Mega-rich recoup Covid-losses in record-time yet billions will live in poverty for at least a decade

Mega-rich recoup Covid-losses in record-time yet billions will live in poverty for at least a decade

  • As Ireland’s billionaires’ fortunes increase by 3.28bn during pandemic - essential workers, often on minimum or low-paid wages, kept the country going

  • World’s ten richest men increase wealth by half a trillion dollars during pandemic  

The 1,000 richest people on the planet recouped their Covid-19 losses within just nine months, while it could take more than a decade for the world’s poorest to recover from the economic impacts of the pandemic, a new report from Oxfam revealed today. 

Mirroring this global inequality trend, Ireland’s own nine billionaires saw their fortunes increase by €3.28 billion since March – a tenth of which would pay for a Covid-19 vaccine for every person in the Republic of Ireland. Meanwhile, essential workers - such as our carers and supermarket and factory workers – cared for our vulnerable and kept our food supplies running throughout the pandemic -  quite often on minimum or low-paid wages. 

Oxfam’s The Inequality Virus report, published to coincide with the opening day of the World Economic Forum’s ‘Davos Agenda’, highlights how 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.  

A new global survey commissioned by Oxfam of 295 economists from 79 countries, including Ireland, reveals that 87 percent 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. This thinking was shared by 85 percent of Irish economists who participated, with most estimating it would be the worst increase in inequality in Ireland since the financial crash of 2008. 

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.

Jim Clarken, Chief Executive of Oxfam Ireland, said: “We stand to witness the greatest rise in inequality since records began, with the deep divide between the rich and poor proving as deadly as the virus itself. Around the world the impact of Covid-19 is magnifying and exacerbating existing inequalities – as well as racial and gender divides. One of the most extreme and unjust indicators of inequality we are seeing around the world right now is between those who have access to life saving vaccine and those who don’t’. 

“Rigged economies are funnelling wealth to a rich elite who are riding out the pandemic in safety, while those on the frontline— our shop assistants, healthcare workers, and factory workers — are struggling to pay the bills and put food on the table, and often do not have benefits such as paid sick leave. 

“The world’s ten 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. 

 “In Ireland, the fallout of the pandemic on employment has disproportionately hit young adults as well as people in low-paid occupations, all of whom are more likely to be paying rent. Without significant government intervention, we are looking at a return to long-term unemployment, increasing risks of homelessness and economic insecurity for younger generations in Ireland. 

“In addition, women and marginalised racial and ethnic groups are yet again bearing the brunt. They are more likely to be pushed into poverty, more likely to go hungry, and more likely to be excluded from healthcare. 

“Long before Covid-19 disrupted our lives, in Ireland and across the world, women sustained our societies through their paid and unpaid care work. They continue to do so as we manage this public health crisis and as the social and economic consequences unfold. However, there is a lack of attention to gender equality in much of the economic decision making that has taken place since the onset of the pandemic.”  

Oxfam said the road to recovery will be much longer for people who were already struggling pre-Covid. When the virus took hold, 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. 

Clarken concluded: “Extreme inequality is not inevitable, but a policy choice. Governments around the world must seize this opportunity to build more equal, more inclusive economies that end poverty and protect the planet. 

“The fight against inequality must be at the heart of economic rescue and recovery efforts. Governments must ensure everyone has access to a Covid-19 vaccine and financial support if they lose their job. They must invest in public services and low carbon sectors to create millions of new jobs and ensure everyone has access to a decent education, health, and social care, and they must ensure the richest individuals and corporations contribute their fair share of tax to pay for it.  

“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.”

ENDS

Oxfam Ireland spokespeople are available for interview. For interviews, images or more information, contact: 

Alice Dawson-Lyons | alice.dawsonlyons@oxfam.org | 083 198 1869

Notes to editors

Download ‘The Inequality Virus’ and a methodology document outlining how Oxfam calculated the statistics in the report here

Oxfam Ireland are calling for the Irish Government to: 

  • Support the call for a global ‘People’s Vaccine’ to ensure Covid-19 vaccines are made a global public good—free of charge to the public, fairly distributed and based on need. 
  • Support calls for a tax on the excess profits earned during the pandemic by corporations the world over which could generate $104bn - enough to provide unemployment protection for all workers, and financial support for all children and elderly people in the poorest countries. 
  • Significantly increase investments in public services and social infrastructure, especially the care economy, while prioritising gender budgeting and the equality budgeting process. 
  • Bail out businesses responsibly. Priority must be given to supporting small businesses that have the least ability to cope with the crisis. Any public support for large corporations should be conditional on measures that uphold the interests of workers, farmers and taxpayers and build a sustainable future.   
  • Fulfil their commitment to develop a new set of indicators to monitor and progress societal well-being and reduce inequality, while ensuring that economic development remains within planetary boundaries. 
  1. Sunday Business Post analysis from November 2020 estimated the cost of purchasing Covid-19 vaccines as up to €300 million for an initial supply. Daniel Murray SBP Nov 8 2020.
  2. Eight top Irish economists responded to Oxfam’s survey from UCD, TCD and various think tanks and Government agencies. 85 percent of Irish economists who answered Oxfam’s survey thought inequality would increase in Ireland due to Covid-19, with most thinking it would be the worst increase in inequality since the financial crash of 2008. 
  3. For sources related to the tax on excess profits- U. Gneiting, N. Lusiani and I. Tamir. (2020). Power, Profits and the Pandemic: From corporate extraction for the few to an economy that works for all. Oxfam International.
  4. The financing gap to offer a social protection floor package in low-income countries is $48bn in 2020. ILO. (2020c). Financing gaps in social protection.
  5. More information on Oxfam’s call for a People’s Vaccine.
  6. During the week of 25 January, the World Economic Forum (WEF) will digitally convene the ‘Davos Dialogues’, where key global leaders will share their views on the state of the world in 2021. 
  7. 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. 
  8. According to Forbes the 10 richest people, as of December 31st 2020, have seen their fortunes grow by $540 billion dollars since 18March 2020. 
  9. The oldest historical records of inequality trends are based on tax records that go back to the beginning of the 20th century.
  10. 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 percent, 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. 
  11. 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.
  12. 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.
  13. All amounts are expressed in US dollars.
  14. 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 23-30 January in around 30 countries, including Kenya, Mexico, Norway and the Philippines, to promote solutions to inequality and demand that economies work for everyone.
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