In the News June 16

“Profiting from Pain”

Oxfam Report “Profiting from Pain” – Excerpts and Comments

Oxfam calculates 573 individuals became new billionaires during the pandemic while hundreds of millions of people fell into extreme poverty. The combined wealth of the billionaire class rose more in the first 24 months of the COVID-19 crisis than it did over the previous 23 years. The brief says the total wealth of billionaires equals 13.9 per cent of global GDP now, up from 4.4 per cent in 2000.

Over the past two years, existing billionaires have become richer and a new billionaire has emerged every 30 hours as moguls from the pharma, food, energy, tech and military industries reaped the rewards of what Oxfam calls a “rigged” economic system.

In the pharmaceutical sector alone existing billionaires became richer and 40 new ones joined their ranks as companies like Moderna and Pfizer profited from the purchase of COVID-19 vaccines and other medications they control by governments such as the ones in Canada. Oxfam points out that the development of the vaccines was funded by public investment but under private control. Those private interests then turned around and sold the vaccines to governments for up to 24 times more than their price of production bringing Big Pharma $1,000 a second in profit, Oxfam asserts.

The billionaires in food and agribusiness enjoyed a 45 per cent increase of their wealth over two years, reaching $382 billion and adding 62 people to their ranks. The U.S. Cargill “farm” family alone now has 12 billionaire members, up from eight before the pandemic, Oxfam notes. Profits soar in agribusiness as prices for food force many into hunger. Their billionaire peers from the Walton “retail” family, who own roughly half of the retail chain Walmart, are now collectively worth $238 billion.

Ian Thomson, manager of policy for Oxfam Canada, minced no words when he said, “The extremely rich and powerful are profiting from pain and suffering. This is unconscionable…. This rising wealth and rising poverty are two sides of the same coin, proof that our economic system is functioning exactly how the rich and powerful designed it to do.”

The five largest energy companies, including BP, Shell, TotalEnergies, Exxon, and Chevron declared a combined net profit of $82 billion in 2021 alone. The report shows the oil sector saw its profit margins double during the pandemic as prices soared. Oil, gas, and coal billionaires have increased their wealth by $53.3 billion, or 24 per cent, in just two years.

The tech and green sectors likewise saw rapid growth during the pandemic and produced some of the wealthiest individuals as a result, according to the brief. Apple, Microsoft, Tesla, Amazon, and Alphabet declared $271 billion in net profit in 2021, almost twice as much as in 2019. Seven of the ten richest people in the world are tech or green investors.

With prices of essential products like food going through the roof, Oxfam estimates 263 million more people will crash into extreme poverty this year, prompting Gabriela Bucher, Executive Director of Oxfam International, to warn, “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…. [The rich] have seized a shocking amount of the world’s wealth as a result of privatization and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments.”

In Canada, Oxfam estimates the wealth of billionaires has increased by 57.1 per cent since the beginning of the pandemic in March 2020. The 41 richest Canadian billionaires have amassed as much social wealth as that held by 40 per cent of Canadians.

Oxfam’s new research reveals “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 world’s largest energy companies (BP, Shell, TotalEnergies, Exxon and Chevron) are together making $2,600 profit every second, and there are now 62 new food billionaires.

“From Sri Lanka to Sudan, record-high global food prices are sparking social and political upheaval. Sixty per cent 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, racialized and marginalized people.”

Additional information from the report:

“Today, 2,668 billionaires — 573 more than in 2020 — own $12.7 trillion, an increase of $3.78 trillion.

“The world’s 10 richest men own more wealth than the bottom 40 per cent of humanity, 3.1 billion people.

“The richest 20 billionaires are worth more than the entire GDP of Sub-Saharan Africa.

“The super-rich have stashed nearly $8 trillion in tax havens.

“With commodity prices skyrocketing, 263 million more people will crash into extreme poverty this year. The World Bank defines extreme poverty as living on less than $1.90 per day. One person is likely dying of hunger every 48 seconds in drought-ravaged Ethiopia, Kenya and Somalia, according to estimates by Oxfam and Save the Children.”

For the complete report click here.

Workers’ Forum, posted June 16, 2022.