News & Media

Pandemic Exposes the Obscenity of our Economy: 3 Ways We Got Here and 4 Ways We Can Get Back on Track

September 10, 2020

Released today, Oxfam’s report – Power, Profits and the Pandemic – reveals how global corporate behaviour has not only made the economic impacts of the coronavirus pandemic worse, but has also shielded many of these corporations from the economic fallout felt by the rest of us. Throughout the disaster, they have continued to profit and pass these gains on to their mostly wealthy shareholders.

Oxfam found that 32 of the world’s most profitable corporations are together expected to rake in nearly NZ$165 billion more in 2020 than the average of the four previous years. These corporations are household names including Visa, Procter & Gamble, Nestle, Johnson & Johnson, Facebook, Google, Microsoft, and Apple.

This isn’t right. How have we managed to build a global economy that puts more and more wealth in the control of a handful of people, while billions of other people suffer? As of this writing, more than 800,000 people have died from Covid-19. Approximately 400 million people, mostly women, have lost their jobs, which impacts entire families. Some estimates have up to 500 million people being pushed into extreme poverty while the pandemic rages on. Meanwhile, the 25 wealthiest billionaires – some of the largest shareholders in the above-mentioned corporations – have increased their wealth by a staggering NZ$340 billion between mid-March and late-May alone.

How did we get here?

1) Corporations made trillions for the few, almost nothing for the many.

Between 2010 and 2019, the companies listed on the S&P 500 Index paid a total of NZ$13.7 trillion to their shareholders – approximately 90% of their profits over that time. While these corporations could have been investing in the well-being of their workers and climate-friendly technologies, they were channelling the vast majority of their profits back into the hands of a small number of already wealthy individuals. If they had been investing more in their businesses, they would have been more resilient in the face of this crisis. They would have had cash on hand to protect their workers, prevent lay-offs, and avoid costly public bail-outs when the coronavirus pandemic hit.

2) Governments have helped, corporations have not.

The pandemic has highlighted the crucial role our governments play in providing for all people, especially in times of crisis. Yet, many of the largest global corporations have done very little to help. They stand to make NZ$165 billion more during 2020 than in the past four years, and some of their largest shareholders increased their collective wealth by an unfathomable NZ$340 billion during the height of the pandemic. Despite this windfall, these companies’ donations to Covid-19 relief have amounted to less than 0.5% of their 2019 profits. In stark contrast, 94% of their 2020 profits have gone back to their already wealthy shareholders.

3) Corporations prioritised their profits over their own people.

Oxfam has found that more than 400 corporations have continued to make shareholder pay-outs and executive compensation despite laying-off workers and receiving government bail-outs. These companies have shifted costs and risks down their supply chains, impacting workers in vulnerable situations.

This situation is not right

It is the result of a broken economy that works for the few, not the many and puts the wealth of a small number of people before the well-being of our planet and billions of people across the world. But we created this economy — we can fix it. We can reprogramme the economy to put people and the planet at the centre, protect workers in the most vulnerable situations, share profits fairly, and ground it in democracy. The way to do this is by focusing on the four Ps: purpose, people, profits and power.

1) Purpose

We should re-examine the purpose of corporations. A corporation’s ‘reason for existence’ is a policy choice, not an inevitability. Corporations should be redefined to ensure that they exist not only to compensate shareholders, but also to care for workers, consumers, and their communities. The objectives of corporations and director’s duties should include non-financial aims, such as improving social and environmental conditions.

2) People

We should put people at the centre of business models, and insist that corporations invest in decent jobs, protect and promote their workers’ human rights, and address human rights risks, and support efforts for universal social protection.

3) Profits

We should ensure that all stakeholders get a fair share of the profits that corporations create. For example, dividends paid out to shareholders should be capped, and only paid out after corporations are paying a living wage to all their workers and investing in achieving carbon neutrality. These measures should also be extended through corporations’ supply chains, which could have a massive impact on people across the entire world.

4) Power

We should change the rules that currently allow global corporations and their shareholders to have vast amounts of power to protect their own interests. This is possible through increased transparency, and more inclusive and equitable governance structures. Governments should require corporations to limit CEO-to-worker wage gaps, disclose human rights risks, enforce human rights due diligence, and publish corporate carbon footprints. Collective bargaining and robust grievance mechanisms should be enforced. And corporations should prioritise suppliers that give greater voice, power and value to workers and farmers.

