Billionaires And Wealthy People Are Just Getting Richer In The Pandemic
Billionaires have been getting richer in the pandemic.
While economies have been thrown into absolute chaos, the ultra wealthy have been accumulating cash at a rate the world has never seen before.
Amazon CEO Jeff Bezos had his net worth increase by 13 billion in just ONE DAY in July.
So what’s happening that’s allowing these billionaires to accumulate money like this, and what does this mean for wealth inequality in general?
While the rest of the population face record unemployment rates and serious financial instability, some of the world’s wealthiest billionaires have been doing extremely well.
In Australia, mining magnate Gina Rinehart’s worth has increased by 53% since the beginning of the year.
Tech figures like Bezos, Elon Musk, Bill Gates and the former CEO of Microsoft Steve Ballmer have added tens of billions to their net worths since the beginning of the year.
But between March and July, 100 US billionaires saw their total wealth increase by 214 billion US dollars.
Mark Melatos (University of Sydney): “By people having to isolate at home, they’ve had to invest in computers and other equipment and do their work online … so what that’s meant is that a very small number of companies – that were basically geared towards this kind of technology and to provide these kind of services – have made a lot of money.”
That’s Mark Melatos, he’s an associate professor of economics at Sydney University.
Melatos said that companies like Google, Facebook and Amazon would have eventually ended up with the same amount of wealth that they’ve got now, it just would have taken a lot longer in normal times.
MM: “The pandemic has basically turbocharged everything and kind of made them grow. What would have taken five years for them to grow they’ve done in 3 months.”
But it’s not just about the billionaires. Melatos said that they’re an easy distraction but we have to look at how wealth inequality is growing in general over this period.
The people who have suffered the most over this period in terms of employment are young and marginalised workers who have been booted out of jobs in sectors like service or travel. But for people who work in industries like technology and any jobs where you can work virtually, there hasn’t been the same impact.
MM: “Technological change was already leading us in that direction. There’s kind of this bifurcation where one group was slowly losing more or not gaining as much as another group that was gaining very quickly.”
Melatos told me that these changes that would have normally taken 5 or 10 years to happen have been totally accelerated.
Here in Australia, we haven’t seen the same extent of wealth inequality as other countries because we’ve got a pretty strong social safety net compared to other countries.
Melatos said that the JobKeeper and JobSeeker schemes have been really positive for keeping people afloat during the pandemic, but we’re still seeing some of the same wealth discrepancy as the US, where some of our richest are just getting richer.
He believes that’s got something to do with another side of government policy – and it’s something that needs to be addressed if Australia is going to tackle wealth inequality coming out of the pandemic.
MM: “Part of it is to do with monetary policy – central banks printing heaps of money and keeping interest rates really, really low. And they have to do that, it’s not like they had much option because the alternative would have been the economy blowing up. But the gains from this monetary policy are going to people who own capital, who own property, who own stocks … there seems to be one part of the economy partying like it’s the best of times and the rest of the world saying that it’s really bad.”
Wealth inequality was already a massive issue before the beginning of the pandemic, but that divide has only gotten starker.
And as much as the government has taken unprecedented action to make sure that Australians are supported, we should really be paying attention to how the wealthiest have been profiting throughout this crisis.