Billionaires—pandemic edition

2019 was a very good year for the world’s wealthiest individuals. The normal workings of global capitalism created both more billionaires and more combined wealth owned by those billionaires.

According to Wealth-X, which claims to “have developed the world’s most extensive collection of records on wealthy individuals and produce unparalleled data analysis to help our clients uncover, understand, and engage their target audience,  as well as mitigate risk,” the size of the global billionaire population increased strongly in 2019, rising by 8.5 percent
to 2,825 individuals, while their combined wealth increased by 10.3 percent to $9.4 trillion.

To put that into perspective, the world’s real Gross Domestic Product grew by only 2.9 percent (International Monetary Fund) in 2019—while the value of global equities, which is key to billionaires’ wealth, soared by more than 25 percent (MSCI World Index).

The United States still leads the list of the world’s billionaire population and their wealth. In 2019, the number of American billionaires rose by almost 12 percent to 788 individuals, accounting for 28 percent of the global billionaire population (China has the next highest share at 12 percent). Cumulative billionaire wealth in the United States increased by 14 percent to $3.4 trillion, more than the combined net worth of the next eight highest-ranked countries and equivalent to a 36 percent share of global billionaire wealth.*

What about the novel coronavirus pandemic?

According to Bloomberg, only two of the world’s 10 richest people have seen their wealth decline in 2020: luxury mogul Bernard Arnault and Berkshire Hathaway Inc.’s Warren Buffett. Everyone else, whose wealth is tied to technology holdings (except for Mukesh Ambani, the Indian billionaire who chairs and runs oil and gas giant Reliance Industries), has seen their individual and collective wealth increase—none more so than Jeff Bezos (the Amazon.com Inc. founder who has seen his net worth soar by $63.6 billion this year) and Elon Musk (whose net worth has more than doubled to $69.7 billion on the back of surging Tesla Inc shares).**

On a global level, billionaires tied to technology businesses have outperformed all others, especially those whose wealth is tied to the automotive, shipping, media, textiles and apparel, and aerospace (less so defense) industries. They, of course, are the ones who most want to see a quick solution to the pandemic and a reopening of economic activity around the world.

In general terms, wealthier billionaires are more exposed to the ebbs and flows of the stock market, while those at lower tiers tend to have more of their wealth in private holdings, likely to be their primary business. For example, those in the two highest billionaire wealth tiers—above $10 billion— hold between almost half and more than three-quarters of their assets in public holdings. These individuals have withstood significant volatility in their wealth as stock markets first fell considerably and then rebounded equally dramatically—this past Friday, to a new record high in the United States—since the beginning of the pandemic.

So, what are the world’s billionaires, in the United States and around the globe, doing with their wealth in the midst of the pandemic? We know they’re not particularly worried with the same problems as their predecessors, the Robber Barons, whose enormous economic power in the United States created a fierce counter-reaction, in militant labor unrest and the adoption of reforms that once seemed radical, like the Sherman Antitrust Act and a federal income tax.

At least so far. . .

Instead, according to Wealth-X, they are

working with their wealth advisors and planners to ensure their financial holdings and wealth plans (whether concerned with investment diversification, wealth transfer or philanthropic aims) remain up to date and in the best possible state given the evolving global situation.

They’re also concerned about their own safety and new forms of luxury consumption. According to the Wealth-X Global Luxury Outlook 2020. “The wealthy’s mindset around what luxury is has changed—their priorities have shifted towards their families,” Jaclyn Sienna India, CEO of luxury travel company Sienna Charles, said in the report. “Luxury now includes a second passport, access to healthcare and the freedom to go when and where they feel safe and secure.”

“Quite a few wealthy people are looking for exclusive safe havens in the form of second homes—safety has become a priority for them,” Alistair Brown, CEO of Alistair Brown International Real Estate. “But with this purchase, they expect access to established locations often via residency and additional passports as well as access to medical help.”

Additionally, the wealthy have become increasingly accustomed to purchasing luxury goods online since the pandemic, as high-end brands expand their digital offerings, the report said.

“The wealthy continue to value luxury as they did prior to Covid-19. However, the way they buy luxury has changed, with more having moved to making their purchases online,” Winston Chesterfield, principal of luxury watch company Barton.

Meanwhile, what is everyone else supposed to do? Well, they have to stay as safe as they can at home and on the job—as they are subjected to the second or third wave of the pandemic—and try to obtain sufficient food, remain in their shelter while not being able to keep up with their rents and mortgages, and pay for their healthcare—in the midst of widespread pay cuts and soaring unemployment.

And, perhaps, begin to sharpen the twenty-first century equivalent of pitchforks. . .

———

*That’s my quick (and, I understand, overly simplistic) argument against the rise of fascism in the United States: billionaires and the other members of the group of ultra-wealthy individuals don’t need it, since they’re doing quite well the way things are.

**Currently, five of the largest American tech companies—Apple, Amazon, Alphabet, Facebook, and Microsoft—have market valuations equivalent to about 30 percent of U.S. gross domestic product. That’s almost double what they were at the end of 2018.

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

Cartoon of the day

Special mention

 

The jungle—pandemic edition

Like nursing homes, the U.S. meatpacking industry has become one of the hotspots of the novel coronavirus pandemic.

By 5 May, over 10,000 meatpacking plant workers in 29 states and working at 170 plants had tested positive for the coronavirus. At least 45 of those meat industry workers had died. The outbreaks have prompted at least 40 meat slaughtering and processing plant closures—lasting anywhere from one day to several weeks—since the start of the pandemic.

