Amid the raging novel coronavirus pandemic, another global threat has become more virulent, and in a recent report, Oxfam gave it a name: The Inequality Virus. Extreme economic and racial inequality has grown exponentially worse since the emergence of COVID-19, the global charitable organization says, and business, along with government and the rest of society, face “a small but shrinking window of opportunity to create a just economy after COVID-19.”
Published on the opening day of the World Economic Forum’s (WEF) virtual Davos Agenda, the report laid out the yawning gap between wealthy and poor in stark terms. The 1,000 richest people on the planet recouped their COVID-19 losses within just nine months, Oxfam said, but it could take more than a decade to for the world’s poorest to recover from the economic impacts of the pandemic.
COVID-19 has the potential to increase economic inequality in almost every country at once, the first time this has happened since records began over a century ago, the report showed. “Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly White male, billionaires to bounce back,” according to Oxfam.
The organization was not alone in its sober assessment. A global survey of 295 economists from 79 countries, commissioned by Oxfam, reveals that 87 percent of respondents, including Jeffrey Sachs, Jayati Ghosh and Gabriel Zucman, expect an “increase” or a “major increase” in income inequality in their country as a result of the pandemic.
While history will remember this pandemic for taking over two million lives worldwide to date, it will also be a marker of hundreds of millions of people being pushed into poverty, with an estimated doubling of food insecurity, as TriplePundit has reported.
In Oxfam’s assessment, the recession is over for the richest. It points out that the world’s ten richest men have seen their combined wealth increase by half a trillion dollars since the pandemic began, which, as they point out, is more than enough to pay for a COVID-19 vaccine for everyone and ensure no one is pushed into poverty by the pandemic.
But in reality, the pandemic has led to the worst job crisis in over 90 years, with hundreds of millions of people now underemployed or out of work. Women are hardest hit, as they make up roughly 70 percent of the global health and social care workforce - essential jobs but often poorly paid that put them at greater risk from COVID-19. Women accounted for 100 percent of the 140,000 jobs lost in December in the U.S., the National Women’s Law Center reported.
The inequality falls across racial lines as well, according to Oxfam’s report. Afro-descendants in Brazil are 40 percent more likely to die of COVID-19 than White people, while nearly 22,000 Black and Hispanic people in the U.S. would still be alive if they experienced the same COVID-19 mortality rates as their White counterparts. Infection and mortality rates are higher in poorer areas of countries such as France, India, and Spain while England’s poorest regions experience mortality rates double that of the richest areas.
“Fairer Economies” is one of the seven key themes at Davos 2021, and WEF has said addressing inequality is key to a rapid economic recovery from COVID-19.
In a press conference announcing the release of the report, Oxfam Executive Director Gabriella Boucher called on governments and business to “measure what matters” if they are serious about creating a world that is profoundly more equal. And that leading metric should not be the prevailing Gross Domestic Product (GDP), she added.
“GDP is an obsession in economic growth,” she said. “What does it mean really? One country may be growing at the same rate as another but if it is much more unequal, all that growth is going into the hands of a very few people. In another country, if the wealth is very distributed, actually more people are benefitting.”
She pleaded with leaders to focus on metrics for well-being and sustainability, meaning that “to measure things that we really want to impact, and then introduce policies that help us achieve those goals.”
This could begin with the coronavirus marking a turning point in the taxation of the richest individuals and big corporations, Oxfam suggests in its report, noting that a temporary tax on excess profits made by the 32 global corporations that have gained the most during the pandemic could have raised $104 billion in 2020. This, it added, is enough to provide unemployment benefits for all workers and financial support for all children and elderly people in low- and middle-income countries.
At the press conference for the report launch, Rebecca Marmot, Chief Sustainability Officer for Unilever, acknowledged that “There are key structural and systemic inequalities in the world that have sadly been further accentuated by COVID. The role of the private sector is really clear.
We need to reshape society and economy so there is a new model that brings longer term prosperity for everybody, a new normal. Unilever looks at how companies can address inequity right across their full value chain in a collaborative way.”
The Great Reset is the theme of Davos this year and the business community seems to waking up to the reality that returning to the status quo after the pandemic and ignoring endemic challenges like racial inequality could expose some companies as laggards.
Unilever is among the members of the Partnering for Racial Justice in Business initiative announced at Davos this week, a global coalition of organizations and their C-suite leaders who say they are committed to leveraging their individual and collective power to build equitable and just workplaces for professionals with under-represented racial and ethnic identities.
Last week Unilever committed to a range of actions with the aim to build a more inclusive and equitable society. It pledged that everyone who directly provided goods and services to the company would earn at least a living wage or income by 2030; that it would spend 2 billion euros annually with suppliers owned and managed by people from under-represented groups by 2025, and it would equip 10 million young people with essential skills to prepare them for job opportunities by 2030.
It remains to be seen if more companies take Unilever’s lead and back a vague pledge to address inequality with concrete measures. But if they don’t, NGOs like Oxfam won’t hesitate to call them out on it.
Image credit: Ehimetalor Akhere Unuabona/Unsplash
Based in southwest Florida, Amy has written about sustainability and the Triple Bottom Line for over 20 years, specializing in sustainability reporting, policy papers and research reports for multinational clients in pharmaceuticals, consumer goods, ICT, tourism and other sectors. She also writes for Ethical Corporation and is a contributor to Creating a Culture of Integrity: Business Ethics for the 21st Century. Connect with Amy on LinkedIn.