begins with women’s rights
I would like to receive email updates from Oxfam Canada. I understand I can unsubscribe at any time.

Pandemic profits for companies soar by billions as poorest pay price – Oxfam

September 9, 2020
Some corporations are cashing in on Covid-19 on behalf of the wealthiest

 
Thirty-two of the world’s largest companies stand to see their profits jump by more than $109 billion in 2020 as the Covid-19 pandemic lays bare an economic model that delivers profits for the wealthiest on the back of the poorest, according to a new Oxfam report today.

Power, Profits and the Pandemic, published ahead of tomorrow’s six-month anniversary of the declaration of the pandemic, also outlines how COVID-19 has made things even worse by encouraging corporations around the globe to put profits before workers’ safety, push costs and risks down the supply chain and use their political influence to shape policy responses.

Globally, half a billion people are expected to be pushed into poverty by the economic fallout from the pandemic. 400 million jobs have already been lost and the International Labour Organization estimates that more than 430 million small enterprises are at risk.

Meanwhile, the protection given to shareholders has fuelled a share price boom. The top 100 stock market winners have added more than $3 trillion to their market value since the pandemic. As a result, the 25 richest billionaires have increased their wealth by staggering amounts. Jeff Bezos could personally pay each of Amazon’s 876,000 employees a one-time $105,000 bonus today and still be as wealthy as he was at the beginning of the pandemic.

Oxfam International Executive Director Chema Vera said: “COVID-19 has been tragic for the many but good for a privileged few. The economic crisis we are suffering because of the pandemic has been fuelled by a rigged economic model. The world’s largest corporations are making billions at the expense of low wage workers and funnelling profits to shareholders and billionaires – a small group of largely white men in rich nations.

“It is sickening that, in the middle of a pandemic, some corporations are paying-out massive dividends to wealthy shareholders having received government bailouts meant to protect jobs. Scarce resources are being handed to the already super wealthy at a time when hundreds of millions of people are suffering the consequences of this pandemic. Women, racial and ethnic minorities or migrants are being significantly impacted.”

The report outlines how corporations have exacerbated the economic impacts of the pandemic by funnelling profits to shareholders instead of investing in better jobs and climate-friendly technology, paying their fair share of taxes, and prioritizing profits over people. The report sets out examples including:

  • 10 of the world’s largest apparel brands paid 74 per cent of their profits (a total of $21 billion) to their shareholders in dividends and stock buybacks in 2019. This year 2.2 million workers in Bangladesh alone were affected when textile orders were cancelled. Factory shutdowns have lowered revenues in the country by an estimated $3bn.
  • In Canada, at least 170 of Canadian buyers sourcing from Bangladesh either delayed, put on hold or cancelled their orders since the onset of COVID-19. Globally, at least 1931 brands cancelled, delayed or held orders with the total value of these orders around $3.7 billion. The drop in orders to factories is affecting 2.26 million workers and over one million garment workers in Bangladesh have already have been fired or furloughed, yet Canadian brands are still reporting profits.
  • In the US, an estimated 27,000 meat packing workers have tested positive – one in nine employees – and more than 90 have died from COVID-19. The country’s largest meat processing company, Tyson Foods, published a letter advocating against closing its factories, despite 8,500 of its employees testing positive for the virus.
  • Mining operations in Peru have been kept open despite high risks of infection among their employees.
  • Chevron announced cuts of 10-15 per cent of its 45,000 global work force despite spending more cash on dividends and share buybacks during the first quarter of the year than they generated from core business.

Oxfam finds that many companies’ ability to cope with the economic damage wreaked by the pandemic and take care of their employees has been severely undermined by years of increased payments to shareholders; some companies having handed over amounts significantly greater than their profits.

From 2016 to 2019, 59 of the world’s most profitable companies in the US, Europe, South Korea, Australia, India, Brazil, Nigeria and South Africa distributed almost $2 trillion to their shareholders, with pay-outs averaging 83 per cent of earnings.

Oxfam is calling for a response to the immediate crisis that prioritizes support for workers and small businesses. It includes establishing a COVID-19 Pandemic Profits Tax to ensure shared sacrifice, and the redeployment of resources away from those cashing in on the pandemic and toward those bearing the burden.

Long term, Oxfam is asking policymakers and corporations to re-balance corporate purpose, profits and power away from exclusively benefiting executives and shareholders towards workers, suppliers, consumers and communities. A corporate reform agenda should ensure every worker is paid a living wage, has a safe place to work and a voice in the workplace before a single dividend is paid to shareholders. Corporations must pay their fair share of tax and policy makers must rein in corporate power to stop them from rigging the rules.

Vera said: “We are at a critical juncture. We have a choice between returning to ‘business as usual’ or learning from this moment to design a fairer and more sustainable economy.”

“Some of the captains of capitalism have jumped on the bandwagon and promised to move away from a shareholder first model. This talk is cheap. The pandemic must be the catalyst for reining in corporate power, restructuring business models with purpose and rewarding all those that work with profits, creating an economy for all.