We can fix this

As a first step, we propose a World War II-style Covid-19 Pandemic Profits Tax to make sure these corporations do their bit to help us all during this global disaster. Oxfam estimates that the excess profits of these 32 global corporations could raise an estimated NZ$157 billion — enough to pay for Covid-19 testing and vaccines for every single individual on the planet. After that, there would still be plenty left over to invest in supporting small and medium-sized enterprises, protecting workers, and providing robust health services for all.

The coronavirus pandemic has shown us how connected we are as a global human family. Global corporations have grown and benefitted from these connections for centuries, but they have not contributed to the global public good in the way that they should. In fact, in many cases, they have done harm. The excess profits the largest corporations are making through a time of great suffering for millions of people across the world exposes the obscenity of the way our global economy has been built. We need to fix this now so that all people, everywhere, can enjoy the basic dignities of life, on a planet that thrives.

To read the report in full click here

Pandemic profits for companies soar by billions more as poorest pay price – Oxfam

September 10, 2020

Workers producing personal protective equipment (PPE) for health professionals at a garment factory of Urmi Group in Dhaka on March 31, 2020. Credit: Sk Hasan Ali

Some corporations are cashing in on Covid-19 on behalf of the wealthiest

Thirty-two of the world’s largest companies stand to see their profits jump by USD$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 today.

Power, Profits and the Pandemic shows how during the global pandemic corporations across the globe have put profits before workers’ safety, pushed costs and risks down the supply chain, and used their political influence to shape policy responses.

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 Labour Organisation estimates that more than 430 million small enterprises are at risk.

Meanwhile, the 25 richest billionaires increased their wealth by a staggering USD$255 billion during the global crisis. Jeff Bezos could personally pay each of Amazon’s 876,000 employees a one-time USD$105,000 bonus today and still be as wealthy as he was at the beginning of the pandemic.

Oxfam New Zealand Communications and Advocacy Director Joanna Spratt said: “The pandemic has laid bare what we already knew to be true – our global economy is broken. With millions out of work and governments struggling to effectively respond to the pandemic, companies earning exorbitant profits for the already wealthy and well-connected will no longer suffice.

“Covid-19 has been tragic for the many but good for a privileged few. Corporations have exacerbated the economic impacts of the pandemic by funnelling profits to shareholders instead of investing in better jobs and climate-friendly technology, paying their fair share of taxes, and prioritising profits over people,” Spratt said.

Oxfam is calling for a response to the immediate crisis that prioritises 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.

“These outrageous and outsized gains should be taxed to level the playing field between companies and raise much needed funding for Covid relief and recovery,” said Spratt.

For perspective, redeploying the excess pandemic profits of just 32 of the most profitable corporations using this tax could pay for Covid-19 testing and vaccines for everyone on the planet, plus USD$33bn more to invest in building a 21st century frontline healthcare workforce.

“This was a popular and effective tool for many allied countries during World War II, as an excess or pandemic profits tax is designed to tax the portion of super profits that large companies derive not from hard work, but from an external event the company had no hand in making.”

Long-term, Oxfam is asking policymakers and corporations to re-balance corporate purpose, profits and power away from exclusively benefiting executives and shareholders towards workers, suppliers, consumers and communities.

“Oxfam is calling for a reprogramming of the faulty global economy. Governments must enact corporate reform to ensure every worker is paid a living wage, has a safe place to work and a voice in the workplace before a single dividend is paid to shareholders. Corporations must pay their fair share of tax and policy makers must rein in corporate power to stop them from rigging the rules.”

Spratt said our broken economic model has allowed corporations to exploit the system and further deepen existing inequalities.

“What this situation shows us like never before is how we’ve built a global economic system that does not protect people or the planet, but funnels ever-increasing amounts of wealth to a small number of people – mostly white men in rich nations – who already have more than they need.

“At this point, we have no choice but to overhaul the rules that govern this broken economic model. A system that allows corporates to get away with such obscene imbalances of power and money should no longer be tolerated.

“The solution starts and ends with an economic model that puts people at the centre, protects the most vulnerable, shares profits equitably, and is grounded in democracy. It starts with taxing excess profits made during the pandemic by a few for the public good.”

