Who Profits in the Pandemic?

Photo by Jernej Furman, published under Creative Commons license.

As small businesses fail and lines at food banks lengthen, billionaires are getting richer in these pandemic times. Business Insider reports that U.S. billionaires’ wealth increased by $845 billion during the first six months of the pandemic. Take Jeff Bezos, CEO of Amazon. His personal wealth increased from $73.2 billion to $113 billion, and Amazon shares rose by 40% in 2020. 

And it’s not just that billionaires are getting richer. They gap between the very rich and the rest of us is growing, and the poor are getting even poorer. The Institute for Policy Studies reports:

“Between March 18 and April 10, 2020, over 22 million people lost their jobs as the unemployment rate surged toward 15 percent. Over the same three weeks, U.S. billionaire wealth increased by $282 billion, an almost 10 percent gain.”

In March, the stock market plunged. Since then, it has recovered fully. That benefits people who are not billionaires, but still people at upper income levels: predominantly white and college-educated. Homeowners also saw an average increase in value of 8.5 percent in July 2020 compared to July 2019.   

CNBC notes that the recovery from the pandemic recession works mostly for people who already had relatively high incomes and owned real estate or stocks and bonds: 

“That remarkable recovery masks deep and continuing financial pain for other groups, like people of color, lower earners, women and workers with less education. Such groups are more likely to report hardship like food insecurity and trouble paying rent.”

Those are also the groups left out of COVID relief as unemployment supplements run out or jobs return on a reduced-time, reduced-pay basis. According to CNBC’s reporting, “employment among the lowest earners — who saw more than 35% of their jobs evaporate by mid-April — is still down more than 16% from the beginning of the year.”

That the pandemic has made the wealthiest even richer and the poor even poorer should come as no surprise. Income and wealth inequality has increased consistently since 1975. Time Magazine cites a Rand think tank analysis: 

“As the RAND report … demonstrates, a rising tide most definitely did not lift all boats. It didn’t even lift most of them, as nearly all of the benefits of growth these past 45 years were captured by those at the very top. ….

“It is easy to see how such a deadly virus, and the draconian measures required to contain it, might spark an economic depression. But look straight into the eyes of the elephant in the room, and it is impossible to deny the many ways in which our extreme inequality—an exceptionally American affliction—has made the virus more deadly and its economic consequences more dire than in any other advanced nation. Why is our death toll so high and our unemployment rate so staggeringly off the charts? Why was our nation so unprepared, and our economy so fragile? Why have we lacked the stamina and the will to contain the virus like most other advanced nations? The reason is staring us in the face: a stampede of rising inequality that has been trampling the lives and livelihoods of the vast majority of Americans, year after year after year.”

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