Inequality

  • The widening gap between the world’s richest and poorest people is tearing societies apart. Too many still toil in extreme poverty. In contrast, wealth is increasingly concentrated in the hands of a few, who can use it to capture disproportionate power to shape the future. The widening gap between the richest and poorest is damaging economies and pushing more people into poverty. There are practical ways to close the gap.

10 brilliant questions you asked about our inequality report

Oxfam’s new report, The Inequality Virus, reveals that the wealth of the world’s 10 richest men has increased by half a trillion dollars since the pandemic began – more than enough to pay for a vaccine for all, and prevent anyone from falling into poverty because of the virus. We have received lots of great questions about the report – here are our answers to the 10 most frequently asked questions.

How can you be sure that Covid-19 will lead to a huge surge in inequality across the globe?

The IMF, the World Bank and the Organisation for Economic Cooperation and Development have all raised concerns that we will see a Covid-fuelled spike in inequality worldwide. 

These fears were echoed by a global survey of 295 economists from 79 countries, commissioned by Oxfam, where 87 percent of respondents said they expected an ‘increase’ or a ‘major increase’ in income inequality in their country as a result of the pandemic.

It is also echoed by what is happening on the ground in rich and poor countries alike. The richest in society have seen their savings increase during lockdown, but the poorest have seen their incomes fall and often had to borrow to survive. 

While it will be some time before we have the data needed to produce a concrete measure of inequality, everything points to an increase in inequality in every country for the first time since records began.

What is the link between wealth, inequality and poverty?

Our deeply unfair economies are enriching an already-wealthy minority at the expense of millions of poor people. Over the last 40 years, the richest one percent of the global population has captured more of the proceeds of economic growth than the poorest half of humanity combined. This inequality fuels poverty.

If the proceeds of economic activity had been shared more evenly, if governments invested in healthcare and education rather than slashing the tax bills of wealthy individuals and corporations, if companies prioritised a living wage for workers over bumper payouts for shareholders, if access to medicines and vaccines was prioritised over the intellectual property rights and profits of big pharma, then poverty could have been eliminated many years ago.

Why did billionaires’ wealth rebound so quickly?

Stock markets suffered the worst shock in their history when the pandemic was announced, destroying billions of dollars’ worth of financial assets. Central banks such as the US Federal Reserve and the European Central Bank injected billions of dollars to prevent a crash, the markets quickly rallied, and with them the fortunes of the world’s richest people who hold much of their wealth in stocks and shares. As a result, billionaires recouped their Covid-19 losses in just nine months while it could take the world’s poorest people more than a decade to recover. 

Why is Oxfam criticising billionaires and corporations for being successful and making a profit?

Making money is not the problem but excessive profits and extreme wealth are. These are the symptoms of a broken economic system which is benefiting a minority of people at the expense of everyone else.

Take the pharmaceutical industry. The US government invested $1 billion of US taxpayers’ money in Moderna to support the development of a Covid-19 vaccine. Despite the fact that the company only has the capacity to supply vaccines for less than seven percent of the global population by the end of the year, it is refusing to share technology and knowhow that would enable other manufacturers to produce it. Moderna has also pre-sold all the vaccines it will produce this year to rich nations for a high price, leaving nothing for developing countries. This has made the owners of Moderna very rich indeed. This is exactly the kind of economic failure that drives extreme inequality.

Why is Oxfam criticising wealthy people such as Carlos Slim, Jeff Bezos and Mark Zuckerberg, who have made multimillion-dollar donations to fund vaccine research, support hospitals and help those suffering during the Covid-19 crisis?

People who use their money to help others should be congratulated. However, charitable giving is no substitute for wealthy people and companies paying their fair share of tax, and it does not justify them using their power and connections to lobby for unfair advantages over others.

For example, US corporate philanthropy amounts to less than $20 billion a year but corporate tax dodging cost the US an estimated $135 billion in 2017.

Why is the pandemic hurting poorer people more than wealthy people?

In every country in the world, the poorest people in society have been hardest hit by the pandemic – especially women and people from marginalised racial and ethnic groups.

These people are more likely to work in sectors such as retail and tourism that have suffered big job losses as a result of the pandemic. These jobs are also largely in the informal sector, so they are less likely to have redundancy, savings or unemployment benefit to fall back on if they get laid off.

These people are less likely to have access to decent healthcare when they are ill. They are more likely to live in crowded accommodation or work as cleaners, shop assistants and care workers. This puts them at greater risk of contracting the virus, and they are more likely to suffer underlying health conditions that put them at greater risk of dying from it. 

