Before the coronavirus pandemic struck, the Caldwell family of Kansas City was just making ends meet. Derrick was working as an electrician; Tiana was training office workers; and A.J. was looking forward to playing football after school.
CBS News business analyst Jill Schlesinger asked Derrick, “If you go back to end of February, beginning of March, were you busy? Was it slow? What was going on for you?” “I was busy – and then it was just, like, everything just stopped,” he replied. You might say COVID-19 infected the family’s finances. Their jobs dried up, exposing a stark reality: they had no safety net. Tiana Caldwell said they had not been able to save money before the pandemic hit. “So, just paycheck to paycheck, right?” Schlesinger asked. “Yeah,” Tiana said.
Even before the coronavirus, nearly 4 out of 10 American adults said they would have difficulty covering a $400 unexpected expense. Derrick said they’ve gotten help from family and friends. The Caldwells also got help from KC Tenants, a Kansas City housing rights organization. “The pandemic has only laid bare inequities that have existed in our country for a long time,” said the group’s founding director, Tara Raghuveer.
It’s nothing new: Last year the Census Bureau found income inequality was at its highest level in 50 years.
Consider this: two-thirds of the total wealth in this country is owned by the richest 5%. At the same time, more than 38 million Americans are living in poverty, and it’s projected that up to 54 million people might not have enough to eat this year.
Economic inequality is the subject of a new documentary, “Capital In the Twenty-First Century,” based on the surprise bestseller by French economist Thomas Piketty. He has surveyed centuries of economic upheaval. “The pandemic illustrates, you know, I think, the need to change the economic system and to get in the direction of the more equal and more equitable and more sustainable model of economic development,” Piketty said.
More than 29 million people are now collecting unemployment benefits, while at the top end of the economic ladder, during the first three months of the pandemic, the net worth of the more than 600 billionaires in the U.S. grew by about 20%.
Jeff Bezos, the owner of Amazon, saw his net worth increase by $43.8 billion in the first months of the pandemic.
“Those who have the least advantages, the least economic opportunities, are going to bear the largest burden of any kind of downturn, whether it be an economic downturn, or whether it be a public health crisis,” said Valerie Wilson, director of the liberal Economic Policy Institute.
Wilson sees not only an economic divide, but a racial divide: “COVID-19 has magnified these racial disparities that we have known about for decades. Because of the persistence of many of these disparities, we can almost predict how any crisis is going to go.”
For example, Black households have just 10% of the net worth of white households; for Hispanic households, the figure is just 12%. Wilson said, “The combination of COVID-19, and it being such a universal problem – not only in this country but around the world – has really challenged us to sort of question the idea of whether or not we really are all in this together.” But not everyone sees income and wealth disparity as negative trends. “At the end of the day, capitalism is just trying to maximize, optimize, grow everything as fast as it possibly can – that’s how people get rich,” said Edward Conard, a former partner at Bain Capital and a scholar at the conservative American Enterprise Institute. He has written about “The Upside of Inequality.”
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