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

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

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US billionaires collectively have become $ 1.1 trillion – nearly 40% – richer since mid-March, according to a report published on Tuesday by progressive groups Institute for Policy Studies and Americans for Tax Fairness.

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

Clearly, the pandemic is worsening America’s already worrying inequality crisis. The surprising gains at the top contrast sharply with the financial difficulties of those at the bottom, many of whom are at the forefront of the pandemic and have lost their jobs or had cut wages.

America’s 660 billionaires now hold $ 4.1 trillion in wealth – two-thirds more than the amount held by the poorest 50% of the US population, the report concluded.

Poverty rate rises sharply

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

The US poverty rate decreased during the first months of the pandemic, largely because of federal government stimulus checks. However, the poverty rate rose 2.4 percentage points during the second half of the year – almost double the biggest annual increase in poverty since 1960, economists found.

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Some groups suffered more than others. The poverty rate of black Americans is 5.4 percentage points higher today than in June 2020, which means 2.4 million people who have fallen into poverty, economists have found.

For those with secondary education or less, the poverty rate rose to 22.5%, from 17% in June.

Florida, Mississippi, Arizona and North Carolina are among the states that have experienced the greatest increases in poverty rates. State-level findings “suggest that poverty has increased most in states with less effective unemployment insurance systems,” economists said in the report.

How Biden wants to combat inequality

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

The stock market is at record levels, the housing market is booming and Big Tech is thriving. However, other industries, including airlines, restaurants, hotels and cinemas, are still in disarray.

Janet Yellen, President Joe Biden’s newly confirmed Treasury secretary, acknowledged this problem and suggested that it is nothing new.
“Long before Covid-19 infected a single American, we were living in a K-shaped economy, where wealth built on wealth while working families were falling further and further behind,” Yellen told lawmakers during his confirmation hearing. last week.
Biden and Yellen are calling for bold action by Congress to reduce inequality. Biden’s $ 1.9 trillion American Rescue Plan includes $ 1,400 stimulus checks, $ 350 billion in state and local aid and increased unemployment benefits. The White House must also push for a multi-trillion infrastructure package that would aim to further boost the economy – and could be financed in part by raising taxes on corporations and the wealthy.

Rising housing, stock markets

The pandemic was a blessing to the housing market, with sales of existing homes reaching a 14-year high in 2020. House prices, an important source of wealth, have reached a record high.

The stock market played a significant role in the division between rich and poor.

Even though the US economy has not fully recovered from the pandemic, the S&P 500 rose 72% from its lowest point in March. This V-shaped recovery reflects optimism about vaccines, trillions of relief provided by Washington and unprecedented measures by the Federal Reserve that essentially forced investors to bet on stocks.

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It is not surprising that rising stock prices are especially useful for the wealthy because they have more skin in the game. In early 2020, the wealthiest 10% of American households owned 87% of all stocks and mutual funds, according to the Federal Reserve. In contrast, millions of less affluent Americans cannot feel the stock market boom.
From tesla (TSLA) The soaring stock price has raised Musk’s wealth by more than 600%, according to the wealth report. Other big winners include Amazon (AMZN) the 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 in mid-March.

Inequality is not just an American problem.

It will take more than a decade for the world’s poorest to recover 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 1,000 billionaires to recover.

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