Extreme wealth and extreme poverty have both risen simultaneously for the first time in 25 years, according to a recent study conducted by development charities Oxfam and ActionAid. The research discovered that the world’s 722 largest companies are collectively generating over $1 trillion in windfall profits each year. These profits have been fueled by soaring energy prices and increasing interest rates.
The analysis, based on the Forbes’ Global 2000 rankings, revealed that these corporations made $1.09 trillion in windfall profits in 2021 and $1.1 trillion in 2022, representing an 89% surge in total profits compared to average profits from 2017 to 2020. The study defines windfall profits as profits that exceed average profits from 2017 to 2020 by more than 10%.
The study specifically highlighted that 45 energy companies generated an average of $237 billion in windfall profits annually over the past two years. Furthermore, the number of energy billionaires has now reached 96, with a combined wealth of nearly $432 billion, which is $50 billion more than their wealth in April 2022.
In addition to energy corporations, food and beverage companies, banks, pharmaceutical giants, major retailers, and aerospace and defense corporations have also taken advantage of the global cost-of-living crisis. This crisis has resulted in more than a quarter of a billion people in 58 countries facing acute food insecurity in 2022.
The report also noted a concerning trend – extreme wealth and extreme poverty increasing simultaneously for the first time in a quarter of a century. While corporations enjoy massive profits, workers’ pay and conditions continue to deteriorate.
Oxfam International interim Executive Director, Amitabh Behar, expressed outrage at the corporate greed prevalent in society. Behar stated, “People are sick and tired of corporate greed. It’s obscene that corporations have raked in billions of dollars in extraordinary windfall profits while people everywhere are struggling to afford enough food or basics like medicine and heating.”
Behar further highlighted the role of corporate profiteering in contributing to the inflation problem, coining the terms “greedflation” and “excuseflation.” These terms encapsulate the idea that companies are exploiting the cost-of-living crisis to boost profit margins. This phenomenon is playing a significant role in supercharging inflation.
The study’s findings emphasize the urgent need to address the inequality and disparity that has been perpetuated by the corporate world. The widening gap between extreme wealth and extreme poverty can have detrimental effects on societies, creating social unrest and economic instability.
It is crucial for governments, international organizations, and civil society to take action in order to rebalance the scales and ensure a fairer distribution of wealth. This includes implementing policies that promote equitable taxation, encouraging responsible business practices, and investing in social welfare programs to uplift those living in poverty.
In conclusion, the research conducted by Oxfam and ActionAid reveals the alarming reality of extreme wealth coexisting with extreme poverty. The immense windfall profits enjoyed by corporations amid a global cost-of-living crisis underline the urgent need for systemic change to address inequality and uplift the most vulnerable members of society.
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