The COVID-19 pandemic has disrupted lives socially, economically and will forever change some families who experience lost loved ones. The lasting effects are going to likely remain for decades while future generations feel the impact of what not only America is experiencing, but the entire world.
During this time, it is important to try and keep a positive outlook. Capitol Hill and the White House are doing a good job trying to portray this positivity claiming we will get through it. This might be the case. Hopefully there will eventually be a good vaccine putting an end to the turmoil. This will save lives, but livelihoods may never be the same and the income gap between the rich and poor is only going to get much wider as a result of the pandemic.
The Gap Between Rich and Poor Was Already Big
Prior to the Coronavirus a growing gap between the wealthy and poor already existed. The separation between the rich and poor has increased substantially in the last 40 years. According to a Harvard study, in 1980 only about 12% of the American population lived in extremely poor areas. By 2013 over 30 percent of the population lived in underprivileged neighborhoods.
The income difference between rich and poor has been so prominent leading into the pandemic that America’s top 10 percent have 9 times the income as the bottom 90%, according to a study by UC Berkeley in 2018. The 0.1% of Americans have been doing even better by taking over 196 times the income of the population. The top 1% have almost doubled their share of income in the last five decades.
It should come as no surprise to most Americans the cost of living has been going up much faster than most people earn. Medical care, higher education and housing are just a few areas that seem to outpace the paychecks of most Americans. Personally, I can’t remember a time when something as simple as my internet service not going up in price each year.
Before the Coronavirus many Americans were already struggling. It was not uncommon to see numerous families working two or three jobs to put food on the table. Governmental financial relief for individuals and small business loans have been put in place. However, with a wide gap already in place between the wealthy and poor before the pandemic the current state of the economy is only going to accelerate and widen the gap much further.
How Is the Disparity Between Rich and Poor Going to Get Bigger?
Even with the optimistic outlook many leaders on Capitol Hill are showing that the economy will get up and running again, I am not so sure. Without a vaccine for COVID-19 is a large portion of the population going to feel comfortable in large gatherings? Are the restaurants, football stadiums and movie theatres suddenly going to fill up to capacity like they once did? The answer is likely no.
For people that work in many of the service jobs in America, such as restaurants and retail in large shopping malls, there are countless numbers that are still likely going to be laid off at some point in time as some businesses are not going to be able to hold on for the duration of an economic recovery.
The life savings for retirement or money intended for higher education are also going to be decimated during this time of high unemployment for people that have no choice but to use funds intended for other purposes. Generations are going to be hurt for families that will be left with nothing financially.
The Wealthy Are Better Positioned for a Pandemic or Major Economy Breakdown
Compared to most of middle America or almost everyone in poverty the wealthy are almost always better prepared for major issues that take place in the world. For the people that have money the pandemic can more easily be seen as an interruption to the market. The view is more of one for financial reasons than it is related to actual risk.
People that have no money see the pandemic as a bigger risk to their lives overall. Their incomes and health are in great danger. The result is long lasting changes that could last an entire lifetime.
The truth is the self-quarantine for the wealthy and the rest of America looks very different. People with an abundance of money have no real concern for a shortage of basic goods or a loss of income. They also already almost always have better medical care compared to everyday Americans.
Very wealthy people that must stay inside and not go to work will not have a difficult time getting any medications they need nor will they lose any sleep at night wondering if their health insurance will cover the costs.
I have to say that seeing many of the rich celebrities commenting and even complaining of their quarantine experience is aggravating and even angers me at times. These people that are stuck in their multimillion-dollar mansions with enough money in the bank to not worry about the future should be keeping their mouths shut.
It’s Time to Worry When the Wealthy Do Not Recover
During the pandemic not only do the wealthy have more money to get them through it, but they also seem to have access to testing when it is not available to anyone else. At a time when numerous Americans were struggling to get tested, the Utah Jazz basketball team was able to get over 50 tests administered.
The wealthy are positioned for better health care during a difficult time. They have the money and connections for the best doctors, medications and help. I have been saying during this time that when the rich and famous start to not recover from the Coronavirus it is time to really worry.
The Wealthy Will Recover
When the economy reopens and the Coronavirus is still infecting people the rich and famous will also have a very different lifestyle. One of privilege with private jets and sheltered gatherings with the means to have everything delivered.
The income gap will get wider as the wealthy will have the money to take advantage of a down economy. They will also have the resources to invest heavily when the financial markets start to make a recovery. When real estate starts to fall, they will pick property up at bottom level prices as well.
