As of that day, nearly 43 million Americans have submitted initial unemployment benefits. Low-income workers, especially in travel and catering, have been particularly hit by the health crisis.
These numbers put an exclamation point on the deep division between property and non-homes which helps fuel unrest across the United States. Wealth inequality is likely to worsen because of this crisis, experts say.
The acceleration of wealth for the richest Americans triggers a remarkable recovery in the stock market, which has risen sharply in large part due to unprecedented actions by the Federal Reserve.
“The stock market and separation from the real economy exacerbates inequality,” said Christina Hooper, chief global market strategist at Invesco.
Big Tech succeeds
Despite unrest on the streets of American cities and a record 43 million Americans seeking unemployment benefits, the Nasdaq is one step away from achieving high record achievements – a stunning feat that highlights how quickly Wall Streets have taken root.
The Fed’s immediate response, including cutting interest rates to zero and promising to buy unlimited amounts of bonds, was designed to make risky assets like stocks look more attractive. Investors have basically been forced to gamble on stocks – and Big Tech in particular benefits from that.
Big technology companies don’t just survive during a pandemic – many of them thrive. For example, the crisis has made Amazon even more important than it already was. Shares of Amazon reached 47% from their lowest prices in mid-March.
Facebook (full board) also recovered quickly to record heights. The net worth of Mark Zuckerberg, co-founder and CEO, has risen $ 30.1 billion since March 18, the IPS report found.
The report calculated the wealth of billionaires using data obtained from the Forbes list of billionaires, a real-time estimate of net worth. March 18th is used as the start date because it is a date tied to
Forbes’ global billionaire survey in 2020, It also roughly coincides with when the U.S. states and the federal government began imposing health restrictions.
Other tech players have also amassed more wealth in the last three months. Netto value
Tesla (TSLA) boss Elon Musk, Google founders Sergei Brin and Larry Page and former
Microsoft (MSFT) CEO Steve Ballmer has risen 13 billion or more per piece since March 18, the report said.
Unemployment could soon reach almost 20%
The United States, meanwhile, has been hit by mass unemployment caused by social distancing demands imposed to fight the pandemic.
Economists expect a job report on Friday to show the United States lost another 8 million jobs in May, raising the pandemic to 28.5 million – three times the number of jobs lost during the Great Recession. The unemployment rate is expected to rise to almost 20%, more than before the Great Depression.
“The growing wealth of billionaires associated with suffering and million-dollar suffering undermines the social solidarity needed to recover together in the years ahead,” Chuck Collins, co-author of the IPI report, said in a statement.
Of course, millions of average Americans are also benefiting from the recovery of the V-shaped stock market. The improvement has raised the value of investment portfolios, pension funds and pension accounts. Even betting on the vanilla fund that accompanies the S&P 500 would bring investors a neat return of almost 40% of the lowest costs on March 23rd.
About 52% of families had supplies directly or indirectly through retirement plans such as 401 (k) s, according to data from the Federal Reserve.
Still, the ever-faster stock market is helping the rich more than the rest of the country. This is because 10% of households are the best
owned 84% of all shares in 2016according to NYU professor Edward Wolff.
These trends help explain the unrest that has gripped the United States. Although the initial catalyst was police brutality, protests and riots take place in a nation divided on racial and economic grounds. These fault lines appear to increase during a pandemic.
“You have a flammable plant of lost income and inequality,” said Joe Brusuelas, chief economist at RSM International.
