More than 3 million Americans lost their jobs in the single week ending on March 21st, as the economy went into full-on lockdown due to the coronavirus pandemic. Yet, while many Americans are anxiously waiting for their check to come from the $2-trillion stimulus package, the media are reporting that the United States has lost 500,000 millionaires in the COVID culling. And they aren’t likely to be getting any cash from the government.
Just a few short months ago, at the beginning of the year, the U.S. boasted 11 million millionaires out of the 47 million globally, according to Credit Suisse. That’s almost a million more than the total population of Greece, for instance.
However, according to research firm Spectrem Group, the number of US households with a net worth between $1 million and $5 million plummeted in the last three months. Some 500,000 have fallen below this income level, getting booted from the millionaires club.
The number of $25 million-plus American households fell by almost 10%, from 196,000 at the end of 2019 to 178,000 now. Those with a wealth of $5 million to $25 million were cut by 5% from 1,520,000 to 1,440,000 in the same timeframe.
U.S. stocks suffered the fastest fall from all-time highs to bear market on record. According to Federal Reserve statistics, the top 1% of households owned 53.5% of equities and mutual fund shares at the end of 2019.
The toll has been felt most among the richest of the rich, too. According to the Bloomberg Billionaires Index, the world’s richest 500 people lost $1.3 trillion since the start of 2020, equal to 22% of their total net worth. For the 180 Americans on the ranking, they have lost $433 billion.
Jeff Bezos of Amazon lost more than $18 billion over the past month.
Microsoft’s Bill Gates, the second richest man in the world, has seen $3.8 billion wiped off his wealth since the outbreak.
Philanthropist Warren Buffet has lost $5.4 billion.
Facebook’s Mark Zuckerberg has waved goodbye to $4.2 billion, and Larry Page, CEO and co-founder of Alphabet, was also out of pocket $3.3 billion.
For the world’s 2,153 billionaires, 607 live in the U.S. This year alone, America gained 21 billionaires--more than a 50% increase compared to 2010.
But these same billionaires have plenty of cushion.
Collectively, top executives sold $9.2 billion in their own firms’ stocks before the markets plunged to new lows on March 20th. That kept them from losing another $1.9 billion, according to WSJ.
But enough feeling bad for millionaires and billionaires. America faces grave instability with the rest of the population that is now dangerously unemployed and for whom a $1,200 check isn’t going to resolve much.
While some retailers, such as Walmart and Amazon, have announced plans to hire hundreds of thousands of people, economists are already sounding the alarms bells. It’s too little, too late.
The three million Americans who filed for unemployment represent nearly five times more than the previous record of 695,000 set in the early 1980s. Now, some experts are expecting to see the unemployment rate hit 13% ,or more. But it could be far worse than that.
US Federal Reserve analysis warns that unemployment may soar past 32%. The Fed also warns that the coronavirus freeze on the economy could cost 47 million Americans their jobs.
Others speculate that a whopping 67 million jobs are at high risk of unemployment.
For comparison, the U.S. lost a total of 8.6 million jobs in the entire 2007-’09 Great Recession.
US President Donald Trump has made the strength of the economy his political rallying cry and the basis for his re-election bid.
Recently, Trump said he wanted to loosen restrictions on activities and open the economy back up by Easter. That came with extensive criticism, however, and on Monday, Trump bowed to pressure and extended federal social distancing guidelines until April 30th.
So, with another month of economic lockdown, and the millions more Americans who will lose their jobs, stability is a serious question.
By Josh Owens for Safehaven.com
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