“Unless we change course, economic inequality will increase. Now is the time to shore up small businesses, workers and democratic institutions – not an even smaller number of large corporations that are exerting greater economic and political power.”

– 30 –

Notes to editors:

  •  Power, Profits and the Pandemic is available here
  • The 32 companies expected to make additional profits of $109bn in 2020 are listed in the table below. The table lists annual average profits and dividend pay-outs for the period 2016-2019, and 2020.
  • Jeff Bezos is the founder and owner of Amazon. Amazon’s market capitalization is over $1.5tn and Jeff Bezos is now the richest man on earth worth around $200bn. His wealth has increased with $92 billion in only five months, between 18 March and 20 August 2020. Bezos could have paid each of Amazon’s 876,000 employees a $105,000 bonus and would still be as wealthy as he was at the onset of the pandemic. Invested over 25 years at 6 per cent interest rate this bonus would increase to $450,000 in retirement savings for each employee.
Company
Industry
HQ country
Net profits:
AVG FYs 2016-2019
Net profits:
FY 2020 (TTM)
Pre-Pandemic Profit Margin
Pandemic Profit Margin
Excess Pandemic Profits
Pandemic Profits Tax liability
Shareholder Payout Ratio: Median FYs 2016-2019
Shareholder Payout Ratio: FY2020 (TTM*)
Microsoft
Tech
US
25.46b
44.28b
25%
31%
18.82b
17.63b
112%
86%
Intel
Tech
US
15.50b
23.66b
23%
30%
8.16b
7.48b
84%
75%
Apple
Tech
US
52.21b
58.42b
22%
21%
6.22b
7.03b
120%
154%
Walmart
Retail
US
11.22b
17.90b
2%
3%
6.68b
6.88b
126%
49%
UnitedHealth
Healthcare
US
10.85b
17.10b
5%
7%
6.25b
6.45b
58%
41%
Facebook
Tech
US
16.69b
23.52b
34%
31%
6.83b
6.08b
34%
33%
Google
Tech
US
24.30b
31.53b
19%
19%
7.23b
5.93b
34%
86%
BHP
Mining
AUS
3.16b
7.96b
8%
18%
4.80b
4.71b
138%
88%
Nestlé
Consumer goods
CH
9.77b
14.28b
11%
15%
4.51b
4.62b
136%
130%
Merck & Co
Pharmaceutical
US
5.59b
10.48b
13%
22%
4.88b
4.23b
224%
92%
CVS Health
Healthcare
US
4.49b
8.26b
2%
3%
3.76b
3.79b
109%
33%
Amazon
Retail
US
6.77b
13.18b
3%
4%
6.41b
3.52b
0%
0%
Procter & Gamble
Consumer goods
US
9.87b
13.03b
15%
18%
3.16b
3.47b
128%
117%
Visa
Finance
US
8.77b
11.75b
46%
51%
2.99b
3.25b
108%
97%
Cisco Systems
Tech
US
8.02b
11.21b
16%
23%
3.19b
2.93b
170%
84%
Johnson & Johnson
Pharmaceutical
US
12.06b
15.19b
15%
19%
3.12b
2.69b
108%
96%
Home Depot
Retail
US
9.74b
11.83b
10%
10%
2.09b
2.45b
123%
96%
Roche
Pharmaceutical
CH
10.72b
13.68b
18%
21%
2.96b
2.34b
75%
75%
Oracle
Tech
US
8.29b
10.14b
21%
26%
1.85b
1.69b
252%
227%
Deutsche Telekom
Telecom
DE
3.45b
4.27b
4%
5%
.82b
.94b
76%
92%
Reliance Industries
Energy
IN
5.09b
5.62b
8%
8%
.53b
.75b
9%
12%
ASML
Tech
NL
2.50b
3.25b
23%
23%
.75b
.65b
61%
64%
MTN Group
Telecom
ZA
.35b
.95b
3%
10%
.60b
.59b
207%
60%
AbbVie
Pharmaceutical
US
6.21b
6.96b
21%
19%
.75b
.58b
134%
106%
Novo Nordisk
Pharmaceutical
DK
5.83b
6.25b
34%
33%
.43b
.51b
92%
86%
Telecom Italia
Telecom
IT
.67b
1.17b
3%
6%
.51b
.51b
26%
37%
Crédit Agricole Group
Finance
FR
7.21b
7.23b
21%
21%
.02b
.36b
28%
0%
AngloGold Ashanti
Gold
ZA
-.00b
.30b
0%
8%
.30b
.28b
72%
24%
Tata Consultancy
Tech
IN
4.06b
4.13b
22%
20%
.08b
.26b
69%
84%
Power Grid Corporation of India
Energy
IN
1.19b
1.40b
28%
28%
.21b
.26b
28%
42%
Pfizer
Pharmaceutical
US
13.99b
14.17b
27%
29%
.18b
.23b
137%
58%
BUA Cement
Industrial
NG
.12b
.17b
41%
35%
.05b
.05b
6%
8%
For more information or to arrange an interview please contact:

Paula Baker
Media Relations
Oxfam Canada
(613) 240-3047
paula.baker@oxfam.org

Share This