For many Americans, the fallout of the novel coronavirus pandemic gets bleaker by the day. More than twice as many people are unemployed in the U.S. right now than there were at the height of joblessness after the 2008 recession, with more than 26.5 million Americans filing for unemployment since the end of February. Across the country, landlords are still evicting tenants who can’t pay rent, even in cities that have temporarily halted evictions, and housing lawyers fear a coming “tsunami” of homelessness.
More pain is likely on the way as many industries bleed out. As many as 7.5 million businesses are in danger of closing, including one in every five restaurants in the country could shutter permanently because of the outbreak, and some federal officials worry that unemployment could go as high as 30 percent.
But the pandemic hasn’t been bad for everyone. This month, the Institute for Policy Studies (IPS), a progressive think tank, released its annual “Billionaire Bonanza,” an assessment of the wealth and political power of the world’s billionaires. As a class, they’re doing astoundingly well right now. In the first four months of 2020, the net worths of 34 American billionaires have increased by at least tens of millions of dollars each.
America’s billionaires have been greasing the system in their favor well before the pandemic started, with a decades-long campaign to lower their taxes while giving less of the profits back to their employees. In 1990, according to IPS, the total combined wealth of U.S. billionaires was $240 billion. As of April 15, that number had swollen to $3.2 trillion—more than the GDP of the UK—with $300 billion of just in the first three months of 2020. Meanwhile, according to the Economic Policy Institute, between 1979 and 2018 worker productivity—how much value a worker produces in their job—increased by 70 percent, but hourly wages have only inched up by 11 percent. That difference has just been pocketed by employers, shareholders, and CEOs like Jeff Bezos and Elon Musk. And as the IPS explains, billionaires “do not rely on income from the work they do to generate additional wealth,” meaning their excess wealth, on its own, yields more returns on investment.
In addition to taking in a higher percentage of profits, between 1980 and 2018, the amount of taxes that the super-rich paid relative to their wealth decreased 79 percent. And even rank-and-file millionaires are poised to reap even more benefits thanks to the coronavirus. The emergency relief that Congress has passed is riddled with giveaways to the super rich, to the tune of tens of billions of dollars according to the New York Times, including some tax breaks only for companies making more than $25 million a year and capital gains tax cuts for households making more than $500,000 a year. And while the 2017 tax cuts, another massive wealth transfer from working people to the already-rich, had some restrictions on how many tax breaks a single person could receive, Republicans are also using the relief package to strip those meager protections.
The Joint Committee on Taxation, a nonpartisan arm of Congress, calculates that 80 percent of the tax cuts in the coronavirus relief legislation will go to people making more than $1 million annually—just 43,000 people—and will cost $90 billion in 2020 alone. Even the relief that’s nominally supposed to go to small businesses is flowing into the bank accounts of well-financed corporations—a fund meant to keep businesses with less than 500 employees afloat was designed in such a way that huge restaurant chains and a multi-millionaire Trump campaign donor with a large hotel chain are free to collect tens of millions of dollars from it.
For eight American billionaires, their fortunes have ballooned by at least $1 billion during the pandemic. Eric Yuan, for example, is the CEO of the video-conference platform Zoom. Since the outbreak began in China, Zoom’s usage worldwide has grown by 1,900 percent, and Yuan’s net worth has more than doubled to $7.57 billion in just the last three months. Tesla and SpaceX CEO Elon Musk has made $8 billion since March, reportedly by partnering with medical equipment companies, while rural hospitals across the U.S. are going broke and closing down, even as coronavirus is spreading out from urban centers.
No one has made out better than Jeff Bezos, the CEO of Amazon and the world’s richest man. Since January 1, 2020, his personal wealth has increased by $25 billion, slightly more than the GDP of Iceland or the equivalent of 25 Michael Bloomberg presidential campaigns. Chuck Collins, one of the study’s authors, called this surge “unprecedented in modern financial history.” And as Amazon stock has soared more than 30 percent this year, CNN wondered if it might be the “ultimate coronavirus-proof stock.”
The windfall for Amazon, now worth just shy of $1 trillion, is thanks in large part to so many people being unable to leave home to shop and a rash of small business closings across the country. But its business practices have been drawing heated criticism. While Bezos has made more money in three months than is possible to spend in a human lifetime, warehouse workers say the company isn’t doing enough to keep them safe. Amazon officially asks its 400,000 warehouse to practice social distancing at work, but that’s nearly impossible for masses of workers when rushing through facilities at break-neck pace or crowded shift changes. The novel coronavirus has spread through more than 50 Amazon warehouses, and several fired workers claim they were targeted for voicing concerns about on-the-job exposure to the disease.
The government is also taking steps to keep businesses afloat—the Federal Reserve, for example, has announced it will buy almost unlimited amounts of debt to make sure corporations have more cash on hand. Thanks to that, the cruise company Carnivalsecured $6 billion on April 1. After that, CEO Arnold Donald, who reportedly made $11 million in 2019, told CNBC that the company could stay in business until 2021 even with absolutely no revenue.
By contrast, people who rely on paychecks to survive are in dire straits. According to a recent Morning Consult poll, 34 percent of workers making less than $50,000—including many restaurant and retail workers—report that they only have enough savings to survive for three months if they lost their job. Another 18 percent report that they have no savings to fall back on at all. And while Congress has approved some expanded unemployment benefits during the pandemic, those are insufficient and not going out fast enough. Treasury Secretary Steve Mnuchin, who made the bulk of his $440 million fortune by ruthlessly taking advantage of foreclosures during the 2008 housing crisis, has said that those benefits should last people 10 weeks—provided they can successfully apply for them. So while Musk and Bezos reap in billions in revenues and even more tax breaks, a Pew Research Center investigation found that fewer than three out of every 10 Americans who qualified for unemployment benefits in March actually received them.