Spratt said: “We are at a critical juncture. We have a choice between returning to ‘business as usual’ or learning from this moment to design a fairer and more sustainable economy.”

“Unless we change course, economic inequality will increase and the divisions that hurt us all will become even more entrenched.”

-ends-

For more information or to arrange an interview please contact:
Kelsey-Rae Taylor | [email protected] | +64 21 298 9854

Notes to editors:

Power, Profits and the Pandemic is available here

All figures in USD
For perspective, redeploying the excess pandemic profits of just 32 super-profitable corporations using this tax could pay for COVID-19 testing and vaccines for everyone on the planet, plus USD$33bn more to invest in building a 21st century frontline healthcare workforce.
The 32 companies expected to make additional profits of USD$109bn in 2020 are listed in the table below. The table lists annual average profits and dividend pay-outs for the period 2016-2019, and 2020.
Jeff Bezos is the founder and owner of Amazon. Amazon’s market capitalization is over USD$1.5tn[1] and Jeff Bezos is now the richest man on earth worth around USD200bn.[2] His wealth has increased with USD$92 billion in only five months, between 18 March and 20 August 2020. Bezos could have paid each of Amazon’s 876,000 employees a USD$105,000 bonus and would still be as wealthy as he was at the onset of the pandemic.[3] Invested over 25 years at 6% interest rate this bonus would increase to USD$450,000 in retirement savings for each employee.

[1] P.R. La Monica. (2020, July 10). Amazon, Apple and Microsoft race to $2 trillion. CNN. https://www.cnn.com/2020/07/10/investing/amazon-apple-microsoft-market-value/index.html
[2] Forbes. (2020, August 26). Jeff Bezos Becomes The First Person Ever Worth $200 Billion. https://www.forbes.com/sites/jonathanponciano/2020/08/26/worlds-richest-billionaire-jeff-bezos-first-200-billion/#64e574b44db7
[3] https://www.forbes.com/profile/jeff-bezos/#7cb1a86a1b23; https://www.businessinsider.com/jeff-bezos-net-worth-life-spending-2018-8; https://www.geekwire.com/2020/amazon-tops-935k-employees-week-pandemic-driven-hiring-spree-continues/

Power, Profits and the Pandemic Report

September 10, 2020

The worsening inequality crisis triggered by COVID-19 is fuelled by an economic model that has allowed some of the world’s largest corporations to funnel billions of dollars in profits to shareholders giving yet another windfall to the world’s top billionaires, a small group of mostly white men. At the same time, it has left low wage workers and women to pay the price of the pandemic without social or financial protection. Since the onset of the pandemic, large corporations have put profits before workers’ safety, pushed costs down the supply chain and used their political influence to shape policy responses. COVID-19 should be the catalyst for radically reining in corporate power, restructuring business models with purpose and rewarding all those that work with profits, creating an economy for all.

Click here to read the full report.

Investigation into EU’s role needed after fire destroys infamous Moria refugee camp, say GCR and Oxfam

September 10, 2020

A fire has destroyed most of the notorious refugee camp of Moria in Lesbos, Greece. The EU-sponsored ‘hotspot’ camp hosted more than 12,000 people, despite an official capacity of less than 3,000.

Reacting to the news, Spyros-Vlad Oikonomou, Advocacy Officer at the Greek Council for Refugees, said:

“This fully preventable tragedy should trigger a U-turn in the EU’s and Greece’ response to the arrival of people seeking asylum in Europe, which has clearly failed.

“The announced transfer of all unaccompanied children in Moria to the Greek mainland is a first important step to alleviating this humanitarian crisis. EU governments must now immediately support Greece in moving all people seeking asylum from the islands’ refugee camps to safe places across Europe.”

Oxfam’s Europe Migration Campaign Manager Evelien van Roemburg, said:

“The ongoing humanitarian tragedy that led to this devastating fire is the consequence of years of a misguided response from the EU and its member states to the arrival of people fleeing conflict and persecution. Without ignoring the responsibility of the Greek state, the European Parliament must launch an investigation into the policies and practices of the EU and its member states which have led to the complete mismanagement of the EU-sponsored hotspots on the Greek islands.

