The Wealth Disparity: How Billionaires Thrive Amidst Economic Hardship

As we are mired in the pandemic of the coronavirus, we all know a lot of people out of work. Service and hospitality industry friends and family are all out of work. It totals more than 22 million Americans – 45% of Los Angeles County – for instance, that have been laid off or furloughed. One sector of our population has seen their net worths increase greatly at the same time as so many are applying for unemployment and/or payment protection program loans for their businesses. Who are they? The billionaires, of course! American billionaires have seen their net worth increase by about 10% or $280 billion compared to what they had at the beginning of March. Currently, American billionaires are worth an estimated combined $3.229 trillion as of April 10, which is a significant jump from the $2.9 trillion they were worth on March 18.

The stock market did crash at the beginning of the spread of COVID-19, and the shutdowns in various cities and states have been implemented. Jeff Bezos had a bit of a fall in net worth when that happened, but he didn't have to fret about it, and he’s already rebounded to see his net worth increase by about $25 billion. Zoom founder and CEO Eric Yuan saw his net worth jump due to the increase in work-from-home as people use his video conferencing platform.

The Trump presidency has been advantageous for American billionaires. Since Donald Trump took office in January 2017, American billionaires have seen their collective net worths increase from $2.7 trillion to nearly $3.3 trillion today. This growth is likely a benefit stemming from Trump's tax reform law, formally known as the Tax Cuts and Jobs Act, which was geared towards the wealthy. Many mid-range paid individuals ended up paying more in taxes than many of the country’s wealthiest, which raises questions about fairness in our tax system.

Economic Disparity: A Closer Look

The old adage that it takes money to make money has proven true for the past 30 years. Since 1990, the wealth of American billionaires has grown by 1,130%. That’s 210 times faster than the growth of the median wealth of the U.S. in the same 30 years. Does this seem fair? It certainly does not. Consider the growth of the three richest people in the U.S. since 1990.

In 1990, Jeff Bezos hadn’t yet founded Amazon and wasn’t on the list of the wealthiest Americans. He was just four years out of his undergraduate studies at Princeton and had just started working for D.E. Shaw in Manhattan where he met his ex-wife Mackenzie. So no estimate of his net worth back then, but he was likely making low six figures. Today, 30 years later, he’s worth an astonishing $140 billion.

The Rise of Bill Gates

Back in 1990, Bill Gates had a net worth of $2.5 billion. Microsoft had just gone public four years before, and the rise of the personal computer industry was still ongoing. Since 1990, Gates has seen his net worth fluctuate but has never dropped below being a billionaire. Gates became the richest person in the world for the first time in 1995, with a net worth of $12.9 billion, which is roughly equivalent to $22 billion in today’s dollars.

Warren Buffett's Wealth Journey

In 1990, Warren Buffett had a net worth of $3.3 billion. As the 90s rolled on, Buffett saw his net worth increase more than five times from $3.3 billion in 1990 to $16.5 billion in 1996. By 2010, it was $47 billion, and by the end of the summer of 2015, Buffett had a $67 billion net worth. Today, he stands at $75 billion.

The Future of Wealth Accumulation

If we look ahead to 2050, it’s likely that the world's richest person will have a trillion-dollar net worth, particularly if the explosive growth of the past 30 years – and even just the past six weeks – is any indication. The stark contrast between the struggling middle class and the burgeoning wealth of billionaires raises pressing questions about economic policies and wealth distribution.

As we navigate through these challenging times, it's essential to consider the implications of this wealth disparity. Understanding the dynamics of wealth accumulation can help shape future policies aimed at creating a more equitable economic landscape for all Americans.