LANSING, Mich. (WLNS) — According to an article in the Washington Post last month, Amazon founder Jeff Bezos saw his net worth grow by $70 billion last year.
Tesla founder and internet darling Elon Musk saw his net worth grow by $132 billion, making him the second richest man in the world.
Meanwhile, countless small businesses have had to shut their doors as the coronavirus has refused to slow down. Which raises the question, how did both of these things happen in the same year.
“That’s a question that a lot of us have,” said Michigan State University economics professor Charles Ballard. “I mean increasingly it feels like the stock market is disconnected from the reality.
“Certainly when you see small businesses closing but Jeff Bezos doing fabulously well, there’s a lot of reason to believe wealth has become more unequal, perhaps the most unequal in American history.
Ballard said while the pandemic has exasperated this trend, the gap between the top one percent and everyone else has been growing for decades.
“A huge story is this gigantic u-turn, where in the 1940’s and 50’s income and wealth became much more evenly distributed than it had been before,” Ballard said. “And then in the last about 40 years, since about 1980 or so, we’ve become much more unequal and we’ve returned to the very large degree of inequality that we had 100 years ago.”
Bezos and Musk have largely seen their net worth grow because their companies’ stock price has shot up, but how does the stock market continue to do so well when the rest of the economy is struggling?
“People who work in nail salons, hair salons, bars, restaurants, those are groups that have been hurt more than others and those are not high-income folks.
“My own personal preference is I think that we in America have gone down the inequality road awfully far and I’d like to see us reverse that,” Ballard said.
Ballard said as a state, Michigan has pretty closely followed much of the nation.
The Mitten State has been hit pretty hard over the years in the middle-class, Ballard said.
Ballard said he likes to think that Michigan “invented” the middle-class years ago with all of their auto jobs, but many of those have disappeared.
Below is a graph that Ballard shared showing the trends of income and wealth distribtuion in the United States since 1913: