The super rich did indeed get richer in early weeks of coronavirus pandemic
The claim: America’s super rich have seen their wealth rise by $282 billion in three weeks of pandemic
An article published on The Mind Unleashed, a website that seeks to "disseminate and inspire out-of-the-box thinking" claims the country’s super rich have seen their wealth rise by $282 billion in 23 days during the pandemic.
The article has been shared more than 17,000 times from the site's Facebook page.
It attributes the enormous figure to a recent report of the Institute for Policy Studies, a progressive think tank based in Washington, D.C. “Billionaire Bonanza 2020” analyzes the factors impacting income inequality in the country, summarizes the political influence of the billionaire class and recommends reforms to address the trends.
The news coverage of the explosion of wealth among billionaires has been widespread because of the contrast with working Americans experiencing staggering layoffs. The Guardian, Reuters and Fast Company reported on the phenomenon. According to NPR, more than 30 million Americans applied for unemployment in six weeks.
Where $282 billion comes from
The Institute for Policy Studies report uses data from the Forbes Global Billionaire List, the Bloomberg Billionaire Index, the Federal Reserve’s Survey of Consumer Finance, a survey of the income and demographic information of American households that is conducted once every three years, and the Distributional Financial Accounts, a “quarterly measure of the distribution of U.S. household wealth since 1989.”
IPS cites $282 billion as coming from data from the Forbes Global Billionaire List, which gathers the information from various sources to create its comprehensive catalog of the world’s billionaires.
“We value a variety of assets, including private companies, real estate, art and more. We don’t pretend to know each billionaire’s private balance sheet (though some provide it). When documentation isn’t supplied or available, we discount fortunes,” the Forbes webpage reads.
To calculate the $282 billion number, IPS researchers also used Forbes’s Real-Time Billionaires List, which updates billionaires’ change in wealth daily. But this tool doesn’t publicly display the archived data from past days, Omar Ocampo, researcher at the Institute for Policy Studies and co-author of the Billionaire Bonanza 2020 report, explained in an email.
“On April 5th and April 10th, after the markets closed on those two specific days, we applied a filter where Forbes' website only displayed U.S. billionaires. We then retrieved the data and added up their wealth/net worth. The sum for April 5th was $3.017 trillion and for April 10th it was $3.229 trillion,” Ocampo said.
The Forbes Global Billionaire List recorded U.S. billionaires’ wealth at around $2.9 trillion on March 18. When subtracted from the April 10 total at $3.229 trillion, the difference — or net growth — comes out to $282 billion in 23 days, a roughly 10% increase.
IPS attributes the growth to billionaires’ use of tax cuts, tax exemptions and offshore tax havens. An analysis by the Guardian also points to a government’s bailout meant to aid small businesses despite large businesses reportedly benefiting.
“We've seen this happen before, in the recovery from the 2008 economic meltdown — which, for most Americans, was never complete,” Chuck Collins, director the Program on Inequality and the Common Good at the IPS, wrote for CNN. "Indeed, most US households went into this pandemic with a lingering economic hangover from the 2008 crash. Only the top 20% of US households had fully recovered the wealth they had prior to the Great Recession."