Why the Inequality Virus should be the talk of Davos this week

January 26, 2021

     By Duncan Green     

It’s Davos week again. Julie Seghers (Twitter @JulieSeghers) summarizes Oxfam’s new report.

The 2021 Davos edition is pretty unusual. For the first time, the world’s rich and powerful aren’t flying their jets to the Swiss mountains, but are instead meeting online to chart a path out of a deadly pandemic and the worst economic recession in a century.

At Oxfam, our eyes are set on one thing: making sure the fight against inequality is top of the agenda for every government on the planet.

That’s why we released the report The Inequality Virus, which shows that:

At the top, the recession was short-lived: rich people are getting richer despite the pandemic.

  • It took just nine months for the fortunes of the 1,000 richest people on Earth to return to their pre-pandemic highs. In comparison, it took billionaires 5 years to recoup their losses after the 2008 financial crisis.  
  • The world’s 10 richest billionaires – all men, unsurprisingly – have seen their wealth skyrocket by half a trillion dollars since March 2020. If you need help wrapping your head around this number, just think that if someone was to sit down and count those dollar bills, it would take them 143,000 years. This unfathomable amount of money could certainly have been put to better use:

At the bottom, it’s a very different story.

Coronavirus is making poor people poorer and is wreaking havoc on their health, education and livelihoods:

  • For the billions of people who were already struggling pre-COVID-19, the road to recovery could take more than a decade. Estimates show the virus could have pushed an additional 200 to 500 million people below the $5.50 a day poverty line in 2020.

And this year Oxfam’s report dives deeper into the racial and gender inequalities that conspire at the heart of the economy to divide our world:

  • The likelihood of contracting and dying from the virus is higher for people living in poverty, and even higher for Black or Indigenous communities. We calculated that nearly 22,000 Black and Latinx people in the US would still be alive today if their COVID-19 mortality rates were the same as White people.
  • Women, and to a higher extent women from marginalized racial and ethnic groups, are being pushed out of work. They are overrepresented in sectors and low-paid precarious professions hardest hit by the pandemic. If they were represented at the same rate as men in these sectors, over 100 million women would no longer be at risk of losing their incomes or jobs. Women are also taking up most of the unpaid care work which has gone into hyperdrive because of lockdowns.

Inequality is set to increase

The pandemic has the potential to increase inequality in almost every country at once, the first time this has happened since records began over a century ago. Preliminary studies suggest the crisis will lead to a greater economic divide, unless urgent action is taken. This view is supported by the results of an Oxfam survey of 295 economists from 79 countries:

How did things get so bad?

How did we get to a situation where a privileged few are riding out the pandemic in luxury, while most people – including those who’ve been on the frontline of the pandemic – are struggling to put food on the table and to pay their bills?

A world where the super-rich fly out on private jets to Dubai to get vaccinated first, while even health workers are dying waiting to get their shot? A world that rewards asset managers 1,400 times more than nurses?

We got here because we’ve put up with a rigged and exploitative economic system for far too long. A system that has its roots in neoliberal economics, elite capture, patriarchy and structural racism. That rewards wealth not work. That cuts taxes for the richest, and chronically underfunds public health, education and social protection systems. That allows a few super rich to thrive, in part by standing on the backs of poor people, women and marginalized racial and ethnic groups – who were already living on the edge when the pandemic hit.

The world’s 10 richest billionaires have seen their wealth skyrocket by half a trillion dollars since March 2020

The pandemic simply pushed them over that edge, and acted as a magnifying glass making the devastating impacts of this deeply unfair system clearer than ever.

Can we change course?

More inequality will lead to more poverty. But it’s also clearer than ever that inequality is not inevitable. One proof of this is found in the actions of some governments – just a few – that are doing the right kinds of things. Like South Korea (as our Commitment to Reducing Inequality Index showed) or New Zealand (focusing on inequality and setting its goal on well-being, going well beyond GDP). Two countries who’ve also been praised for their strong state intervention and leadership in response to COVID-19, New Zealand providing for example NZ$5.1 billion in wages subsidies to affected workers, and South Korea instituting universal emergency relief payments for 22 million households.

So we have a choice. We can allow our governments to let inequality grow, or we can demand they take action.

People want change. 86% of respondents to a survey conducted in 27 countries said they’d prefer to see the world change significantly and become more sustainable and equitable, rather than revert to the pre-pandemic status quo.

In history, epidemics or other major crisis have often been tipping points and catalysts for change. As Indian writer and activist Arundhati Roy puts itHistorically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different.” We can chose to shape economies that work for poor Black women, not just rich White men. A world with less billionaires and more nurses.

How can we form a more equal and just world?

The report suggests concrete steps to get there, and these are guided by a clear vision: 

  • No to austerity, which would only result in people living in poverty, women, and marginalised racial and ethnic groups paying the price for the recovery.
  • Yes to equality and to care. Yes to a People’s Vaccine and to public spending that will guarantee everyone has access to quality health, education, and social protection. Yes to a green economy that will ensure climate safety and create millions of dignified jobs. And yes to taxing rich individuals and corporations, so that the cost of building a better future is met by those most able to pay.

We’re sending this message to leaders on Davos week. But let’s be clear: people aren’t waiting for elites to take up transformative action. Brazilian social worker and human rights activist Lúcia Maria Xavier de Castro reminds us in the report that “People have the power to push for change – with Black women leading the movement – and hold governments accountable so that we can collectively create a world of justice, equality and solidarity.”

And here are some FAQs on the report

January 26, 2021
Duncan Green