Billionaires’ Wealth Skyrockets While Millions Of Americans Descend Into Poverty

The COVID-19 pandemic has exacerbated many existing social inequalities, the largest of which may be the wealth gap. In 2019, prior to the onset of the pandemic, the richest one percent of Americans were worth 35.4 trillion dollars, just shy of the combined wealth of the entire 50th to 90th percentile, who held 36.9 trillion – a percentile that encapsulates the majority of the middle and upper-middle classes. This gap has only widened.

The coronavirus has devastated the workforce, with an estimated 22 million jobs lost this year, and 6.6 million Americans filing for unemployment in a one-week period in April 2020 alone. This especially impacts low-wage workers, who have less job security and are more likely to work in industries that were most affected, such as hospitality, retail, and education. Women make up more than half of all low-wage workers, and Black, Hispanic, and Latino workers are disproportionately represented.

Conversely, Forbes found that current billionaires in the United States saw a combined wealth increase of 821 billion dollars, with the five richest billionaires seeing a 59 percent increase in their wealth. These increases mean that the combined wealth of American billionaires is now $3.768 trillion, or equivalent to nearly twenty percent of the total U.S. Gross Domestic Product (GDP).

Even prior to the COVID-19 pandemic, wealth inequality in the United States of America and globally was massive and increasing. The latest data from the U.S. Federal Reserve reported that the top one percent of Americans hold 30.4 percent of all household wealth, while the bottom half owns just 1.9 percent. Global figures are even more stark: the 2020 Credit Suisse Global Wealth report revealed that the richest one percent owns 43 percent of wealth, and the poorest 50 percent own only one percent. Further, the elite 0.1 percent own a quarter of the world’s wealth.

Contrary to the widespread job loss and unemployment experienced by much of the working class, the stock market made gains during the coronavirus pandemic, resulting in massive profits for American billionaires. Fifty-six new billionaires were added to the ranks, bringing the total to 659. Elon Musk, the CEO of Tesla, briefly overtook Jeff Bezos as the richest person in the world as his wealth increased by over $150 billion since March 2020. Bezos, Founder and CEO of Amazon, saw his wealth increase by 65 percent in the same timeframe, due to Amazon’s share prices doubling.

To put this into perspective, the Department of Education estimated that eliminating tuition at all public universities and colleges in the United States would cost roughly $79 billion, equivalent to what Jeff Bezos makes in a year. Tesla’s shares fell by eight percent on January 11, causing Elon Musk’s net worth to decrease by $13.5 billion, or two thirds of the estimated cost to effectively eliminate homelessness in the United States for a year. Musk, Bezos, and Microsoft co-founder Bill Gates – the three richest people in the U.S. – all reside in states that do not collect income tax.

While the ultra-rich increased their net worth by an average of 57 percent, nearly eight million Americans have fallen into poverty since the summer, with an 11.7 percent increase in November 2020 alone. This is the single biggest jump that has been recorded since the government began tracking poverty 60 years ago, and nearly doubles the second largest increase caused by the oil crisis in 1979-1980. The Coalition to End Homelessness announced that for the first time, the number of single adults sleeping in New York City homeless shelters has surpassed 20,000, and stores across the country have reported that shoplifting of staples such as rice, formula, and bread has increased. Roughly one in eight households, or 26 million people, reported that they didn’t have enough food to eat in the last week. This figure rises to one in six for households with children. Similar to the increases in poverty, experts estimate that hunger is more prevalent today than at any other point since 1998, when the Census Bureau began tracking food insecurity.

Over 20 million Americans are accessing unemployment benefits, and unemployment rates are at their highest since the Great Depression. Black and Hispanic workers are particularly affected, with rates of 16.8 and 17.6 percent respectively, compared to 12.4 percent for white workers. People of color are also overrepresented in front-line jobs, and as such are more likely to be exposed to the virus, and often work in low-wage positions without access to sick leave. Only twenty percent of Black workers are able to work from home, compared to nearly a third of white employees.

Further, workers who had to quit their jobs due to childcare requirements, underlying health conditions that made it unsafe to work, or other circumstances were unable to access unemployment benefits. Prosperity Now’s annual scorecard reported that in 2019, forty percent of American households did not have sufficient savings to make ends meet for three months, even at the poverty level. As the pandemic drags on, more households will fall beneath the poverty line unless sufficient aid is provided.

Above all, experts emphasized the need for the government to contain the coronavirus. Without containment, sending people back to work and into their communities will just increase the spread of COVID-19. Additionally, stimulus bills must address racial and wealth inequality, and ensure that aid is directed towards those who most need it, rather than shareholders or companies unaffected by the pandemic. Americans also need widespread access to unemployment benefits, food assistance, low-income or affordable housing, and a safe working environment.

The pandemic has illustrated a need for workers to be provided with living wages, sick days, and healthcare that is not solely tied to their employment. A progressive tax structure that taxed corporations and the wealthy equitably could contribute to the funds required to build a substantial social safety net and ensure that no Americans are left behind in the next crisis.

Kailey Ouellette