Thirty-two of the world’s largest companies could see profits jump by USD $109 billion more in 2020 as the coronavirus pandemic lays bare an economic model that delivers profits for the wealthiest on the back of the poorest, according to a new Oxfam report.
Power, Profits and the Pandemic, published on the six-month anniversary of the declaration of the pandemic, also outlines how COVID-19 has exposed and exacerbated existing incentives for corporations to put profits before workers’ safety, push costs and risks down the supply chain and use their political influence to shape policy responses.
Globally, half a billion people are expected to be pushed into poverty by the economic fallout from the pandemic. Four hundred million jobs have already been lost and the International Labour Organisation estimates that more than 430 million small enterprises are at risk.
The report also highlights recent data that shows the 25 richest billionaires have increased their wealth by a staggering USD $255 billion between mid-March and late May alone. To put this in context, Jeff Bezos could personally pay each of Amazon’s 876,000 employees a one-time USD $105,000 bonus today and still be as wealthy as he was at the beginning of the pandemic.
Oxfam Australia Chief Executive Lyn Morgain said in Australia, it appeared that some big businesses have not been operating in good faith during an unprecedented time of social and community need.
We are deeply concerned by reports that some companies have used government support intended to protect jobs, to pay out large bonuses to CEOs, while others continue to pay out dividends to shareholders, using taxpayer funds,” Ms Morgain said.
Any exploitation of the system to boost the pay cheques of the wealthiest, and further deepen the inequality that exists in our society, is unforgiveable and should not be tolerated. There must be full transparency and appropriate scrutiny of the way taxpayer funds have been used.”
Ms Morgain said as the Federal Government began to compile a recession recovery plan, it must invest in jobs and those suffering the most, rather than fall back on policy that has been proven to exacerbate inequality.
That means putting people and the planet ahead of profits by investing in environmentally responsible projects that will help us respond to the climate crisis, supporting care work and locking in the current and long overdue increased rate of JobSeeker – not tax cuts for the rich.
And corporations must do their bit to support Australia’s recovery by paying their fair share of tax.
What’s more, the Federal Government must widen its recovery focus to include our neighbours and those countries being impacted the hardest. Countries like Yemen whose health systems have been decimated by years of war; countries hosting large numbers of refugees; and those with high proportions of highly vulnerable groups, such as informal workers.”
Ms Morgain said the global economic crisis sparked by the pandemic was the inevitable result of an unfair and broken system that had favoured the richest in our society for too long.
When a small group of largely white men in rich nations are making billions at the expense of low wage and vulnerable workers, with profits funnelled to shareholders and the wealthy few, it’s clear the system is not fit for purpose,” Ms Morgain said.
We are at a critical juncture. We have a choice between returning to ‘business as usual’, or learning from this moment to design a fairer and more sustainable economy.
Unless we change course, economic inequality will increase. The rich will become richer, and the poor will become poorer, to the detriment of us all.”