There is no doubt the COVID-19 pandemic unleashed an economic crisis that few Americans have seen before, but as we move toward the end of the year, the larger impacts felt back in April may feel different depending on where you fall on the wealth spectrum, due to several factors — one being your source of income and wealth. Economists call this a “K-shaped” recovery.
a look at how covid has impacted americans differently
A large area of concern is the dichotomy of the stock market versus the real economy, especially considering that 52% of the market is owned by the top 1% of American earners, according to Goldman Sachs.
Share of corporate equities and mutual fund shares held by those in the 99th to 100th wealth percentiles (top 1%)
Source: Board of Governors of the Federal Reserve System
What is a "K-shaped" recovery?
Continued growth but split sharply between industries and economic groups.
Source: Fact Set Data as of market close on September 18, 2020
stock market recovery: s&p 500 index, year to date
Because wealthy Americans have much of their wealth tied up in investments and tangible assets, such as real estate, their financial situation did not take a hit like Americans who are in the middle and lower classes, whose financial situation is directly tied to the economy.
There were also great disparities seen when it came to unemployment rates. Though unemployment hit historical standards in the past six months, the numbers are higher based on gender, race and ethnicity, and education level.
Even more, those Americans who are in the top quartiles were less likely to be unemployed during the pandemic.
CHANGES IN EMPLOYMENT BY INCOME QUARTILE
Source:
Opportunity Insights
diverging jobless rates: unemployment rates in 2020 compared to the national level in yellow
Source:
Bureau of Labor Statistics
Did you know?
Of the 623 billionaires in the US, the group saw an increase of $282 billion in three weeks during the pandemic,
according to a report
done by the Institute for Policy Studies. There’s no denying the pandemic has shone a light on the gaps that already existed between socioeconomic classes in our country — and the next few months, including the election and the policies to be changed or continued, can determine how the rest of the economic recovery may look for all Americans.
the well-th report