Everything that is currently occurring and will continue for some time caters quite a lot to people that have money and are least likely to be affected by a down economy. An example of this is the car commercials now airing during the pandemic. More are offering 0% financing for up to eighty-four months. They claim how they want to help. Read the fine print and nothing has changed from when the economy was booming. Only buyers with almost perfect credit will qualify. Not exactly the people likely to really need transportation now is it?
History does tend to repeat itself and the truth is many of the wealthiest prominent families in America got wealthy during hard times. The last depression was terrible for most people, but a few become very wealthy. The same is likely to occur this time.
The people that have money when there is a recovery from the current pandemic will be able to become even more wealthy. These families will also be less likely to have a need to tap into college savings funds or retirement to get through hard economic times.
The wealthy will recover and the gap will widen between rich and poor.
Middle America, the Poor and Their Pandemic with a Breakdown of the Economy
From school closures to having the option working from home, most other people when compared to the wealthy do not have the same options during a global pandemic. Furthermore, access to healthcare and necessities is not as easy.
Staying at Home is Not Always an Option
While the college educated have a better chance of being offered the chance to work from home, most everyone else will not have as big of an opportunity. This includes many of the service workers that rely on retail positions at the local mall or food workers at the neighborhood restaurant.
Service jobs now make up a large portion of the American economy. Thanks to the outsourcing for cheap labor and the closure of much American manufacturing, low paying service jobs have become the employer for much of America. Not to say that people in manufacturing wouldn’t need to stay home during a pandemic as well. However, manufacturing positions dollar for dollar have been proven to earn more money compared to service positions.
Maybe if more Americans had better paying jobs a larger number of them would be able to withstand a longer period of unemployment. Saving money and having an emergency fund would be much easier for numerous Americans with a bigger paycheck.
School Closure Problems
Communities with large amounts of poverty and families without much education really are hurt by closing schools. Children are not easily helped at home academically by family members and they can easily fall behind. Also, some families are put in a position of finding a substitution for looking after their kids while they hopefully can still work. Some will have to stay at home and sacrifice a paycheck for taking care of their children.
Access to Healthcare Is Much Different
As I previously mentioned, people without money do not have the same access to healthcare as the wealthy. The best doctors and healthcare providers in addition to the medical devices that might be required are reserved for the rich and powerful.
Take middle America John Smith and a famous movie star to the same hospital with the same medical condition and see who has better treatment. I don’t think it’s challenging to figure out. Medications can also be more accessible to the people that have money and the right connections.
While most of America has had a hard time keeping up with related healthcare costs including increasing deductibles and premiums for the lucky people that have health insurance, the rich can easily afford the costs. The issue of healthcare is not only different during the pandemic for the well-off compared to everyone else, but it is likely going to also be even much more separate once the crisis is over.
Top healthcare providers and even some of the experimental medications have been reserved for the wealthy always, but during the Coronavirus it is even more prevalent. Don’t look for a change anytime soon.
Middle America and the Poor Will Have a More Challenging Recovery Financially and From a Health Standpoint
Most of America and the worlds recovery from the Coronavirus both financially and from a health outlook is going to be very different, which will only increase the gap between the richest and those struggling.
Opening the Economy
Just in the previous few days there has been talk of opening the economy back up. Although it is hard to come up with an answer for solving the economic issues in America related to the pandemic, opening the economy at this time without a vaccine or a long-term solution will likely have dire effects. Furthermore, I am not so sure the expected fast recovery being communicated by many leaders on Capitol Hill will be the case. Their statements might be more for showing PR positivity.
It is understandable that people are hurting financially from the economy being shut down. However, opening businesses back up is going to cost lives right now without a good vaccine in place. Much of this cost will not be the lives of the wealthy, but the people that must work every day and in close proximity of others.
The rich, famous and powerful will have a better opportunity to keep sheltering at home when the economy is opened back up ahead of a long-term solution. This is going to keep them from the possibility of getting sick and destroying their families.
Who is going to really benefit from the economy opening back up? The wealthy business and corporation owners. Yes, everyday workers will gain from having an income again. Yet, it will be at the risk of contracting the virus. The real winners will be the wealthy and powerful. Wall Street, big business and the markets will have a chance to recover but numerous American workers will never recover.
Opening the economy without a vaccine and more answers is not a solution. People are not going to assemble at large gatherings. Workers that have not been laid off yet, will possibly be let go in a short amount of time. A struggling economy is going to remain for an unknown period. It will be better than a complete shutdown, but it won’t be the same prior to the pandemic.
