Tuesday, September 22, 2020

The Haves and the Have-nots

 Federal Reserve figures show that household net worth went up 6.83 percent in the second quarter, reaching nearly $119 trillion.

The data also reflected a "rebound in stocks and housing," but, as Bloomberg reported, " 45% of the U.S. population doesn't own equities and about one-third of households don't own a home."

According to (pdf) a survey released this month from NPR, the Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health, more than half of households in the nation's four biggest cities—Chicago, Houston, Los Angeles, and New York City—reported facing serious financial problems during the public health crisis.

Robert J. Blendon, executive director of the Harvard Opinion Research Program at the Harvard Chan School, warned that "it's going to get worse because there is nothing for the people we surveyed who earn under $100,000 a year to fall back on."

In August, consumer finance company Credit Karma conducted an analysis of nearly 20 million members in the U.S. and found that they have a total of $45 billion of medical debt in collections, which averages to about $2,200 of debt per member. Medical debt has been growing further during the pandemic, rising 7% from the end of last year and just over 3% from when the pandemic started.  Experts expect it to continue to rise in the coming months since there's a 180-day lag before unpaid medical debts can show up on consumers’ credit reports

"This is a lot of money when you consider nearly half of Americans don't have $400 saved in case of an emergency," says Colleen McCreary, chief people officer at Credit Karma. "What's worse, this number is expected to rise in the coming months as Americans begin sorting out their finances in the aftermath of the pandemic."

The nation's billionaires, meanwhile, have been enjoying fatter pockets over the past six months. An analysis released last week by Americans for Tax Fairness and the Institute for Policy Studies (IPS) showed that 643 billionaires saw their wealth surge $845 billion, or 29%, since the Covid-19 crisis began six months age.

The redistribution of wealth to the richest 1% over the past 45 years is hard to comprehend. In a Time report on a study by the Rand Corporation, it is estimated that the $50 trillion shift from the bottom 90% to the top 1% would pay every working American an additional $1,144 a month, every single month, year after year. If wealth distribution since 1975 had continued in the same manner as between 1945 and 1975, today's $35,000 salary would be over $60,000. It's little wonder that so many Americans are lashing out at the broken system.



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