Pandemic saw billionaire bonanza while millions face cost of living crisis

Pandemic saw billionaire bonanza while millions face cost of living crisis

Billionaires in the food and energy sectors are increasing their fortunes by $1 billion dollars every two days

Ahead of the World Economic Forum at Davos, Oxfam calls for an end to crisis profiteering

Billionaires’ wealth has risen more in the first 24 months of COVID-19 than in 23 years combined. The total wealth of the world’s billionaires is now equivalent to 13.9 percent of global GDP, up from 4.4 percent in 2000.

While billionaire wealth soars, it is expected that over a quarter of a million more people will be pushed into extreme poverty in 2022, according to a new briefing from Oxfam, Profiting from Pain. The briefing comes as the World Economic Forum — the exclusive get-together of the global elite in Davos — takes place face-to-face for the first time since COVID-19.

Jim Clarken, CEO, Oxfam Ireland said: “Billionaires arriving in Davos have seen an incredible surge in their fortunes. Simply put, the pandemic followed by the steep increases in food and energy prices have been a bonanza for them. Meanwhile, decades of progress on ending extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive.”

The wealth of Ireland’s nine billionaires has increased by a massive €15.55 billion since the start of the pandemic, a 44 percent increase bringing it to €51 billion, while latest figures show that 691,587 people in Ireland are experiencing deprivation, of which 204,710 are children.

Globally, 573 people became new billionaires during the pandemic, at the rate of one every 30 hours. While this year, it is expected that 263 million more people will crash into extreme poverty, at a rate of a million people every 33 hours.

Oxfam’s new research also reveals that corporations in the energy, food and pharmaceutical sectors — where monopolies are especially common — are posting record-high profits, even as wages have barely budged and workers struggle with decades-high prices amid COVID-19. The fortunes of food and energy billionaires have risen by $453 billion in the last two years, equivalent to $1 billion every two days. Five of the largest energy companies are together making $2,600 profit every second, and there are now 62 new food billionaires.

In Ireland, five of the biggest Irish food companies have had a total profit rise of €174 million in just one year - in the last year of recorded profits. Meanwhile five of the best-known Irish energy companies had combined yearly profits rise of €280 million. Yearly inflation for energy products in Ireland is 43.6 percent. While food inflation in Ireland is currently at 3.5% in consumer price figures, wholesale prices are likely to push figures higher in the near future.

From Sri Lanka to Sudan, record-high global food prices are sparking social and political upheaval. 60 percent of low-income countries are on the brink of debt distress. While inflation is rising everywhere, price hikes are particularly devastating for low-wage workers whose health and livelihoods were already most vulnerable to COVID-19, particularly women, racialised and marginalised people. People in poorer countries spend more than twice as much of their income on food than those in rich countries.

Clarken continued: “It is unconscionable that some are profiteering from the pandemic and its aftermath while others are trying to choose between paying their energy bills or going hungry. Billionaires’ fortunes have not increased because they are smarter or working harder. Workers are working harder, for less pay and in worse conditions. The super-rich have rigged the global 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.

“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.”

“Government leaders in Davos face a choice: act as proxies for the billionaire class who plunder their economies or take bold steps to act in the interests of their great majorities.”

Oxfam recommends that governments, including Ireland’s, urgently:

  • 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.
  • End crisis profiteering by introducing a temporary excess profit tax of 90 percent 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. A windfall tax on energy companies in Ireland alone is estimated to raise €60 million.
  • 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 percent, and 5 percent 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. Oxfam has estimated that a 1.5% wealth tax on Irish millionaires owning above €4 million could raise €4 billion in tax revenue. A 1.5% wealth tax on Irish billionaires alone could raise a little over €0.7 billion.
  • Governments like Ireland should support the development of a Global Assets Registry to address extreme wealth that is held by oligarchs, from Russia and beyond, in financial centres including the IFSC.

Download “Profiting from Pain” here.

ENDS

CONTACT: Alice Dawson-Lyons | alice.dawsonlyons@oxfam.org | +353 83 198 1869

Notes to editors:

  • Download the methodology document outlining how Oxfam calculated the statistics in the brief here.
  • 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 the Forbes billionaire list, including for Ireland.
  • Irish statistics on deprivation is taken from the CSO – Central Statistics Office
  • Figures on Irish food and energy companies are taken from The Irish Times Top 1000 Guide to Irish Business, which uses CRO data, in the Energy and Food Sections respectively.
  • The five largest energy companies globally referenced are BP, Shell, TotalEnergies, Exxon and Chevron
  • The five biggest Irish food companies referenced are Kerry Group, Glanbia, Musgrave, Ornua and Moy Park.
  • The five best-known Irish energy companies referenced are ESB, Energia, Bord Gais, SSE Airtricity and Energia Power.
  • All amounts expressed in US dollars have been adjusted for inflation using the US consumer price index.
  • The World Bank defines extreme poverty as living on less than $1.90 (€1.75) per day.
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