The ongoing economic recovery that potentially could take decades will only increase the gap between rich and poor further.
Job Loss and Financial Ruin Will Weigh Heavily on the Health for Most of America
If you are not in the upper class with money and power, being unemployed and without the financial means to take care of yourself or loved ones can cause both mental and physical health issues. It’s not just the psychological effects, the stress of not having money to pay a mortgage or put food on the table can lead to other health related problems.
Money does not solve everything, but it sure can make a person sleep better at night. I always say that give me a problem with money and the same issues without having an income. Choosing to go through a difficult time without having to worry about money I and most other people would choose every day of the week and twice on Sunday.
Being out of work and broke with no positive outlook for a chance to get ahead can lead to depression or substance dependency. Loss of sleep, obesity and just extreme levels of stress can cut life short not to mention an increase in the need for healthcare. The issue is the people that will slide into this category will not have the funds for proper medical care.
During the economic road to recovery from the pandemic suicide rates and higher numbers of divorce are also not only possible, but expected by many health experts. Numerous unemployed workers are not going to immediately have a job and the strains of survival are going to weigh heavily.
The Americans that do not have the wealth to get through the difficult time will probably lose their dreams of homeownership, retirement, and a better future for their children. The lasting effects could remain for generations within a family. For this reason, the wealthy are going to have a much better opportunity to advance giving their descendants more opportunity than ever and the gap between rich and poor will only get wider.
Young Adults Will Have a Challenging Time
For a generation of young adults that do not come from prominent affluent families, they will almost certainly pay a price as they often do in recessions. The results are most often lower salaries, higher levels of unemployment and difficulties entering the job market. These things are in addition to the probability of higher taxes.
Rising taxes is not for sure, but with the economy the way it is I would say there is a good chance at some point in the future. States that depend on tourism and the printing of money to solve a problem won’t be able to be easily overlooked. I hope there is another solution other than an increase in taxes, but with the history of representatives on Capitol Hill it doesn’t look promising.
What Is Going to Be the Result of an Increase in the Wealth Gap?
Only time will tell what an even faster increase in the already large wealth gap between rich and poor will produce. This is nothing new as it has been increasing for some time. However, the Coronavirus pandemic is only likely to speed it up the wealth gap even further.
I am hopeful that there will be positive changes as a result of the pandemic. This could, although unlikely, change the outlook of representatives in Washington. With a bit of luck there could be someone that really wants to make a change for the better.
From an alarming standpoint Americans may at some point finally have enough of the rich getting rich while the middle class to the poor stand still from a financial perspective. Is a revolution or mass pandemonium a possibility? Many Americans and people around the world believe it just might be imaginable.
There is a reason firearms and ammunition sales have been at all-time highs during the outbreak of COVID-19. The fear of economic collapse and having a real need for survival set in for much of America. This fear is not going to dissipate anytime soon. With a growing disparity between rich and poor it’s only going to intensify.
Is There an Answer for Reducing the Wealth Gap?
I certainly do not have all the answers for making America a place where everyone has an opportunity and the inequality between rich and poor is not as wide as it has become. However, I do have some views that should not only make sense, but many might even be easily achievable.
First, America needs to look out for Americans. You have probably heard this on the news many times. I have said it for years now, but no one seems to ever listen. Now, people and even many politicians are beginning to understand the importance of making sure our country is safe, secure and prosperous for everyone.
Values, big businesses and Wall Street need to change. Some of these need to be changes made by Washington. I understand America is a capitalist society. But things have gotten out of control for greed.
More jobs need to be brought back to America and kept at home. Companies that do not want to do this should be taxed and regulated accordingly. Furthermore, much more manufacturing needs to be back in the United States. Not only for more job opportunities for Americans, but also for the reason of national security.
If there is anything, we should all know by now with the Coronavirus is that America is vulnerable to China. This needs to change.
The values of Americans also need adjustment. We have been trained to buy inferior imported throw away items for some time now. The result has been more money spent for continual replacements. It’s time to start letting the big corporations know that we no longer want to purchase the crap they are selling.
Americans need to start also supporting other Americans and not the countries that we import things from just to accumulate more stuff.
With some of the changes mentioned I am hopeful America can recover and bring back well paying jobs while providing a future for the country.
What are your thoughts on the growing income gap?
If you liked this article here are a few podcasts about America, jobs, and Greed.