Pandemic worsens income inequality

A Billionaire Bonanza report says the following: “The surge in billionaire wealth during the global pandemic underscores the grotesque nature of unequal sacrifice. While millions risk their lives and livelihoods as first responders and frontline workers, these billionaires benefit from an economy and tax system that is wired to funnel wealth to the top.”

The pandemic will definitely increase the rate of income inequality all over the world. A report by the Institute for Policy Studies claims that US billionaires added almost half a trillion dollars to their collective wealth during the past ten weeks. US billionaires were worth a collective $3.439 trillion as of May 28, up $485 billion from March 18. Jeff Bezos, founder and chief executive of Amazon and Mark Zuckerberg, Facebook chief executive were the biggest winners and have seen their combined wealth increase over $63 billion since March 18, according to the same report. Between March 18 and May 28, the US added 16 more billionaires.

During the same period, in the US more than 40 million people have filed for unemployment benefits over ten weeks as of the week ending May 23.

I saw an earlier article dated April which was about nine Chinese billionaires who were getting rich during the pandemic. Rupert Hooggewerf, a researcher, said: “Whilst the virus has created a surge in demand around the world for medical equipment manufacturers, lockdown has created a boom in videoconferencing for business and distance learning for children, as well as surprisingly Chinese pork producers.”

Eric Yuan Zheng, founder and CEO of videoconferencing platform Zoom Video Communications, was the overall top gainer during the pandemic among the Chinese. His wealth rose from $3.5 billion to $8 billion. The number of daily users has leapt from 10 million to more than 200 million.

Another gainer was Mindray, a company specializing in ventilators and medical devices. The most surprising story were the owners of Chinese pork giant whose wealth increased from $22 billion to $25 billion in just two months. As China’s pork industry was ravaged by the African swine fever and production volumes dwindled, pork prices skyrocketed and enriched those who could retain healthy animals.

The story is the same in other countries. While the overwhelming majority suffered during the lockdowns, a tiny minority got richer.

The recent SWS survey was very revealing to me. It reported that 83 percent of Filipinos believe their quality of life got worse in the past 12 months. This is the period that included the mandatory community quarantine and people were unable to go to work and most income earners were cut off from their sources of livelihood.

During the same period, 10 percent of Filipinos said their life was the same and 6 percent said their life got better. It is not hard to figure out who were the 83 percent whose lives got worst. I am very curious as to the 6 percent of Filipinos who said their lives got better. Unless they measure their quality of life in spiritual terms, there is a small percentage whose wealth were so much, they did not feel the effect of a lockdown. There were also possibly people who found ways of enriching themselves during the lockdown. Breaking the previous record of 9 percent posted in July 1985, this was less than a year before February 1986, the date of the EDSA revolution.

The SWS survey had another interesting finding. The 6 percent who said their life got better is a new all time low.

The issue of income inequality is a topic I have written about several times in the past. The figures are alarming and depressing.

An OXFAM report in 2018 said that the wealth gap continues to widen with 82 percent of global wealth going to the wealthiest one percent. The 2019 OXFAM report said that the poorest half of the human population has been losing wealth at the same time the number of billionaires continues to increase.

The same OXFAM report in 2016 said that the 62 wealthiest individuals in the world have as much wealth as the poorer half of the entire global population. There are many other statistics that show the wealth gap in the world today.

There are two other reports that are very disturbing. A 2017 report noted that rising inequality is even suppressing wages as businesses focus more on delivering higher returns to wealthy owners and executives.

This rise in income inequality is the primary cause for the rise of populism which is basically a revolt against elitism. Even some of our intellectuals have fallen for the siren song that removing oligarchs is the ultimate answer – that it does not matter what system will take its place. Even communism resulted in some form of elitism eventually.

Removing oligarchs will just result in a new group of oligarchs taking over. The most interesting ideology intended to replace capitalism and populism is democratic socialism which is now gaining a following in the United States. Russia and China have lost their revolutionary fervor and are controlled by capitalists and multi billionaires.

In the United States this democratic socialist movement is now being advocated by Bernie Sanders and Elizabeth Warren. Their most outspoken advocates are a group of politicians led by the fiery Congresswoman A.O. Cortez.

Democratic socialists believe that both the economy and society should be run democratically to meet public needs, not just to make profits for a few. The goal is to achieve a more just society through greater economic and social democracy so that ordinary citizens can participate in the many decisions that affect their lives.

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