Thirty-two of the world’s largest companies stand to see their profits jump by $109 billion more in 2020 as the COVID-19 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 outlines how COVID-19 has made things even worse by encouraging corporations around the globe to put profits before workers’ safety, push costs and risks down the supply chain and use their political influence to shape policy responses.
“COVID-19 has been tragic for the many but good for a privileged few,” said Oxfam International Executive Director Chema Vera. “The economic crisis we are suffering because of the pandemic has been fueled by a rigged economic model. The world’s largest corporations are making billions at the expense of low wage workers and funneling profits to shareholders and billionaires – a small group of largely white men in rich nations.”
Globally, half a billion people are expected to be pushed into poverty by the economic fallout from the pandemic. 400 million jobs have already been lost and the International Labor Organization estimates that more than 430 million small enterprises are at risk. Meanwhile, the protection given to shareholders has fueled a share price boom. The top 100 stock market winners have added more than $3 trillion to their market value since the pandemic. As a result, the 25 richest billionaires have increased their wealth by staggering amounts. Jeff Bezos could personally pay each of Amazon’s 876,000 employees a one-time $105,000 bonus today and still be as wealthy as he was at the beginning of the pandemic.
The report outlines how corporations have exacerbated the economic impacts of the pandemic by funneling profits to shareholders instead of investing in better jobs and climate-friendly technology, paying their fair share of taxes, and prioritizing profits over people.
The report sets out examples including:
- Ten of the world’s largest apparel brands paid 74% of their profits (a total of $21 billion) to their shareholders in dividends and stock buybacks in 2019. This year 2.2 million workers in Bangladesh alone were affected when textile orders were cancelled. Factory shutdowns have lowered revenues in the country by an estimated $3 billion.
- In India, hundreds of tea plantation workers, many of them women, have gone unpaid as a result of the COVID-19 lockdown. At the same time, some of the largest Indian tea companies have boosted their profits or have been able to maintain profit margins by cutting costs.
- Mining operations in Peru have been kept open despite high risks of infection among their employees.Oxfam finds that many companies’ ability to cope with the economic damage wreaked by the pandemic and take care of their employees has been severely undermined by years of increased payments to shareholders; some companies having handed over amounts significantly greater than their profits.
Oxfam is calling for a response to the immediate crisis that prioritizes support for workers and small businesses. It includes establishing a COVID -19 Pandemic Profits Tax to ensure shared sacrifice and the redeployment of resources away from those cashing in on the pandemic and toward those bearing the burden.
Read the report: Power, Profits and the Pandemic.
Original source: Oxfam
