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

The 1,000 richest people on the planet recouped their COVID-19 losses within just nine months, but it could take more than a decade for the world’s poorest to recover from the economic impacts of the pandemic, reveals a new Oxfam report today. ‘The Inequality Virus’ is being published on the opening day of the World Economic Forum’s ‘Davos Agenda’. 

The report shows that 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. 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.   

A new global survey of 295 economists from 79 countries, commissioned by Oxfam, 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. 

Oxfam’s report shows how the rigged economic system is enabling a super-rich elite to amass wealth in the middle of the worst recession since the Great Depression while billions of people are struggling to make ends meet. It reveals how the pandemic is deepening long-standing economic, racial and gender divides. 

• The recession is over for the richest. 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 in the world 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 unemployed. Europe’s 305 billionaires have seen their fortunes increase by nearly 500 billion euro since March – enough to write a cheque of 11,092 euro to each one of the poorest 10% of Europeans.
   

• Women are hardest hit, yet again. Globally, women are overrepresented in the low-paid precarious professions hit hardest hit by the pandemic. If women were represented at the same rate as men in these sectors, 112 million women would no longer be at high risk of losing their incomes or jobs. Women also make up roughly 70 percent of the global health and social care workforce − essential but often poorly paid jobs that put them at greater risk of COVID-19.  
   

• Inequality is costing lives. Infection and mortality rates are higher in poorer areas of countries such as France and Spain while England’s poorest regions experience mortality rates double that of the richest areas. In the EU, 74 percent of the highest-paid employees can work from home, compared with only 3 percent of the lowest-paid workers putting them at greater risk of contracting COVID-19. 
   

• Fairer economies are the key to a rapid economic recovery from COVID-19. A temporary tax on excess profits made by the 32 global corporations that have gained the most during the pandemic could have raised $104 billion in 2020. This is enough to provide unemployment benefits for all workers and financial support for all children and elderly people in low- and middle-income countries. At the EU level, this amount is almost the equivalent of the EU’s financial support plan for Europeans at risk of unemployment and loss of income due to the pandemic.
   

Gabriela Bucher, Executive Director of Oxfam International, said: 

"We stand to witness the greatest rise in inequality since records began. The deep divide between the rich and poor is proving as deadly as the virus.” 

“Rigged economies are funnelling wealth to a rich elite who are riding out the pandemic in luxury, while those on the frontline of the pandemic —shop assistants, healthcare workers, and market vendors— are struggling to pay the bills and put food on the table.  

“Women and marginalised racial and ethnic groups are bearing the brunt of this crisis. They are more likely to be pushed into poverty, more likely to go hungry, and more likely to be excluded from healthcare.” 

“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,” added Bucher. 

“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.” 

Chiara Putaturo, Oxfam’s EU inequality and tax policy advisor said:  

“The EU can step up the fight against inequality and build back better by creating a fairer tax system.  

“Ordinary Europeans should not have to pick up the bill of COVID-19 through cuts to vital services like healthcare and education.  

“Taxation plays a big role in determining how we will recover from the pandemic. The EU must end the practice of tax dodging and make sure that corporations, like big tech, pay their fair share of tax.  

“The EU has a unique opportunity to do this through the swift introduction of an effective EU digital tax, public Country by Country Reporting for corporations and better screening of tax havens in the EU and beyond.”