Billionaires get richer – but capping top pay could raise incomes for low and middle earners

New reports highlight growing inequality during the pandemic and the need for big thinking to buck this trend

The  recent release of two new reports focused on inequality and the Covid-19 pandemic led to significant coverage for the High Pay Centre in both print and broadcast media.

Billionaires getting richer during the Covid-19 crisis

The first of these was a report on billionaires from UBS and PWC.  The report revealed that during the first four months of the Covid-19 crisis (April to July), global billionaire wealth increased by 27.5% to $10.2tn. This marks a new high, exceeding the previous high of $8.9tn recorded in 2017. The number of billionaires also increased from 2,158 in 2017 to 2,189.

Our Director Luke Hildyard responded to the report saying,

“Extreme wealth concentration is an ugly phenomenon from a moral perspective, but it’s also economically and socially destructive.

Billionaire wealth equates to a fortune almost impossible to spend over multiple lifetimes of absolute luxury. 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.

The findings from the UBS report showing that the super-rich are getting even richer are a sign that capitalism isn’t working as it should.”

The High Pay Centre’s statement was widely reported in the UK and globally including prominent coverage in the Guardian, the Metro, the Daily Mail and the Sun.

Time for a maximum wage?

In the same week we published a joint report with Autonomy looking at the potential redistribution from very high earners to low and middle income workers. This included publishing public polling showing broad public support for the idea of a maximum wage or wage caps. More on the report here.

The report was covered in the Guardian, Daily Mail, as well as on regional news websites across the UK. Luke Hildyard also went onto Talkradio and Times Radio to discuss the report. You can listen to Luke’s full interview with Ian Collins here.

What these two reports show is that while the public would be open to a far more egalitarian economy, the trend is still very much going in the other direction.

Changing this won’t be easy. Even if polling indicates the public support radical action on tackling inequality, last year’s UK general election and the defeat of Bernie Sanders in the US raise doubts over politicians’ ability to convince the public that change is achievable and worth voting for.

For more on this, read Luke’s latest blog here.