America’s billionaires got $ 1.1 trillion richer during the pandemic

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According to a report released Tuesday by progressive groups, Institute for Policy Studies and Americans for Tax Fairness, US billionaires have collectively gained $ 1.1 trillion – nearly 40% – richer.

According to the report, 46 people have joined the ranks of billionaires since March 18, 2020, the week after the World Health Organization declared a global pandemic.

Clearly, the pandemic is exacerbating America’s already troubling inequality crisis. The staggering profits at the top are in stark contrast to the financial hardship of those at the bottom, many of whom are on the front lines of the pandemic and have lost their jobs or wages cut.

America’s 660 billionaires now have $ 4.1 trillion in wealth – two-thirds more than the amount of the bottom 50% of the U.S. population, the report found.

The poverty rate is rising sharply

According to real-time estimates published by economists from the University of Chicago, University of Notre Dame and the Lab for Economic Opportunities, more than 8 million Americans fell into poverty during the last six months of 2020.

The poverty rate in the US fell during the first months of the pandemic, largely due to stimulus measures from the federal government. However, the poverty rate rose by 2.4 percentage points in the second half of the year – almost double the largest annual increase in poverty since the 1960s, the economists found.

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Some groups have suffered more than others. The poverty rate for black Americans today is 5.4 percentage points higher than in June 2020, which translates to 2.4 million people living in poverty, the economists found.

For those with a high school education or less, the poverty rate has increased to 22.5% from 17% in June.

Florida, Mississippi, Arizona and North Carolina were among the states with the greatest increases in poverty rates. The state-level findings “suggest that poverty has risen more in states with less effective unemployment insurance policies,” the economists said in the report.

How Biden wants to fight inequality

Wealth and poverty statistics are further evidence of America’s K-shaped economic recovery.

The stock market is at record highs, the housing market is booming and Big Tech is thriving. However, other industries, including airlines, restaurants, hotels, and movie theaters, are still confused.

Janet Yellen, President Joe Biden’s recently confirmed Treasury Secretary, has acknowledged this issue and suggested that it is nothing new.
“Long before Covid-19 infected a single American, we lived in a K-shaped economy, one in which wealth was built upon wealth while working families were falling further and further behind,” Yellen told lawmakers at her hearing last week.
Biden and Yellen are calling on Congress to take bold action to reduce inequality. Biden’s $ 1.9 trillion US bailout plan includes $ 1,400 incentive checks, $ 350 billion in state and local aid, and improved unemployment benefits. The White House is also expected to push for a multi-trillion infrastructure package aimed at further boosting the economy – and could be funded in part by raising taxes for businesses and the wealthy.

Rising houses, stock markets

The pandemic was a boon to the housing market, with sales of existing homes hitting a 14-year high in 2020. House prices, an important source of prosperity, reached record levels.

The stock market has played an important role in the gap between rich and poor.

While the US economy has not yet fully recovered from the pandemic, the S&P 500 is up 72% from its low in March. That V-shaped recovery reflects optimism about vaccines, trillions of aid provided by Washington, and unprecedented moves by the Federal Reserve that have essentially forced investors to bet on stocks.

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Not surprisingly, rising stock prices are especially helpful to the wealthy, as they have more skin in play. According to the Federal Reserve, the richest 10% of US households owned 87% of all stocks and mutual funds in early 2020. In contrast, millions of less affluent Americans cannot feel the stock market boom.
Teslas (TSLA) The skyrocketing stock price has pushed Musk’s wealth up more than 600%, the wealth report said. Other big winners include Amazon (AMZN) founder and CEO Jeff Bezos, whose wealth increased by more than $ 68 billion during the pandemic. Facebook (FB) co-founder and CEO Mark Zuckerberg is about $ 37 billion richer than mid-March.

Inequality is not only an American problem.

It will take more than a decade for the world’s poorest to recoup their losses from the pandemic, according to Oxfam International’s annual inequality report released Sunday. In contrast, it took only nine months for the world’s top 1,000 billionaires to recover.

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