While more than 40 million Americans have filed for unemployment, billionaire’s in America have increased their total net worth by $637 billion. These billionaires include people like Jeff Bezos, Elon Musk, Mark Zuckerberg, and Larry Elison. How can this happen during a pandemic, while a large portion of Americans are struggling?
This isn’t the first time billionaire’s have gotten richer during a crisis. Take for example the housing bubble burst in 2007-2008. Although 3.1 million homes were foreclosed as more than 8 million Americans lost their jobs, the income for the top 1% of US earners increased by 31.4%.
How It Happened
A 2019 Federal Reserve Survey found that 40% of Americans did not have $400 in their accounts to cover emergency costs. That was before the pandemic rocked the world’s economy. At the beginning of March 2020, the Dow suffered its worst single-day drop in history. However, by the beginning of June, billionaire’s were already seeing a tremendous increase in their wealth. This was possible due to the “V” shaped rebound in the stock market, which was fueled by the stimulus added by the Federal Reserve. This stimulus has not to date contributed to consumer inflation, but has in fact created asset bubbles.
The Bottom Line
The corona-virus pandemic has demonstrated a disconnect between the stock market and the underlying economy. This has allowed billionaire’s to gain significant wealth during the worst economic crisis in recent history. This crisis has led to an increase in underclass workers, essential workers needed to stock shelves at grocery stores, take care of the elderly and dying in hospitals, and workers that deliver essential items to homes. Our elected leaders have a duty and an obligation to formulate a strategy and action plan that ensures the other 99% of Americans have a clear path in leading a successful life for themselves and their families.
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