Even as the economy continues to sputter and millions of Americans remain jobless, US billionaires grew richer. Collectively, American billionaires gained 40% more wealth or $1.1 trillion since March of last year. This is according to a report released by the Institute for Policy Studies and Americans for Tax Fairness.
More Money Than Ever
The richest Americans not only recovered their losses from last year’s coronavirus bloodbath, but they have more money than ever before. A lot of it has to do with the continued bull run of the stock market.
Tesla CEO Elon Musk, for example, is $155 billion richer than he was in March last year when he was only worth $24.6 billion. Tesla’s stratospheric rise to the top of the market fueled his value growth. In addition, forty-six people joined the US billionaire club on March 18, 2020. America’s 660 billionaires collectively hold $4.1 trillion in wealth. This is 66% more than what the bottom 50% of Americans hold in their walters.
Poverty Rising As Well
However, as US billionaires grew richer, an increasing number of Americans lost jobs and coped with financial hardships. While many lost jobs, many others remained at theirs but with payroll cuts and no guarantee for the next few months.
During the first half of 2020, poverty levels declined due to the influx of stimulus money. When relief dried up in the second half, the poverty rate climbed to 2.4%, with 8 million Americans downgraded to poverty levels during the period, including 2.4 million Blacks. This is the largest annual increase in poverty since the 1960s. For those educated until high school levels, the poverty rate climbed from 17% in June 2020 to 22.5%by December.
The contrasting growth for billionaires and rise in poverty levels provided further proof of a K-shaped recovery. The stock market, housing, and big tech are all breaking record highs. Meanwhile, airlines, restaurants, hospitality, and entertainment remain in shambles due to a lack of customers. Treasury Secretary Janet Yellen acknowledged what’s happening and said it’s nothing new.
“Well before Covid-19 infected a single American, we were living in a K-shaped economy, one where wealth built on wealth while working families fell further and further behind,” Yellen told lawmakers during her confirmation hearing. Yellen, along with President Joe Biden, is calling on Congress to help address the inequality. The $1.9 trillion American Rescue Plan includes $1,400 stimulus checks, $350 billion in state and local relief, and money for unemployment aid. Afterward, the Biden White House will push for a multi-trillion infrastructure package to inject activity into the economy. They are considering adding more taxes for corporations and the wealthy to fund these projects.
Record Highs for Houses and Stock Markets
The housing market, driven by low-interest rates and the need for urban dwellers to move to less crowded areas, hit record highs in prices. Buyers eagerly snapped up available homes, drying up the market and driving up demand. Meanwhile, the stock market set record highs in all three indices: the Dow Jones Industrial Average, the S&P 500, and Nasdaq.
While the pandemic shutdown and stimulus relief opened up the markets to ordinary investors, the wealthy walked away with more stock winnings. By 2020, the top 10% richest households held 87% of all stocks and mutual funds. Apart from Musk, other US billionaires got richer. Amazon founder and CEO Jeff Bezos grew richer by $68 billion due to surging Amazon stock, and Facebook CEO Mark Zuckerberg generated an additional $37 billion.
The billionaires’ climb also illustrates the difficulty of recovering from the pandemic. For most Americans, especially the unemployed, it will take a decade or so to recover from their losses. For the billionaires, they only needed nine months last year to get back their money and earn more.
Watch the CBC news video talking about the Oxfam report that confirmed the rich got richer during the pandemic.
As US billionaires grew richer, do you support moves to tax wealthier Americans more to fund the government’s economic recovery programs? Do you think the rich will agree to this? Let us know what you think. Drop your thoughts in the comment section below.