Economic Crisis? Not For Everyone.

Back in January, in the before times, Kelly was hunting for a house in Baltimore, where she works in marketing. The 27-year-old was newly married. She and her engineer husband found a dream home — a three-bedroom, brick-fronted row house with a fenced-in backyard and a roof deck — but it was just out of their price range.

Then the pandemic hit and the economy cratered. Millions lost their jobs. Not Kelly, who asked that HuffPost not publish her last name. In fact, now she could afford the house. Mortgage rates were at record lows, as the Federal Reserve tried to juice the economy. She and her husband locked in at 3.1%, meaning the payments were now affordable.

Kelly and her husband are doing all right in coronavirus times. They can work from their new spacious home. They adopted a dog, a German Shepherd-Lab mix. They’re cooking a lot. She knows they’re lucky. They’re trying to support local restaurants, she said. 

“I have friends who’ve been laid off or furloughed,” Kelly said. “We’re counting our blessings and hoping this ends.” 

There’s an immense economic and public health crisis underway in the United States — but not everyone is feeling the pain equally. The country’s high rates of income and wealth inequality mean that a lot of folks, primarily white, are riding this one out relatively unscathed.

Well-to-do parents are paying to put their kids in private schools or “learning pods,” even as public schools struggle to reopen safely and some parents quit their jobs to make things work. Those who can afford it are scooping up new homes. There’s a huge demand for pools; contractors are busy doing home renovations. Others are saving cash because COVID-19 is keeping them home, and they’re spending less on vacations and nights out. 

HuffPost spoke with a handful of upper-income professionals about the inequality gap. Many said they felt a bit squeamish about their good fortune.

There are jobs, too. Unemployment rates for low-wage workers are down 16% from where they were before the pandemic, but employment is down only 0.5% for those earning more than $60,000 a year, according to an analysis from Opportunity Insights, a team of economists and policy analysts based at Harvard University. 

HuffPost spoke with a handful of upper-income professionals about the inequality gap. Many said they felt a bit squeamish about their good fortune.

Leslie, a 42-year-old lawyer who lives with her husband and two school-age kids just outside Dallas, is thriving this year. She just got a new job that pays $200,000 a year and was able to buy two new cars: a Ford Fusion hybrid for her and a F150 pickup truck for him. They also got a trailer they’ve used for road trips, since air travel is out at the moment. They just moved into a spacious four-bedroom house in a nice, planned community.

“I’ve been having this guilt with everything that’s been going on,” she said. “When we’re having success I was excited about it, and then I see my friends posting on Facebook who were out of work. It just made me feel guilty for doing well financially.”

She’s been donating a lot of money to food pantries and local organizations, and clicking on a lot of GoFundMe pages.

“Guilt probably is the best word for it,” said Michael, a 30-year-old data scientist who lives in Chicago with his wife, an IT consultant. Their combined income is about $350,000 a year. He points out that they’re able to work from home, so they’re at lower risk for getting sick. Beyond having to stay home and missing out on seeing friends and family, they really haven’t been affected by COVID-19. 

“It’s not like we had some special foresight where we knew it was coming and prepared ourselves,” he said. “We both sort of fell into positions where we were able to be unaffected.”

I’ve always marveled at the size of vacation budgets vs. charity and political contributions with the rich.
a wealthy businessman

All recessions exacerbate inequalities, but the coronavirus recession has perhaps been even more stark. As an unprecedented number of families are struggling to afford food, there are plenty of high-earning Americans doing just fine. 

And unlike in the Great Recession of 2008, there’s little to worry about in their 401(k) statements. The stock market has recovered — and then some — from its dip in the spring.

In March, when it looked like the U.S. was headed for a catastrophe we’d all feel equally, Congress passed a massive stimulus bill with wide support. Now, as it become clear that some groups are being hit much harder by the virus ― Black people dying at higher rates, low-wage workers facing higher unemployment ― the appetite to do more seems vastly reduced. Lawmakers haven’t been able to pass more stimulus, allowing expanded unemployment benefits and an eviction moratorium to expire. Ultimately, this could lead to an economic catastrophe everyone will actually feel. 

Billionaire Bonanza

As the booming stock market has kept the merely affluents’ retirement funds steady, it’s been a jackpot for the super-rich. 

Amazon founder Jeff Bezos just saw his net worth top $200 billion. Tesla founder Elon Musk just hit $101 billion. In fact, the world’s 500 richest people gained $809 billion this year — up 14% since January, according to Bloomberg

“If you came into this with wealth, that wealth allows you to solve all variety of problems that if you don’t have that wealth, you can’t,” said Greg Leiserson, chief economist at the Washington Center for Equitable Growth. 

Amazon founder Jeff Bezos at the JFK Space Summit at the John F. Kennedy Presidential Library in Boston last June. His net worth recently topped $200 billion, even as the U.S. economy is in a recession and many people are struggling to make ends meet. 

Billionaires didn’t seem to feel quite as much guilt over their quality of life as their well-off — but not nearly as well-off — middle-class counterparts.

HuffPost sent an email to an Amazon spokesperson, asking if Bezos felt any guilt about having hundreds of billions of dollars at a time of high unemployment and food insecurity. A representative from Amazon didn’t answer the question, but pointed out that Bezos has made many charitable donations over the years, including $100 million to Feeding America in April to support food banks and another $25 million to a Washington state group doing pandemic relief. That represents about .06% of his wealth. 

That’s more than most billionaires are giving. A wealthy businessman who asked to remain anonymous said he’d been doing his best to help out with relief efforts, but that his peers have resisted donating time and money proportionate to their fortunes. 

Too many people live in a bubble, and this crisis has absolutely highlighted and exacerbated that,” he said.

High net worth individuals, or people who mostly make money from the money they already have, have donated at least $1.6 billion for COVID-19 relief, according to Candid, a group that tracks donations made public. 

That amount includes a $1 billion from Twitter CEO Jack Dorsey. The remaining $600 million comes from 37 other individuals in the U.S., including celebrities Oprah, Ryan Reynolds, Kelly Ripa and Pink. 

To put that in perspective, America has nearly 800 billionaires. (There are 75 billionaires who live in San Francisco alone, and who haven’t done much for coronavirus relief.)  Of course, some of those billionaires could have donated anonymously or through foundations. The Bill and Melinda Gates Foundation has put $300 million toward COVID-19 relief, according to the data from Candid.

Still, there are a lot of super-rich folks sitting out on the sidelines.

“I think most people don’t do much. Or they give away $50,000 and think that satisfies their obligation,” said the wealthy businessman. “I’ve always marveled at the size of vacation budgets vs. charity and political contributions with the rich.”

When asked if he felt guilty about having so much at a time when so many have so little, he said no.

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