They should have been closed down and stayed closed, to protect the health and safety of meatpacking workers. But then Donald Trump, on 28 April (the day after John Tyson, the chair of the board of Tyson Foods, published a full-page ad in The New York Times, The Washington Post, and the Arkansas Democrat-Gazette), invoked the 1950 Defense Production Act and designated the meatpacking plants as part of critical infrastructure in the United States. He thus ordered meat processing plants to stay open to protect the nation’s food supply amid the coronavirus pandemic. On top of the fact that production lines necessitate that workers stand very close together, most are low-income, hourly workers, many of them immigrants.

More than a century later, the U.S. meatpacking industry is back to The Jungle.

Upton Sinclair’s famous novel brought the difficult working and living conditions of meatpackers to light. I taught it on a regular basis in my Commodities: The Making of Market Society course, in the section on labor as a commodity. I discovered that Sinclair’s exposé, which was serialized in the socialist magazine Appeal to Reason before it was published as a single volume, had disappeared from high-school reading lists. But when students read it, it opened their eyes to the exploitation of labor in the meatpacking industry, especially when they read passages like these:

It was all robbery, for a poor man. The rich people not only had all the money, they had all the chance to get more; they had all the know-ledge and the power, and so the poor man was down, and he had to stay down . . .

All day long this man would toil thus, his whole being centered upon the purpose of making twenty-three instead of twenty-two and a half cents an hour; and then his product would be reckoned up by the census taker, and jubilant captains of industry would boast of it in their banquet halls, telling how our workers are nearly twice as efficient as those of any other country. If we are the greatest nation the sun ever shone upon, it would seem to be mainly because we have been able to goad our wage-earners to this pitch of frenzy.

Unfortunately, the reception of Sinclair’s graphic descriptions of the meatpacking industry in Chicago focused more on the quality of the food than on the working conditions, causing him later to lament that “I aimed at the public’s heart, and by accident I hit it in the stomach.”

Fortunately, conditions in the meatpacking industry did improve over time, especially when the openly left-wing United Packinghouse Workers of America engaged in a militant battle to organize workers across racial and ethnic lines and to bargain over pay and working conditions with employers. As Meagan Day explains,

For a few decades, thanks to this high degree of worker organization, meatpacking was not one of the most dangerous, difficult, and undercompensated jobs in the United States.

But then the industry itself changed, with the growth of a few very large meat-processing corporations, which in turn decided to move plants to more rural areas, where it was much harder to organize workers.*

Exactly one century after the first installment of Sinclair’s novel appeared, conditions had deteriorated so badly that Human Rights Watch, for the first time in its history, singled out a particular U.S. industry for violating basic human and worker rights. According to its report, “Blood, Sweat, and Fear: Workers’ Rights in U.S. Meat and Poultry Plants,”

Meat and poultry industry companies do not promise rose-garden workplaces, nor should it be expected of them. Turning an eight hundred pound animal or even a five pound chicken into tenders for the supermarket checkout or fast food restaurant counter is by its nature demanding physical labor in bloody, greasy surroundings. But workers in this industry face more than hard work in tough settings. They contend with conditions, vulnerabilities, and abuses which violate human rights.

Employers put workers at predictable risk of serious physical injury even though the means to avoid such injury are known and feasible. They frustrate workers’ efforts to obtain compensation for workplace injuries when they occur. They crush workers’ self-organizing efforts and rights of association. They exploit the perceived vulnerability of a predominantly immigrant labor force in many of their work sites. These are not occasional lapses by employers paying insufficient attention to modern human resources management policies. These are systematic human rights violations embedded in meat and poultry industry employment.

Today, seven companies dominate the industry (according to data from the National Provisioner)—the same companies that have been featured in recent news reports about the growing number of virus infections and temporary plant closures in rural America: Tyson, JBS, Smithfield, and so on.

These corporations and others in the contemporary meatpacking jungle only pay their workers, on average $14.05 an hour or $29,230 a year (median pay for slaughterers and meat packers in May 2019). That’s less than three-quarters (73.4 percent) of the median pay for all occupations in the United States ($19.14 an hour)—and much less even than many other groups of “essential” workers, including bus drivers ($20.69), licensed nurses ($22.83), postal service workers ($25.03), and tractor-trailer drivers ($21.76).

The fact is, even before the pandemic, giant meatpacking companies were more determined than ever to keep labor costs as low as possible and production as high as possible. This meant hiring cheap labor, maintaining intolerably high line speeds, and demanding cuts in wages and benefits from unionized facilities.

And then, once the pandemic was underway and spreading across the country, the meat-processing industry’s failure to protect its workers from the coronavirus triggered the most serious threat to U.S. meat supplies since World War II.

Now as in 1906, safe working conditions are the priority for workers on the meat-processing assembly-lines. The Trump administration has clearly sided with the corporations. The question for the rest of Americans is, are they going to respond to the crisis in the meatpacking industry with their hearts or their stomachs?

 

*According to union researcher Daniel Calamuci, writing in 2008, the United Packinghouse Workers of America eventually merged with the Amalgamated Meat Cutters in 1968 and, in 1979, they became part of the United Food and Commercial Workers International Union. The new union adopted a much less militant stance. For example, when one of its union locals at a Hormel plant in Minnesota went on strike in 1985 to preserve its workers’ high wages, the national organization declined to support it.

.

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

  

Cartoon of the day

Special mention

  

Cartoon of the day

Special mention