These are people like Jean Baptiste, a 44-year-old father of three and migrant worker at a meat processing plant in the US. The failure of the industry to implement proper safety measures has led to a series of Covid-19 outbreaks. When Jean became ill, he was told to continue working and hide his fever. When he died, the company failed to inform his family or his co-workers.  After his widow shared her story with the media, she received a card and just $100 in cash. Today she is struggling to support her children alone.  

Which governments are handling the pandemic well and which are handling it badly?

Governments’ catastrophic failure to tackle inequality means most countries were woefully ill-equipped to deal with the pandemic.

Millions of people have died or been pushed into hunger and poverty because of decades of failure to invest in public healthcare, protect workers’ rights or provide adequate financial support for people who can’t work. And while Covid-19 has been a wake-up call for some governments, others are still failing to act with disastrous consequences.

For example, the Kenyan government has responded to the crisis with tax cuts for the wealthiest and big business, but has provided little additional funding for public health or to help people who have lost their income as a result of the crisis. By comparison, Argentina has introduced a temporary solidarity wealth tax that could generate over $3 billion to pay for its Covid-19 response, including medical supplies and relief for small businesses and people living in poverty.

How can governments afford to implement all the measures Oxfam is calling for in the middle of an unprecedented global recession?

Governments will need to invest to get economies up and running, so the question is where should these investments be made? Oxfam is calling on governments to prioritise investments in areas that will deliver dignified, sustainable jobs, and not waste billions bailing out wealthy companies unless conditions are attached such as a requirement for the company to pay its fair share of tax or cut carbon pollution.

Building back fairer, greener economies will bring huge benefits for people and the planet. A study by Climate Action Network International found that investing in renewables in the US generates almost three times as many jobs as investing in fossil fuels. Yet, as of November 2020, G20 nations had pledged $251 billion of Covid-19 recovery funds to fossil fuel companies. 

Why is Oxfam calling for tax hikes at a time when tax cuts are needed to stimulate economic growth and job creation?

The idea that low taxes for the rich are good for economic growth and job creation is outdated. Gita Gopinath, the Chief Economist of the International Monetary Fund, recently came out in favour of one-off solidarity taxes on wealth and high incomes to help pay for the recovery, called on governments to introduce fairer tax systems and warned against a return to austerity in the wake of the pandemic.

A strong economy depends on an educated and healthy workforce, good transport connections, a strong communications network and the rule of law. All these things are paid for with our taxes – that’s why it is essential that everyone in society pay their fair share.

Does Oxfam want to abolish billionaires?

Oxfam believes billionaires are a sign of broken economic system and that extreme wealth should be ended. We believe that the world would be a better place if there were a lot fewer billionaires and a lot more nurses.  

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Davos 2021: New Oxfam report highlights rising inequality fuelled by pandemic

Nur Jahan* with her daughter Ismat* is walking through the narrow alley beside her tent. Rohingya refygee camp. Cox's Bazar, Bangladesh. Fabeha Monir/Oxfam

Every January, the wealthy leave their exclusive, gated residences, hop in their private planes and jet off to a Swiss ski resort in Davos to hear experts and politicians discuss a range of global issues.

The pandemic resulted in a different format for this year’s twin summit (Davos 2021 featured a mixture of virtual and in-person events) – but for many affluent attendees, a slight change to the proceedings were the only blip they’ve experienced due to Covid-19.

A new Oxfam report, published for the opening day of the World Economic Forum, reveals that the world’s 10 richest men saw their wealth increase by half a trillion dollars during the pandemic, while the 1,000 richest people on the planet recouped their Covid-19 losses within just nine months.

Meanwhile, it could take more than a decade for the world’s poorest – people like carers, factory workers and cleaners – to recover from the economic impacts of the pandemic.

A woman works on a clothing line making winter jackets for an international brand in a garment factory in Dong Nai province, Vietnam. Sam Tarling/Oxfam

Oxfam commissioned a survey of 295 economists from 79 countries, including Ireland, and found that 87 percent of respondents expect an “increase” or a “major increase” in income inequality in their country as a result of Covid-19. This finding was echoed by 85 percent of the Irish economists surveyed, with the majority believing it would result in the worst rise in inequality in Ireland since the 2008 financial crash.

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 billionaires to recover.

Closer to home, 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. 

Jim Clarken, Chief Executive of Oxfam Ireland, said:

“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 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.”

The road to recovery will be much longer for people who were already struggling before the pandemic. When the virus took hold, more than half of workers in poor countries were living in poverty, and three-quarters of workers worldwide had no access to social protections such as sick pay or unemployment benefits.

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.

