2 December 2020   Leave a comment

The COVID-19 pandemic has accelerated one of the more unfortunate aspects of the US economy–the continued redistribution of wealth from the poor to the rich. The Economic Policy Institute (EPI) has just analyzed the most recent data on income inequality in the US and the results are genuinely disturbing. According to the report:

“….the top 1% and the very tippy top, those in the top 0.1%, were the clear winners over the longer-term 1979–2019 period:

the top 1.0% saw their wages grow by 160.3%; and

wages for the top 0.1% grew more than twice as fast, up a spectacular 345.2%.

In contrast, those in the bottom 90% had annual wages grow by 26.0% from 1979 to 2019.

“This disparity in wage growth reflects a sharp long-term rise in the share of total wages earned by those in the top 1.0% and 0.1%.

Perversely, the pandemic has made the tendency much more pronounced, as the owners of capital have benefited from many aspects of the various lockdowns while what we call “essential” workers have seen their employment opportunities vanish. Common Dreams provides important background to this trend:

“While U.S. income inequality is the worst among most-developed nations, its wealth inequality is even more egregious. According to a 2017 report (pdf) from the Institute for Policy Studies, the three wealthiest Americans at the time, Jeff Bezos—who has since become the world’s first multicentibillionaire—Bill Gates, and Warren Buffett, collectively held more wealth than the bottom 50% of the population, or some 160 million people. 

“Experts say it is no accident that the period in which the yawning, ever-growing chasm between rich and poor began coincides with the rise of corporatist and neoliberal economic policies—colloquially dubbed ‘trickle-down economics’—implemented by conservative leaders including British Prime Minister Margaret Thatcher and President Ronald Reagan in the U.S. 

It is unfortunately easy to identify specific individuals who have benefited from this process:

Statista quantifies how much money we are talking about: “Illustrating the gulf in financial inequality in the U.S. today, the analysis states that U.S. billionaires own $4 trillion, 3.5 percent of all privately held wealth in the country. Billionaire wealth is now twice the amount of wealth held by the bottom 50 percent of all American households combined, approximately 160 million people.”

This situation is politically dangerous. We have already seen the discontent from the Great Recession of 2008-09 lead to an increase in a political dynamic that boosted Trump into the Presidency. That dynamic led to a willingness to believe that certain groups–immigrants, African-Americans, and Muslims–were the causes of economic deprivation. If the job losses of the pandemic, which totaled 22 million at the outset, are not recovered quickly, the political consequences could be severe.

Posted December 2, 2020 by vferraro1971 in World Politics

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