US billionaires $ 1.1 billion richer during pandemic

US billionaires $ 1.1 billion richer during pandemic

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U.S. billionaires have amassed a combined $ 1.1 billion – nearly 40 percent – since mid-March, according to a report published 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 reportedly declared a global pandemic.

It is clear that the pandemic is exacerbating the already alarming inequality crisis in America. The staggering profits at the top contrast sharply with the financial struggles of those at the bottom, many of whom are at the forefront of the pandemic and have lost their jobs or dropped wages.

America’s 660 billionaires now own $ 4.1 billion in wealth – two-thirds more than the bottom 50% of the US population, the report said.

Poverty rate rises sharply

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

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

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

For those with high school education or less, the poverty rate rose to 22.5%, compared to 17% in June.

Florida, Mississippi, Arizona and North Carolina were among the states that suffered the largest increase in poverty rates. The state-level findings ‘indicate that poverty has increased more in countries with less effective unemployment insurance systems’, the economists said in the report.

How Biden Wants to Fight Inequality

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

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

Janet Yellen, President Joe Biden’s newly confirmed Treasury Secretary, acknowledged this problem and suggested it was nothing new.
“Before Covid-19 infected a single American, we lived in a K-shaped economy, where wealth was built on wealth while working families fell further and further behind,” Yellen said during her confirmation hearing last week.
Biden and Yellen urge Congress to take courageous action to alleviate inequality. Biden’s $ 1.9 billion US bailout plan includes $ 1,400 stimulus checks, $ 350 billion in state and local aid and increased unemployment benefits. The White House is also expected to push for a multi-trillion infrastructure package aimed at furthering the economy – and partly funded by raising taxes on corporations and the rich.

Housing, stock markets

The pandemic was a boon for the housing market, with existing home sales peaking at 14 years in 2020. House prices, a major source of wealth, have reached a record high.

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

Although the US economy has not yet fully recovered from the pandemic, the S&P 500 is 72% higher than in March. The V-shape recovery reflects optimism about vaccines, trillions of relief by Washington and unprecedented steps by the Federal Reserve that have essentially forced investors to bet on stocks.

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Not surprisingly, rising stock prices are especially useful for the rich because they have more skin in the game. According to the Federal Reserve, the richest 10% of US households owned 87% of all shares and mutual funds as of early 2020. In contrast, millions of less affluent Americans cannot feel the boom in the stock market.
Tesla’s (TSLA) the rising share price increased Musk’s wealth by more than 600%, according to the wealth report. Other major gains include Amazon (AMZN) founder and CEO Jeff Bezos, whose wealth rose 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 just an American problem.

According to Oxfam International’s annual inequality report released on Sunday, it will take the world’s poorest more than a decade to recover their losses due to the pandemic. In contrast, it took only nine months before the world’s largest 1,000 billionaires recovered.

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