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The message we’re delivering? It’s time to Make Amazon Pay

Amazon is one of the most powerful corporations in the world and is headed by the richest person on the planet – CEO Jeff Bezos. At Oxfam, we’ve been focused on ensuring that companies like Amazon take their human rights obligations seriously for some time now. That is why we made the decision to join over 200 million activists and workers in a new coalition called Make Amazon Pay – to stand in solidarity with allies and workers in their call on the company to address workers’ rights, tax and climate justice.

During the Covid-19 pandemic, Amazon became a trillion-dollar corporation, with Bezos becoming the first person in history to make $200 billion in personal wealth. Meanwhile, the company’s warehouse workers risked their lives everyday as essential workers. In addition, as Amazon’s corporate empire rapidly grows, so too has its carbon footprint, which is now larger than two thirds of all countries in the world (!) and is feeding into climate breakdown.

Despite Amazon’s success, instead of giving back to the societies that helped it grow, the corporation starves them of tax revenue by tax dodging. In 2019, Amazon paid just 1.2 percent tax in the US, where its headquarters are based, up from zero percent the two previous years. Yes, you heard that right – zero percent.

Amazon is not alone in these bad practices but it sits at the heart of a failed system that drives inequality and climate breakdown. The pandemic has exposed how it places profits ahead of workers, society and our planet. Basically, it takes a lot but gives little back – so it’s time to Make Amazon Pay. This is why organisations like Oxfam have joined workers, activists, and citizens from across the globe to Make Amazon Pay.

Pay its workers fairly.

Pay for its impact on the environment.

Pay its taxes.

What do we want?

  • Amazon must provide paid sick leave, hazard pay, and premium pay for peak time hours to all their warehouse and retail workers. More than ever before, the Covid-19 pandemic reveals how essential it is that all workers can stay home when they’re sick or need to care for others. Essential workers should be compensated for the risk they undertake to keep our food supply available.
  • Amazon must talk to their workers to develop the best solutions. Supermarket and warehouse workers know the realities of their workplaces better than company headquarters. They know what will work and what won’t. Amazon should immediately engage with workers, unions and worker advocates in all jobs, from cashiers to the warehouse staff, to hear their concerns and jointly develop the best solutions to support them. Placing an hourly worker on Amazon’s board would ensure that workers’ voices are heard at the highest level of the company.
  • Amazon must ensure workers’ rights throughout its supply chains globally by actively promoting worker voice and representation, and giving its workers the freedom to unionise.
  • In line with its existing commitment, Amazon must follow through on a transparent and robust human rights due diligence process where at least one human rights impact assessment is completed and published in 2021.
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The People’s Vaccine: Everyone deserves a fair shot against Covid-19

As the Covid-19 vaccine is rolled out across Europe, the focus is on who should get it first, how to measure vulnerability to the disease and which essential workers should be top of the list.

What’s missing from the conversation is the fact that, unless governments and the pharmaceutical industry take urgent action, up to 70 low and lower middle-income countries will only have capacity to vaccinate one in 10 people against Covid-19 next year.

Wealthier nations, including Ireland, have already bought enough doses to vaccinate their entire populations almost three times over by the end of 2021! To put that in context, nations that represent just 14 percent of the world’s total population now own 53 percent of the most promising vaccines.

We need to build for a better future after Covid-19 by ensuring human rights are central to recovery efforts – however, the hoarding of the vaccine by wealthy countries lays bare nothing but inequality and exclusion.

Oxfam is a member of an alliance of organisations calling for a People’s Vaccine. This call is gaining momentum and is being backed by Covid-19 survivors, health experts, activists, world leaders past and present, including our former President Mary Robinson, faith leaders and economists.

You may not know this, but the vaccines developed by AstraZeneca/Oxford, Moderna and Pfizer/BioNTech received more than $5 billion in public funding during the course of the year. Surely this puts the onus on them to act in the global public interest, not just to turn a profit?

The People’s Vaccine Alliance is calling on all pharmaceutical corporations working on Covid-19 vaccines to openly share their technology and intellectual property through the WHO COVID-19 Technology Access Pool (C-TAP) so that billions more doses can be manufactured, and that safe and effective vaccines can be available to all people, regardless of their location or income.

The Alliance is also calling on governments to do everything in their power to ensure Covid-19 vaccines are made a global public good – free of charge, fairly distributed and based on need.

When it comes to the distribution of a life-saving vaccine, no one should be excluded. However, unless something changes dramatically, a safe and effective vaccine for Covid-19 will remain out of the reach of billions of vulnerable people worldwide while excess supplies will lie unused in wealthier nations.

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