According to experts, the coronavirus pandemic has deepened economic inequality and expanded the racial wealth gap across the U.S. While the unemployment rate for white workers sits at 12.4 percent, the rate among black and Hispanic workers has gone up to 16.8% and 17.6% respectively. But while many poor Americans struggle to make ends meet, the wealth of the nation’s 614 billionaires has increased by $584 billion.
These top-end earners make most of their money on the stock market, which dropped earlier in the year but then rallied even as the situation with coronavirus got worse. “The pandemic crisis will widen the already worrisome levels of income, racial, and gender inequality in the U.S,” said economist Dimitri Papadimitriou. “This engenders an element of a vicious circle at work: not only will the pandemic and its fallout worsen inequality; inequality will exacerbate the spread of the virus, not to mention undermine any ensuing economic recovery efforts.”
A study from the London School of Economics U.S. Centre found that “states with greater income inequality are more likely to report more COVID-19 cases and fatalities.” Ironically, another recent study found that the poverty rate in the U.S. did not rise during the initial months of the pandemic due to expanded federal aid. But with many of the country’s increased unemployment benefits set to expire next month, the bottom half of earners could face even more economic hardship. The ultra-rich, meanwhile, could keep getting richer if the stock market continues to climb. “Some stocks, the tech stocks in particular, have done extremely well during the pandemic and of course lots of shares of Facebook and Amazon and others are owned by billionaires so of course their wealth has gone up because their stock has gone up in value,” said Columbia University professor Michael Graetz. “The bottom half of the American public doesn’t own stocks so they haven’t shared in those gains.”
Questions:
- Why has income inequality worsened during the coronavirus pandemic?
- Do you think the federal government should continue to offer increased unemployment benefits to American workers? Why or why not?
Sources: Catherine Thorbecke and Arielle Mitropoulos, “’Extreme Inequality Was the Preexisting Condition’: How Covid-19 Widened America’s Wealth Gap,” ABC News, June 28, 2020; Jason DeParle, “Vast Federal Aid Has Capped Rise in Poverty, Studies Find,” The New York Times, June 21, 2020.