In the initial months of the pandemic, a stock market collapse saw the world’s billionaires experience massive reductions in their wealth.

Key points:

  • Worldwide, the wealth of billionaires increased by $US3.9 trillion between March 18 and December 31
  • But it could take more than a decade for the world’s poorest people to recover from the economic impacts of the pandemic, Oxfam says
  • The organisation has called on governments to invest further in public services and the richest individuals and corporations to contribute their fair share of tax

But this setback was short lived. Within nine months, the top 1,000 billionaires, mainly white men, had recovered all the wealth they had lost.

Conversely, it could take more than a decade for the world’s poorest people to recover from the economic impacts of the pandemic.

That is the upshot of Oxfam’s latest report, The Inequality Virus, which highlights how the coronavirus crisis has exacerbated inequality and deepened poverty around the world.

It found the pandemic had ushered in the worst job crisis in more than 90 years, with hundreds of millions of people now underemployed or out of work.

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The world’s 10 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 and to ensure no-one is pushed into poverty by the pandemic.

In an Australian context, 31 billionaires have seen their fortunes increase by nearly $85 billion since pandemic was declared.

The report’s release came as the World Economic Forum’s Davos Agenda meetings kicked off on Monday under the theme A Crucial Year to Rebuild Trust.

The World Economic Forum’s Davos Agenda meetings have kicked off under the theme A Crucial Year to Rebuild Trust.(Reuters: Denis Balibouse)

World’s billionaires increased wealth by $US3.9 trillion

After the global financial crisis in 2008, it took five years for billionaire wealth to return to its pre-crisis highs.

But this time around, with unprecedented support from global governments, the stock market has boomed, driving up billionaires’ wealth, even while the real economy has faced the deepest recession in a century.

Worldwide, billionaires’ wealth increased by $US3.9 trillion ($5.04 trillion) between March 18 and December 31.

Their total wealth now stands at $US11.95 trillion, which Oxfam says is equivalent to what G20 governments have spent in response to the pandemic.

Globally, women are over-represented in the sectors of the economy that have been hardest hit by the pandemic.

The report said if women were represented at the same rate as men in those sectors, 112 million women would no longer be at high risk of losing their incomes or jobs.

501 million people could be living on less than $5.50 a day

Since the beginning of the 21st century, wealth concentration at the top has steadily increased.

The total number of billionaires nearly doubled in the 10 years after the financial crisis of 2008, and between 2017 and 2018 a new billionaire was created every two days.

Such extreme inequality meant billions of people were already living on the edge when the pandemic hit.

“They did not have any resources or support to weather the economic and social storm it created,” the report said.

International bodies including the International Monetary Fund (IMF), the World Bank, and the Organisation for Economic Cooperation and Development (OECD) also fear the pandemic will further exacerbate inequality.

According to the World Bank, 501 million more people will be living on less than $5.50 a day in 2030 if governments allow inequality to increase by just two percentage points annually, and the total number of people living in poverty will be higher than it was before the virus hit.

But if governments choose to act to reduce inequality by two percentage points annually, the IMF estimates we could return to pre-crisis levels of poverty within three years, and 860 million fewer people will be living in poverty by 2030 than if it were left to increase.

The World Bank paints a grim picutre of what will happen if governments allow inequality to increase.(Supplied: Josh Estey, CARE)

The end of JobKeeper could spell chaos

In an Australian context, coronavirus wage subsidies have helped keep Australians afloat, but as they come to an end Oxfam fears many people will fall into poverty.

“We stand to witness the greatest rise in inequality since records began,” Oxfam Australia chief executive Lyn Morgain Oxfam said.

She said the JobSeeker payment had been a critical lifeline for millions of Australians thrown into unemployment.

“While the Government should be congratulated for acting quickly to implement wage subsidies and other social protection measures last year, the inappropriate and unfair reversal of the increase to JobSeeker payments is a cruel blow to the poorest Australians,” she said.

Ms Morgain called on the Federal Government to further invest in public services and low-carbon sectors. She said this could help create millions of new jobs and a sustainable social welfare safety net.

She also called on the richest individuals and corporations to contribute their fair share of tax to pay for it.

Oxfam’s report said that between 1985 and 2019, the global average statutory corporate tax rate fell from 49 per cent to 23 per cent.

The Tax Justice Network estimates countries are losing more than $US427 billion in tax each year to international corporate tax abuse and private tax evasion.