While Covid-19 has taken the lives of over one million people across the globe and exacerbated economic precarity for millions more, the combined wealth held by the world’s 2,189 billionaires has skyrocketed—increasing by 27.5% between April and July 2020 and reaching a record high of $10.2 trillion.
“Billionaire wealth equates to a fortune almost impossible to spend over multiple lifetimes of absolute luxury.”
—Luke Hilyard, High Pay Centre
The surge in billionaires’ wealth in the midst of a calamitous pandemic is captured in Riding the Storm: Market Turbulence Accelerates Diverging Fortunes, a report (pdf) published by Swiss bank UBS and consultancy firm PwC on Wednesday.
The report attributed the growing fortunes of billionaires—there are 31 more of them in 2020 than there were in 2017—to “the year’s V-shaped rebound in asset prices,” which benefited the rich even as middle- and low-income households continue to experience material hardship.
Authors noted that billionaires in some sectors, particularly technology and healthcare, fared better than mega-wealthy individuals in other fields, such as media, finance, natural resources, and construction.
For instance, “during 2018, 2019, and the first seven months of 2020, technology billionaires’ total wealth rose by 42.5% to $1.8 trillion,” while “healthcare billionaires’ total wealth increased by 50.3% to $658.6 billion.”
Among the class as a whole, the increase was more modest at 19.1% during the same time period. Meanwhile, “the net worth of billionaires in entertainment, financial services, materials, and real estate sectors lagged” behind their peers, “with increases of 10% or less.”
Regarding the ability of tech and healthcare billionaires “to decisively pull ahead of the pack as they increased their wealth while others fell,” the report romantically stated that Covid-19 dramatically accelerated the trend of “innovators and disruptors… reshaping the economy” and “demonstrating the value of the digital world they helped to create.”
However, The Guardian explained that the world’s billionaires increased their collective net worth by more than a quarter “at the height of the crisis from April to July” by “betting on the recovery of global stock markets when they were at their nadir during the global lockdowns in March and April.”
UBS executive Josef Stadler told The Guardian that the uber-rich, who he described as having a “significant risk appetite,” were able to benefit from the crisis because they had “the stomach” to purchase more company shares when equity markets were declining. When global stock markets rebounded, their strategy paid off.
Whereas the report focused on billionaire tech and healthcare entrepreneurs “pulling ahead” in relation to their super-rich peers, critics were quick to point out that the most significant polarization is not within the billionaire class but between billionaires and the vast majority of humanity.
“The super-rich got even richer while millions of people around the world lost their jobs,” tweeted Richard Burgon, a British Labour Party parliamentarian. “That’s not a coincidence,” Burgon added. “That’s how their rotten system works.”
The world’s billionaires increased their wealth by more than a quarter during the Coronavirus crisis.
The super-rich got even richer while millions of people around the world lost their jobs.
That’s not a coincidence. That’s how their rotten system works.https://t.co/79elgBa7oE
— Richard Burgon MP (@RichardBurgon) October 7, 2020
“What crisis?” began Al-Jazeera’s headline on the new report, signaling that even as material conditions worsen for billions throughout the world, billionaires are doing better than ever before.
“Extreme wealth concentration is an ugly phenomenon from a moral perspective,” Luke Hilyard, executive director of the High Pay Centre, a thinktank that focuses on excessive compensation, told The Guardian. “But it’s also economically and socially destructive.”
“Billionaire wealth equates to a fortune almost impossible to spend over multiple lifetimes of absolute luxury,” Hilyard added. “Anyone accumulating riches on this scale could easily afford to raise the pay of the employees who generate their wealth, or contribute a great deal more in taxes to support vital public services, while remaining very well rewarded for whatever successes they’ve achieved.”
Billionaires are cognizant of the fact that their intensified accumulation of wealth at a time of immense suffering for so many around the world could make them the targets of public outrage.
According to The Guardian, “Stadler has previously warned that the yawning gap between rich and poor could lead to a ‘strike back.’”
“Is there a risk they may be singled out by society? Yes,” Stadler said. “Are they aware of it? Yes.”
Authors of the report bragged that “billionaires are giving more than at any time in history,” adding that “entrepreneurs are turning into philanthropists earlier in their careers than previously.”
But, as Al-Jazeera reported, “not everyone agrees that the growing number of billionaires is a force for good.”
As Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, explained earlier this year: “Instead of supporting charities on the frontlines of problem solving, these billions end up sitting in tax-advantaged intermediaries.”
“The wealthier the donor, the more advantaged the charitable tax deduction becomes,” Collins wrote. In the United States, “for every dollar donated by a billionaire to their private foundation… taxpayers chip in as much as 74 cents on the dollar in lost tax revenue.”
“Taxpayers should not subsidize private fortresses of wealth and power that will exist for generations, controlled by the same families and their professional advisers,” Collins added.