Time to reign in the pandemic profiteers!

In a world that is facing a massive depression and where the equivalent of 495 million jobs have been lost and up to 1.6 billion people in informal work face destitution every day, greed still motivates the pandemic profiteers who have grown considerably wealthier.

The global economy is expected to contract 4.4 per cent this year — the sharpest contraction in modern history — throwing millions into poverty, according to the IMF. But the world’s billionaires have grown wealthier compared with 2019, according to data compiled by UBS with total billionaire wealth reaching $14.2 trillion as at July.

And despite so many people and so many businesses reeling from the social and economic ruptures of the coronavirus pandemic as a second wave explodes across major economies, Swiss bankers harbouring the fortunes of the world’s super-rich along with the big tech companies report extraordinary profits. Zurich-based UBS, whose private bank operations are the world’s largest, reported its best quarterly earnings in a decade with Credit Suisse enjoying a similar windfall.

And the wealth of the major tech companies increased by a massive 41 per cent to June 30 this year. Jeff Bezos alone has raked in an additional $75 billion to see his personal wealth valued at $189 billion! Then there is the irony of healthcare billionaires raking in the dollars in a health crisis where frontline or essential care workers are paid wages on which they can barely live despite risking their lives daily for the rest of us. According to Forbes, the Healthcare Corporation of America made $822 million profit from the US Coronavirus Aid, Relief, and Economic Security Act in the first half of 2020

With more than $20 trillion (by the most conservative estimates) stashed away in tax havens by corporations and individuals, there is more than enough money in the world to tackle the health and economic consequences of the pandemic, adding great urgency to the need for reform of taxation rules globally and nationally, which to date has moved at a glacial pace.

So too must governments be held accountable for how they design stimulus and recovery packages, to avoid providing bonanzas for large corporations at public expense.

Recovery must be built around resilience. And building resilience must include reversing the decades-long trend towards less of global income going to wages. “Trickle-down” economics has actually about opening the floodgates for the ultra-rich to redistribute ever-increasing wealth to themselves with the acquiescence or connivance of governments. This pandemic has brought many wake-up calls, and one of the biggest is that governments need to re-set the economy to the benefit of people.

Among other things, that means reining in the pandemic profiteers.

There is something very wrong with this picture when the worlds people are increasingly feeling a wave of anger born of the despair of surviving on low incomes or no incomes and no or inadequate social protection.

75 per cent of people in the 2020 ITUC Global Poll said their income has stagnated or fallen behind.

The social contract has been broken by massive inequality and the failure to share wealth in past decades. This is accompanied by a collapse in formal employment when only 40 per cent of the world’s workers have a formal contract of employment and then at least a third of them are in precarious situations. And the explosion of internet-mediated work or platform business arrangements simply adds to informality.

Evolution of the labour share of income Source: IMF (2017) Drivers of Declining Labor Share of Income

Recovery must rebuild the social contract and ensure resilience against future global shocks. This means massive investment in jobs — climate-friendly jobs; universal social protection, inclusion and equality for women, an end to impunity for corporate violations of human and labour rights with mandated due diligence and fair taxation.

Tax, not austerity has to finance the recovery with an end to tax havens, a base rate for corporate tax, a new digital tax, a billionaires or wealth tax and the long-awaited financial transactions tax.

The 2008 crisis showed the promise of reform as the world’s leaders moved to support jobs and people with loud commitments to changing the rules of the financial markets but in reality for working people simply resulted in austerity with attacks on wages and social protection along with levels of employment that failed to reach pre-crisis benchmarks and fell far short of full employment and gender parity while more people continued to go to bed hungry than had been lifted out of poverty in preceding decades. And speculation is at higher levels today than it was before the impact of the pandemic!

Working people and their families demand a new social contract based on an economic model that is vastly different to the failed model of hyper globalisation that has escalated the destruction of the social contact since the 1980s. The ILO Centenary Declaration negotiated by workers, employers and governments holds the foundations for renewal. With a labour protection floor for all workers, irrespective of employment arrangement work could be formalised and insecurity reduced with the promise of fundamental rights, occupational health and safety, a minimum wage on which people can live with dignity and some control of working hours with maximum hours of work. For resilience, this must be married with universal social protection with a priority for health and income support. If these touchstones are framed with a transformative agenda for women and Just Transition for managing the impact of climate action and technology.

If our economies cannot be based on the security and hope generated by a good job with respect for rights and necessary skills with the safety of social protection and our vital public services with a focus on care irrespective of global shifts then there can only be increased despair and desperation with the attendant breakdown in societies and the further collapse in trust in democracy.

Indeed building a new social contract also means rebuilding trust in democracy. When two out of three people in the ITUC Global Poll say people like them have little influence on the global economy and the more monopoly power creates untrammelled wealth that is shared by so few the harder to effect the change that will give people hope.

Taxing the pandemic profiteers, breaking up the global monopolies of the big tech companies is vital to shared prosperity without which the world cannot build peace and security.

General Secretary of the International Trade Union Confederation. Representing the world's working people.