The pandemic has reached every corner of the world. It has changed the way we live. Over the past months, we have witnessed pandemic-driven lockdowns and political upheaval. But it does not stop there. Covid-19 has turned the poor into poorer and the rich into richer.
The new economy that took shape in the wake of the Covid-19 pandemic destroyed the lives, savings and small businesses of many, but this past year wasn’t a financial washout for everyone.
While the whole world was arguing on whether we will ever return to what we call “normality”, the planet’s richest people enjoyed incredible wealth gains. With major stock markets soaring high, Forbes estimated that the 2,200-plus billionaires in the world have collectively gotten $1.9 trillion richer in 2020.
The world’s billionaires are worth some 20% more in collective wealth when compared to the end of 2019. They had a smashing 2020. Many companies owned by the world’s billionaires soared in value during this pandemic.
According to Forbes, the 659 American billionaires hold roughly $4 trillion in wealth — a figure roughly double what the 165 million poorest Americans are collectively worth. 10 of these 659 American billionaires have a combined net worth of more than $1 trillion.
While U.S. tycoons grab most headlines for their increasing fortunes, Chinese billionaires have gotten the richest this year in US dollar terms. China, which imposed heavy lockdown rules after the Covid-19 outbreak began, has bounced back in stunning fashion.
It is a shocking snapshot of how the pandemic has distorted large sections of the real economy. A persistent economic inequality is growing fast, in every country.
Millions of people have been stuck in apartments or modest homes with roommates or family members while a wealthy few have been renting estates, resorts and yachts in warmer locales for family and staff to enjoy. While people waited for discounts on holiday gifts or vouchers this year, luxury watch auctions have been setting records and celebrities are being caught out on Instagram throwing lavish parties. As most recreational travel has come to halt, some members of the upper class are still moving internationally, for work or pleasure.
In a nutshell, the pandemic has made the rich, richer and the poor, poorer at a phenomenal rate according to Oxfam. New Oxfam research shows that over a third of the world’s population has had no public money to cope with the effects of the pandemic. Oxfam is calling for a Global Fund for Social Protection to avert a huge increase in global inequality and poverty, as a keystone toward a more equal and resilient post-Covid economy.
Many argue that inequality threatens to undermine healthy market competition both now and in the future as more small- and medium-sized businesses are forced to close their doors and consolidation accelerates.
This global inequality is not just between the rich and poor people. It is also between so called rich countries and those labelled as third world countries. The global economy has long been cleaved by profound disparities in wealth, education and access to vital elements like clean water, electricity and the internet. The pandemic has further widened these disparities. Covid will likely add another division that could shape economic life for years, separating countries with access to vaccines from those without.
