This is from a press release sent out by Americans for Tax Fairness:
America’s billionaires saw their wealth increase by 20%, or $584 billion, roughly since the beginning of the pandemic…according to a new report by Americans for Tax Fairness (ATF) and the Institute for Policy Studies – Program on Inequality (IPS)…..Overall, between March 18—the rough start date of the pandemic shutdown, when most federal and state economic restrictions were in place—and June 17, the total net worth of the 640-plus U.S. billionaires jumped from $2.948 trillion to $3.531 trillion, based on the two groups’ analysis of Forbes data.
This is perfectly plausible. Much of the wealth of billionaires is tied up in the stock market, which has soared by about 30 percent since March 18. In fact, you could make a case that billionaires as a class have invested pretty poorly during the pandemic if they can’t even keep up with an S&P 500 index fund.
Still, 20 percent is a healthy gain in only three months. But here’s the interesting thing: the rest of us have actually done better. I know this is a little hard to believe, so let me show you a couple of charts. First off, here’s disposable income:
This is an 8 percent jump, mostly due to the stimulus checks and the increased UI benefits. However, this is income, not net worth. I’m only showing it to you to demonstrate the plausibility of what comes next. Here is personal savings:
That’s a 100 percent increase. And measures of savings deposits, which are not much used by billionaires, are up by over $1 trillion. This suggests that the $2 trillion increase in personal savings is mostly due to the increased wealth of non-rich people. Putting those two things together, my guess is that the actual increase is in the neighborhood of 50-90 percent. It’s impossible to say exactly how much this increases the overall net worth of the non-rich, but probably a fair amount.
I’m limited in what I can show you because many of the most interesting measures are collected only quarterly and aren’t available yet. But I think these two measures do a decent job of showing the overall shape of things.
So what’s my point? A couple of things:
- Obviously billionaires have had a much easier time handling the pandemic compared to the rest of us. There’s no argument about that. They’re rich; they can’t get fired; and they can even afford to hop over to some Caribbean island and avoid the pandemic entirely.
- At the same time, trying to measure income and wealth over very small time periods during a huge economic upheaval is a mug’s game. In the case of billionaires, their increase in wealth is mostly tied to stocks, which might crash at any moment. In the case of working folks, their increase is due to government benefits that they’re chewing through quickly and which might or might not get renewed. In both cases, in other words, the increase in income and net worth is something of a mirage.
Beyond that, I don’t have any big point to make. I’d certainly rather be a billionaire than a working stiff, even if their 20 percent increase is technically less than the 50-90 percent increase among the rest of us. That 20 percent represents a whole lot more money and is almost certainly more durable than artificial increases from government programs.
Still, those government programs have worked. They need to be renewed ASAP.