Notes to editors:

Spokespeople are available in Athens, Brussels and the Netherlands.
The facility for unaccompanied children in Moria camp has been completely destroyed. The European Commission announced this morning that the EU would finance the immediate transfer and accommodation on the mainland of the 400 unaccompanied children that still remain on the island.
More than 6,000 people have become homeless, as the fires destroyed both parts of the official camp and the tents in the over-spill areas surrounding the camp.

BEIRUT: One month since the blast and thousands can’t afford a front door

September 4, 2020

One month since the massive blast in Beirut, tens of thousands of vulnerable people are unable to rebuild their homes, with a single front door costing two months’ worth of a minimum-wage salary, warned Oxfam today.

Longstanding inequality, massive inflation and COVID-19 have compounded this humanitarian disaster for tens of thousands, making it almost impossible for them to recover.

“Huge inflation has meant the cost of basic materials needed to rebuild homes and businesses is out of reach for thousands of people who were struggling to get by even before the blast. While the minimum wage is just under $450 a month, the cost of replacing one window is now nearly $500 and a door up to $1000. These families need urgent assistance to recover from this disaster and rebuild their lives,” said Oxfam’s Policy Lead in Lebanon, Bachir Ayoub.

The blast came at time when thousands of people where already on the brink. An estimated 50 per cent of the population was living under the poverty line, the Lira’s value had dropped 80% since October, migrant workers were being abandoned and forced out on the streets, cash was almost impossible to access, and restrictive measures to contain the pandemic prevented casual workers from getting to their jobs.

“Following the blast, an estimated additional 70,000 workers are now jobless. Half of all wholesale, retail and hospitality establishments near the blast site have been destroyed.

“In the most affected areas, the majority of people are low and middle- income workers who earn the minimum wage or less. Most of them have lost their jobs in the port or the businesses in the devastated areas. Many people are unable to put food on the table, let alone repair their houses,” added Ayoub.

As coronavirus cases surge, the cost of a single test is $100 and well out of reach for most people.

Oxfam is working with Lebanese organisations to ensure that Beirut’s most marginalised people are not left behind and instead have the support they need to recover from the blast.

Oxfam’s joint response with partners will focus on supporting local leadership, and will prioritise reaching people with disabilities, the elderly, women and girls who are now at greater risk of violence because of unsafe houses, migrant workers, refugees and the LGBTQ+ community.

Oxfam’s partner-led response is providing over 9000 people with support ranging from emergency cash and food, medical services, mental health support, legal assistance and help to repair and rebuild homes and businesses.

But there is still too much that needs to be done for Beirut to begin to recover. Celine El Kik, a social worker from Oxfam partner KAFA says the mental scars of the blast will linger long after the physical damage has been repaired. “The port explosion affected all of us, but especially women who were already vulnerable. We’re providing social and legal support, as well as cash assistance for people who lost their jobs or their houses.”

Oxfam calls for fair and just distribution of aid to provide critical support to these vulnerable communities and people who will be unable to cope and rebuild their lives without targeted and transparent aid.

“We are worried that the growing inequality and suffering we were already seeing in some of Lebanon’s most vulnerable communities – like refugees and migrant workers, the elderly and LGBTQI+ community – will only get worse, and they will fall even farther behind,” added Ayoub.

NOTES TO EDITORS.

· The Minimum wage in Lebanon is set by the Government at 675,000 LBP which was equivalent to USD$450 this time last year

· One-meter square of average quality (6mm) glass cost 16$ before the explosion. After August 4th, and with the increasing prices in the market, the Ministry of Economy specified the prices of one-meter square of glass with an aluminum frame at USD$500

· The average market price of a door with quality locks is currently USD$700-1000

· To respond to the impact of the blast Oxfam is working with 11 partners to deliver emergency support including distribution of food parcels and the provision of emergency and temporary cash assistance, household rehabilitation, legal assistance and consultation, psycho-social support and medication. The services are provided to families and individuals in the affected areas including women, girls, LGBTQ+ community members, people with disabilities and migrant workers.

