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

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.”

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