America’s billionaires grew richer by $ 1.1 trillion during pandemic

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

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

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

America’s 660 billionaires now hold $ 4.1 trillion in wealth – two-thirds more than the amount held by the bottom 50 percent of the American population, according to the report.

The poverty rate rises sharply

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

The poverty rate in the United States declined in the first few months of the pandemic, in large part due to stimulus measures from the federal government. However, the poverty rate climbed 2.4 percentage points in the second half of the year – nearly double the largest annual increase in poverty since the 1960s, according to economists.

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

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

Florida, Mississippi, Arizona, and North Carolina were among the states that experienced the largest increases in poverty rates. The state-level results “suggest that poverty has increased more in states with less effective unemployment insurance systems,” economists said in the report.

How Biden wants to fight inequality

Wealth and poverty statistics provide further evidence of the 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 cinemas, are still in disarray.

Janet Yellen, President Joe Biden’s newly confirmed Treasury Secretary, acknowledged this problem and suggested it was nothing new.
“Long before Covid-19 infected a single American, we lived in a K-shaped economy, an economy where wealth relied on wealth while working families fell further and further back,” said Yellen to lawmakers during his confirmation hearing last week.
Biden and Yellen are calling for bold congressional action to reduce inequality. Biden’s $ 1.9 trillion US bailout includes 1,400 stimulus checks, $ 350 billion in state and local aid, and improved unemployment benefits. The White House is also expected to push for a multibillion-dollar infrastructure package that aims to further stimulate the economy – and could be funded in part by increased taxes on businesses and the wealthy.

Soaring housing, stock markets

The pandemic has been a boon to the housing market, with sales of existing homes hitting a 14-year high in 2020. Home prices, a major source of wealth, have hit an all-time high.

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

Even though the US economy has not fully recovered from the pandemic, the S&P 500 is up 72% from its March low. This V-shaped recovery reflects optimism over vaccines, the billions of billions in relief provided by Washington, and unprecedented Federal Reserve action that essentially forced investors to bet on stocks.

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Unsurprisingly, soaring stock prices are especially helpful to the wealthy because they have more skin in the game. At the start of 2020, the richest 10% of US households owned 87% of all stocks and mutual funds. , according to the Federal Reserve. In contrast, millions of less wealthy Americans cannot feel the stock market boom.
You’re here (TSLA) The stock price surge increased Musk’s wealth by over 600%, according to the Wealth Report. 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 in mid-March.

Inequality is not just 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 on Sunday. In contrast, it took just nine months for the world’s top 1,000 billionaires to recover.

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