· Our partners under the Beirut Response are Lebanese Centre for Human Rights (CLDH), KAFA, Anti-Racism Movement (ARM), Basmeh and Zeitooneh (B&Z), Lebanese Physically Handicapped Union (LPHU), Lebanese observatory for workers and employees’ rights (LOWER), HELEM, Legal Agenda (LA), Mada Association, Arc En Ciel and People’s Solidarity, hosted by a partner organisation called Social Media Exchange (SMEXs)

· Since March 2020, Oxfam in Lebanon has been responding to the COVID-19 pandemic to address the needs of vulnerable communities in the Bekaa Valley. Along with local partners, Oxfam continues to distribute water, soap and disinfection kits to refugees in the informal tented settlements.

· Oxfam in Lebanon works on active citizenship and good governance, economic justice and humanitarian programmes.

· Oxfam has been working in Lebanon since 1993 providing humanitarian assistance to vulnerable people affected by conflict, and promoting economic development, good governance at a local and national level, and women’s rights through work with local partners. Oxfam also works with local partners to contribute to the protection and empowerment of marginalized women and men.

· Lebanon hosts the largest number of refugees per capita in the world: 1 out of every 4 people. In response to the Syria crisis, Oxfam has been providing water and sanitation, and emergency cash assistance for refugees and poor Lebanese, helping refugees with legal protection issues, and supporting small businesses and private-sector job creation. Oxfam is currently working in North Lebanon, the Bekaa Valley, South Lebanon, and in Palestinian camps and gatherings.

For more information or to arrange an interview contact:
Kelsey-Rae Taylor | [email protected] | +64 21 298 9854

Gaza hospitals brace for surging COVID-19 cases amidst bombing, and severe electricity shortages, warns Oxfam

August 28, 2020

Hospitals and Palestinians in Gaza, one of the most densely populated places on the planet, are bracing for the Coronavirus pandemic. Only three to four hours of electricity per day, as entry of fuel has been restricted by Israel, has forced Gaza’s single electricity plant to shut down, compounding the risk of infection for two million Palestinians, Oxfam warned today.

At the same time, the blockaded strip, now under complete lockdown, is experiencing continuous bombardment from Israeli forces and likely to see an exponential increase in virus transmission.

“The gravity of the pandemic finally making its way into communities in Gaza cannot be underestimated. There are only 97 intensive care unit beds and ventilators in Gaza. The lack of fuel for back-up generators means hospitals aren’t able to effectively operate intensive care units and properly treat COVID-19 and other patients,” said Shane Stevenson, Oxfam’s Country Director in the Occupied Palestinian Territory and Israel.

The first cases of COVID-19 outside of quarantine centres were announced earlier this week. Overcrowding in the sealed off coastal enclave, where 5,000 people live per square kilometre, makes physical distancing impossible and rapid transmission a certainty. This puts more people at risk, especially those with pre-existing conditions.

“People’s access to clean water has already dropped from about 80 litres to 20 litres a day. This will directly affect people’s ability to protect themselves from the virus. If no more fuel is allowed in, and with the power plant no longer operating, the supply of drinking water through desalination plants could be reduced by 80%. People are forced to choose between hygiene and food,” added Stevenson.

The lockdown is pushing more of Gaza’s already extremely vulnerable families into poverty. Families are running out of food, and with the electricity shortages, they can no longer store in refrigerators. With power cuts, private water vendors are also overwhelmed with demand at a time when hygiene is crucial to keep people from contracting the virus.

Oxfam is already responding to the pandemic in Gaza and assessing new needs; providing clean water and sanitation to 270,000 people, as well as food-vouchers to help families have enough to eat. The lockdown has suspended some activities, putting more lives at risk.

“Israeli authorities must allow fuel into Gaza, so its sole electricity plant can power hospitals again so they can treat patients, and for families to access clean water to slow the spread of the virus”, added Stevenson.

Notes to the editor

As of Thursday 27^th August, there were 40 confirmed cased of COVID-19 outside of quarantine centres in Gaza, including in the densely populated Maghazi refugee camp.
More 2,200 people (arriving into Gaza and going directly into quarantine for 21 days) are in 16 quarantine centres and 178 people are in home quarantine.
Latest information about COVID-19 cases in Gaza: WHO, OCHA and Ministry of Health in Gaza
Oxfam spokespeople based in Gaza are available for interviews.
A video from our staff in Gaza: https://twitter.com/Oxfam/status/1298662001447665665