It’s fair to say that the brutality of the coronavirus stock market crash caught everyone off guard.
But while we’re still licking our wounds, and as the coronavirus pushes millions into unemployment and a deep recession looms large over the global economy, it seems that America’s billionaires are becoming even richer.
According to a new report from the Institute for Policy Studies, the collective wealth of U.S. billionaires has rebounded by $282 billion during the peak of the lockdown from March 18 to April 10.
On top of that, roughly half of the world’s billionaires have seen their wealth increase since the beginning of 2020.
Yet no one has benefited as sizably as Amazon founder and CEO Jeff Bezos.
Recognised as the richest man in the world with an estimated net worth of $145 billion, Bezos has seen his wealth skyrocket by $25 billion in 2020 as homebound customers lean heavily on online shopping, grocery delivery and streaming. This wealth surge for one individual — greater than the entire GDP of Honduras — is unprecedented in the history of modern markets.
Since February 21, when markets more broadly started to sink, Amazon’s share price has risen by around 16%. “The closure of hundreds of thousands of small businesses is giving Amazon the opportunity to increase its market share, strengthen its place in the supply chain, and gain more pricing power over consumers,” the IPS report said.
The report reiterated the aftermath of the economic crisis of 2008: billionaire wealth tends to rebound from market crashes, and typically at a faster rate than the rest of the economy.
But some of the billionaires do more than rebound. Eight billionaires have seen gains of over $1 billion this year, according to the report:
- Jeff Bezos, Amazon founder and CEO: up $25 billion
- Elon Musk, Tesla CEO and SpaceX founder and CEO: up $5 billion
- MacKenzie Bezos, novelist and philanthropist: up $8.6 billion
- Eric Yuan, Zoom founder and CEO: up $2.58 billion
- Steve Ballmer, Los Angeles Clippers owner and former Microsoft CEO: up $2.2 billion
- John Albert Sobrato, Silicon Valley real estate mogul: up $2.07 billion
- Joshua Harris, Apollo Global Management co-founder and owner of multiple professional sports teams: up $1.72 billion
- Rocco Commisso, Mediacom Communications founder and CEO and owner of two professional soccer teams: up $1.09 billion
Looking back, in 1990 there were 66 billionaires in the U.S. who held a total wealth of $118.8 billion. The United States now has 630 billionaires, whose wealth totalled nearly $3.4 trillion, as of April 29.
Meanwhile, the 400 richest Americans, according to the Forbes rankings, have as much combined wealth as the poorest 64% of American households.
Roiling global markets have had a volatile effect on billionaire wealth. From 2019 to 2020, U.S. billionaire ranks increased from 607 to 614 people, but their total wealth declined from $3.111 trillion in 2019 to $2.947 trillion in 2020, according to Forbes.
But that may already be turning around. “This year’s Forbes report examines U.S. billionaire wealth as of March 18, 2020. By April 10, their wealth had surged to $3.229 trillion, surpassing the 2019 level,” the report noted.
Decades of tax cuts and billionaire-friendly public policies, have helped U.S. billionaire wealth soar over 1,100% between 1990 and 2018. Yet their tax obligations, as a percentage of their wealth, decreased a staggering 79% between 1980 and 2018.
“As we emerge from the pandemic with trillions in additional national debt, substantial tax increases will be inevitable. Our super-rich must bear their fair share of these increases,” stated the report.
That being said, some billionaires have in fact pledged vast chunks of their wealth to the global effort to tackle the coronavirus pandemic, helping millions of people across the globe whose lives have been thrown into crisis by Covid-19: $100m from Amazon’s Jeff Bezos for food banks, billions from Microsoft co-founder Bill Gates for a coronavirus vaccine, thousands of ventilators and N95 masks from Elon Musk, $25m from the Walton family and its Walmart foundation, to name a few.
The world is suffering a horrendous economic impact from the pandemic. If there was ever a perfect time for the world’s wealthiest to part with considerable amounts of their net worth and give back to society in the biggest way possible, it would indeed be now. And as we’ve seen, they can definitely afford to.