EDITOR NOTE: The market inches higher and a little more discrepancy enters the US economy, crushing Americans below the top tier. The monetary and fiscal response to the coronavirus pandemic amounted to a massive wealth transfer among Americans. While millions of people lost their jobs, billionaires saw a wealth increase of 28%. That’s $821 Billion. Meanwhile, those in the lower income brackets suffered more losses than those in the middle and upper brackets. What we’re seeing can no longer be described as capitalism. A system driven by competition, capitalism naturally produces inequities, but it also produces income mobility. In the current system, whatever you want to call it (corporatism perhaps?), government and central banks choose the winners and the losers. And the current K-shaped recovery shows exactly who among American society has been robbed of the one thing for which America has always stood: opportunity.
The world’s wealthiest individuals have become even richer during the coronavirus pandemic as the prices of financial assets have been supported by widespread policy intervention while employment and wages, well, not so much.
The Institute for Policy Studies, a liberal think tank in Washington, chronicles just how bifurcated the road the recovery from an economy slump is likely to be.
At the upper end of the spectrum, the combined wealth of all U.S. billionaires increased by $821 billion or 28% between March 18, 2020 and September 10, 2020, from approximately $2.947 trillion to $3.768 trillion. That means they own the equivalent of nearly 20% of U.S. gross domestic product.
The richest five billionaires, Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett, and Elon Musk, saw a 59% increase in their total wealth, from $358 billion to $569 billion.
Back on Earth, one University of Chicago study found that, between the start of February and the end of June, the lowest-income group had the highest job loss rate while the highest-income workers had the rate of lob losses.
Black and Hispanic workers were also much more likely to become unemployed during the pandemic than Whites despite their predominant role in work deemed so essential to social functioning that it could not afford to be shut down even for a deadly virus, the report notes.
The August unemployment rate stood at 13% for Black Americans, 10.5% for Hispanics and 7.3% for Whites. The overall jobless rate is 8.4%.
As the pandemic forced many industries into remote work, millions of Black and Hispanic workers have been left out.
“Pre-pandemic figures indicate that only 19.7% of Black and 16.2% of Latinx people work in jobs where they are able to telework, compared to 29.9% of White and 37.0% of Asian workers,” the report said.
Originally posted on Forbes