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, ‘The Inequality Virus’ published to coincide with 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.
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 marginalized 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.”
Billionaires fortunes rebounded as stock markets recovered despite continued recession in the real economy. Their total wealth hit $11.95 trillion in December 2020, equivalent to G20 governments’ total COVID-19 recovery spending. The road to recovery will be much longer for people who were already struggling pre-COVID-19. When the virus struck 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.
“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.”
Oxfam says its 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.
The Inequality Virus (Oxfam)