11 October 2020   Leave a comment

The COVID-19 pandemic continues to amplify the growing wealth inequality in the US. The process seems to be fairly clear: low income earners have seen their jobs and their hours disappear while high income earners have enjoyed record gains in the value of their sticks. According to Bloomberg:

“The Fed estimates the top 10% of U.S. households hold 69% of the country’s wealth, or $77.3 trillion, up from 60.9% share at the end of the 1980s. The very richest Americans are almost entirely responsible for that gain. The top 1% held 30.5% of U.S. wealth in June, up from 23.7% in late 1989. The bottom half’s share, meanwhile, has fallen from 3.6% to 1.9%.”

The Huffington Post provides more detail:

“The rich got richer this year despite the COVID-19 pandemic — while people struggling financially found themselves in even more dire straits. COVID-19, which has killed more than 210,000 Americans, has disproportionally hurt people of color, older people, women and workers in low-paying jobs.

“The 50 richest people increased their wealth since the beginning of 2020 by nearly $339 billion to almost $2 trillion, according to the Bloomberg Billionaires Index

“The poorest 50% of Americans — about 165 million people — hold just $2.08 trillion of net worth, or 1.9% of all household wealth, according to Federal Reserve statistics.

“More broadly, the top 1% of Americans currently have a combined net worth of $34.2 trillion. They hold 30.4% of all U.S. household wealth and more than half of the equity in corporations and in mutual fund shares, according to the data.

“The wealthy and corporations were already sailing along thanks to a massive tax cut from the administration of President Donald Trump in 2017. As a result, the nation racked up a record deficit, which hit an all-time high of $3 trillion in the first 11 months of the current budget year.

The inequality has had a dramatic effect on the different generations in American society with the youngest cohort, the Millennials, facing the worst distribution of wealth in American history.

The implications of this divergence for the political system are ominous. The US Middle Class was the bedrock of what has been called the American Dream”–a metaphor for all in the world who aspired to a better life. Sadly, as the graph below from the Pew Research Center, the American Middle Class seems to be disappearing.

Posted October 11, 2020 by vferraro1971 in World Politics

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