According to Oxfam Australia Chief Executive Lyn Morgain, the pandemic created a new billionaire every 30 hours and pushed a million into extreme poverty every 33 hours.
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During the pandemic, a new billionaire was produced every 30 hours, the same rate at which a million people could slip into extreme poverty this year, according to a new Oxfam brief released today.
Profiting from Pain is released just as the World Economic Forum, the world’s most exclusive gathering of the global elite, convenes in Davos, Switzerland, for the first time since the pandemic.
The billionaires converging on Davos, according to Oxfam Australia Chief Executive Lyn Morgain, have experienced a tremendous boost in their fortunes over this period.
“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.”
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During the pandemic, 573 people became billionaires at a rate of one every 30 hours, with five new billionaires minted in Australia in a single year, according to the report. Meanwhile, Oxfam estimates that 263 million more people will fall into extreme poverty this year, at a rate of one million every 33 hours.
The wealth of billionaires has increased more in the first two years of COVID-19 than in the previous 23 years combined. The combined wealth of the world’s billionaires now accounts for 13.9% of global GDP. This is a threefold increase from 2000 (4.4 %).
“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 study also finds that corporations in the energy, food, and pharmaceutical sectors — all of which have monopolies — are making record profits, despite wages barely moving and workers grappling with decades-high prices in the face of COVID-19. In the last two years, the fortunes of food and energy billionaires have increased by USD$453 billion, or $1 billion every two days. Five of the world’s major energy companies (BP, Shell, TotalEnergies, Exxon, and Chevron) are producing $2,600 in profit every second, while 62 new food billionaires have emerged.
Record-high global food costs are causing social and political unrest from Sri Lanka to Sudan. 60% of low-income countries are on the verge of defaulting on their debt. While prices are growing everywhere, they are most damaging to low-wage workers, especially women, racialized and marginalized people, whose health and livelihoods were already threatened by COVID-19. People in poor countries spend more than twice as much of their income on food than people 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 resulted in the creation of 40 new pharmaceutical billionaires. Pharmaceutical companies such as Moderna and Pfizer are profiting $1,000 every second from their monopoly control of the COVID-19 vaccine, despite billions of dollars in public funding for its research. Governments are being charged up to 24 times the potential cost of generic production. Meanwhile, 87 % of people in low-income nations have not received all of their vaccines.
“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 urges governments to immediately:
- 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.