According to the World Bank definition, anyone who has to live on a few dollars a day is poor. Before the corona pandemic broke out almost two years ago, there were already around three billion women, men and children. In the meantime, another 160 million people have joined – while the ten richest people have doubled their wealth during this time. These are the results of this year’s inequality study by the development organization Oxfam. But as much as the numbers are worth considering, there is criticism of the design of the paper this time, which of course focuses heavily on the virus epidemic this time.
People of all income groups have suffered losses as a result of the pandemic. However, with different results: Industrialized countries like Germany and the people there experienced an economic recovery last year. In contrast, the poorest 20 percent of the world’s population lost the most income, according to statistics compiled by Oxfam. The reason for this is easy to explain: most of them live in low- and middle-income countries where economic growth has not recovered from the impact of the pandemic for a long time. With existential consequences: At least 15,000 people die every day because they do not have adequate medical care.
Another result: women in particular are feeling the economic effects of the corona virus. According to the International Labor Agency, as many men were employed last year as before the pandemic, 13 million fewer women were employed than two years ago. It is estimated that in 2020 women worldwide will have at least Lost $800 billion in revenue. This means that the goal of women earning as much as men is getting further and further away.
According to Oxfam, the pandemic will leave an additional 20 million girls in poorer countries out of school; ten million more than before are threatened by child marriage. Many of them become pregnant unplanned and too early and also no longer attend school or do any training.
Oxfam compares this to the richest people on the planet. According to the magazine forbes the combined wealth of all 2,755 billionaires worldwide has increased by five trillion euros during the pandemic. An increase in money at a speed that has never been seen before: while global wealth has only increased by one percent, the richest 55,000 people have increased their wealth by 14 percent.
“For billionaires, the pandemic is like a gold rush,” Oxfam said
“For billionaires, the pandemic is like a gold rush,” laments poverty expert Manuel Schmitt from Oxfam. “Governments have pumped billions into the economy, but much of it has gone to people who benefit most from rising stock prices.”
As a consequence, Oxfam is calling for corporations and the rich to be held more accountable: a one-off levy on very large assets and a wealth tax are needed. In addition, tax havens would have to be closed and the global minimum tax for corporations would have to be set higher than planned: namely at 20 to 25 percent instead of 15 percent.
Andreas Peichl from the Munich Ifo Institute has criticized the method of the annual Oxfam study in the past. It is essentially based on the “Global Wealth Report” from Bank Credit Suisse and finds a linear increase in wealth inequality, although there is no or only outdated data for many countries.
This time, Oxfam only uses the Credit Suisse study to state that the ten richest people in the world own more than the poorest 40 percent of the world’s population. But because assumptions are made for this group, the comparison is shaky, according to economist Peichl. In addition, data from the World Bank would be misinterpreted: in truth, they show that there were also income losses in rich countries. “Ultimately, Oxfam decided not to find out anything themselves, but instead selectively cites results in such a way that the politically desired message is conveyed,” criticizes Peichl, head of the Ifo Center for Macroeconomics.
Beyond these criticisms, however, many scholars are finding that the pandemic has actually increased global inequality. The World Bank, for example, calculates that the richest 20 percent of the world’s population lost almost as much income in 2020 as the poorest 20 percent. But while the rich probably made up about half of their losses the following year, the poorest would have another five percent lost. However, according to the World Bank, this is a new development: Before the pandemic, there was a rapprochement between poorer and richer countries.
Oxfam is also critical of the distribution of the corona vaccine: According to the World Health Organization (WHO), more than 80 percent of the vaccines went to the rich G20 countries, but only less than one percent to countries with low income. For Oxfam, this is also due to the fact that the manufacturers are primarily concerned with profits and want to conclude lucrative contracts with the rich countries.
Over 100 low- and middle-income countries per capita have been trying to temporarily suspend patent protection for Covid-19 vaccines at the World Trade Organization for over a year. If the rules to protect intellectual property were waived, more vaccines could be produced for everyone, the argument goes. The governments of some industrialized countries have been blocking the suspension of patent protection for months because they fear disadvantages for the development of new vaccines, for example.