Inflation for the majority, profits for the privileged

In recent months, we’ve seen record inflation in the wake of an unprecedented pandemic, but the crisis hasn’t affected everyone the same way. Since 2020, the richest 1% of the world’s population have captured twice as much wealth as the rest of humanity, reveals a new report published by Oxfam today.

In Canada, billionaires increased their wealth by 51% between the beginning of the pandemic and November 2022. Canadians with $50 million or more alone — 0.02% of the population — control twice as much wealth as the bottom half of the population.

Oxfam releases its report, Survival of the Richest, as world elites are converging on Davos, Switzerland, for the World Economic Forum. The report shows for example that the wealth of the world’s billionaires grew by $2.7 billion per day, whereas the wages of 1.7 billion people didn’t even keep pace with inflation.

Extreme poverty increased for the first time in 25 years, with humanity headed for the biggest increase in inequality since World War II, reports Oxfam.

2022, a tale of two realities

Food prices hit a peak in 2022 as close to a tenth of the world’s population experienced hunger, says the report. In Quebec, the demand at food banks shot up 20% in one year.

As billions of people suffered, a minute minority benefited. Last year, 95 big food and energy businesses more than doubled their profits, handing over 84% ($257 billion) of the windfall to their wealthy shareholders, the Oxfam report shows. The Walton dynasty, owners of half the corporate giant Walmart, pocketed $8.5 billion last year.

Every day inequalities are increasing. For every $100 of wealth created in Canada in the last decade, the richest 1% siphoned off $34, while the poorest 50% got a mere $5 to divide amongst themselves. In ten years, the super-rich piled up close to eight times as much wealth as the bottom half the population.

Oxfam calls for better taxation of individual and corporate large fortunes, for a fair distribution of the money the rich have raked in thanks to public investment or because of the crisis.

Wealth within reach of taxation

Oxfam calculates that if Canada were to place an additional 2% wealth tax on millionaires, a 3% tax on those with over $50 million and a 5% tax on billionaires, it would collect $49.6 billion annually. That amount could be used to increase education spending by more than 50% across Canada and boost Canada’s official development assistance budget by over 800%.

Worldwide, an annual wealth tax of 5% on multimillionaires and billionaires could bring in $1.7 trillion per year. That would be enough to raise 2 billion people out of poverty.

Oxfam calls on governments to:

• Institute temporary windfall taxes on businesses and dividends to stop the richest people from getting even richer at the expense of those suffering from the crisis in their daily lives.
• Permanently increase income taxes (wage and capital) on the very rich, especially on capital gains.
• Tax the super-rich at a rate high enough to significantly reduce the number of billionaires and the size of their wealth, then redistribute that wealth more equitably. That entails new taxes on estates, wealth, real estate and net wealth.

Oxfam-Quebec is circulating a petition calling for business and the richest individuals to pay their fair share. We demand that Canada and the province of Quebec impose innovative tax justice measures to build a fairer, greener and more inclusive society. More than 38,000 people have signed the petition so far.

Notes :

• Read the full report “Survival of the Richest” and the methodology note explaining how Oxfam calculated statistics for the report.
• Data on the world’s richest people are taken from Forbes Magazine’s World’s Billionaires List.
• All amounts are given in U.S. dollars, adjusted for inflation where applicable using the U.S. consumer price index.
• According to the World Bank, extreme poverty increased in 2020 for the first time in 25 years. At the same time, extreme wealth has increased spectacularly since the beginning of the pandemic.
• The Oxfam report shows that while the richest 1% captured 54% of new global wealth over the past decade, this has accelerated to 63% in the past two years. $42 trillion of new wealth was created between December 2019 and December 2021. $26 trillion (63%) was captured by the richest 1%, while $16 trillion (37%) went to the rest of humanity.
• According to Credit Suisse, anyone who has more than $1 million in wealth is part of the world’s richest 1%.
• Billionaires have gotten $2.6 trillion richer since the beginning of the pandemic, despite a slight drop in their fortunes in 2022 following the unprecedented gains racked up in 2021. The wealth of the world’s wealthiest is rising again.
• The World Bank announced that the world has almost certainly lost its goal of ending extreme poverty by 2030 and that “global progress in reducing extreme poverty has grind[ed] to a halt” amid what the Bank says was likely to be the largest increase in global inequality and the largest setback in global poverty since WW2. The World Bank defines extreme poverty as living on less than $2.15 per day.
• Data on increased food bank demand is from the the food banks of Quebec (Banques alimentaires du Québec).
• The $6.85 poverty line was used to calculate how many people (2 billion) an annual wealth tax of up to 5% on the world’s multi-millionaires and billionaires could lift out of poverty worldwide.
• Polls and surveys consistently find majorities of the world’s population in favour of increasing taxes on the very rich.
• An early report published by Oxfamshowed that the super-rich are individually the worst offenders in the current climate crisis.