Global Inequality Rises: How new Billionaires create poverty to get rich?

During the pandemic a new billionaire was created every 30 hours; for each of them, at almost the same rate, a million people could fall into extreme poverty in 2022.

New billionaires created every 30 hours

The report, called "Profiting from pain", was released within the context of the Davos Forum in Switzerland, which brings together world leaders, billionaires and heads of state. "The pandemic and now sharp rises in food and energy prices have simply been a bonanza for them. Meanwhile, decades of progress in fighting extreme poverty are now receding and millions of people face impossible increases in the cost of simply staying alive," said Gabriela Bucher, Executive Director of OXFAM International.

The figures revealed to show that so far in the pandemic there have been 573 new billionaires and it is expected that by the end of 2022, 263 million people will enter extreme poverty. This means that every 30 hours there is a new millionaire and every 33 hours there is an additional 1 million people in extreme poverty.

But this is not the only indicator that shows that the pandemic has favoured the great rich, while the rest of the planet falls into poverty. According to OXFAM, so far in the last 24 months of the pandemic, the wealth of the world's richest people has increased more than it did in the 23 years prior to the start of COVID-19. Today the combined wealth of the planet's billionaires is equivalent to 13.9% of world GDP, 4.4% more than in 2000.

Cost of essential goods rises

At the time of publishing the report, the Human Rights group said that as the cost of essential goods rises at its fastest rate in decades; billionaires in the food and energy sectors are increasing their fortunes by $1 billion every two days.

According to the organization, the wealth of billionaires increased more in the first 24 months of the pandemic than in 23 years combined. The total wealth of the world's billionaires is now equal to 13.9% of the world GDP.

Oxfam's new study also reveals that companies in the energy, food and pharmaceutical sectors are making record profits; despite the fact that the wages of working people have barely increased and they have to face the biggest rise in prices in decades, in the midst of the COVID-19 pandemic.

The fortunes of billionaires in the food and energy sectors have increased by $453 billion in the last two years, which is equivalent to $1 billion every two days. Five of the major energy companies (BP, Shell, TotalEnergies, Exxon, and Chevron) collectively pocket $2,600 in profits every second. For its part, there are 62 new billionaires in the food sector.

Pain and suffering

“These extremely wealthy and powerful people benefit from pain and suffering. It is something inconceivable. Some have become rich by denying access to vaccines to billions of people. Others, by taking advantage of rising food and energy prices. They dole out huge bonuses and dividends while lowering your tax bill as much as possible. This rise in wealth and poverty are two sides of the same coin, and the clearest proof that our economic system is working exactly the way the rich and powerful want it to," says Gabriela Bucher, Executive Director of Oxfam International.

Put an end to this crisis encouraged by the maximization of profits, introducing a temporary tax of 90% on the excessive and extraordinary profits of large corporations that allow capturing the profits "fallen from the sky" or as they call it in Argentina, Unexpected Income, in all industries and sectors. Oxfam estimates that such a tax on 32 corporations would have generated an additional $104 billion in revenue in 2020 alone.

An annual wealth tax for millionaires of 2% and 5% for billionaires could generate $2.52 trillion a year, enough to lift 2.3 billion people out of poverty; manufacture enough vaccines for the world and provide universal health care and social protection for everyone living in low- and lower-middle-income countries.

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