How COVID-19 Became A 'Tremendous Windfall' For The Ultra Rich
TERRY GROSS, HOST:
This is FRESH AIR. I'm Terry Gross. While millions of Americans have lost their jobs because of the pandemic, the combined wealth of just 10 billionaires has increased by more than $127 billion since the beginning of the pandemic. Those billionaires include the principal owners of Amazon, Instacart, Walmart and Tyson Foods. My guest, Chuck Collins, has been writing about that and how the pandemic has increased income inequality in the U.S. Economic inequality has been his subject since he was 26 and gave away his inheritance. Collins is the great-grandson of Oscar Mayer, the founder of the meatpacking company famous for its hot dogs, the Oscar Mayer wiener, and the Wienermobile.
Collins is the director of the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits inequality.org. His books include "Born On Third Base: A One Percenter Makes The Case For Tackling Inequality, Bringing Wealth Home, And Committing To The Common Good" and the forthcoming "The Wealth Hoarders: How Billionaires Pay Millions To Hide Trillions." That book is scheduled for publication in March. Chuck Collins, welcome to FRESH AIR. It's a pleasure to have you on our show.
CHUCK COLLINS: Thanks for having me.
GROSS: Who are the billionaires who made the most money since the start of the pandemic?
COLLINS: Well, there's an overall trend. You know, 657 billionaires have seen their combined wealth go up a trillion since mid-March. But there's a couple that have just seen their wealth surge. Elon Musk seen his wealth go up almost 500%, 120 billion. Jeff Bezos has seen his wealth go up about 74 billion, an increase of 65%. And there's a guy, Dan Gilbert, who's the Quicken Loans founder, CEO, his wealth has gone up 600% - almost 38 billion. So it's a surge of wealth for some. You know, some have ridden the stock market. But others have just seen - they've kind of delinked from the amount of wealth they had before.
GROSS: So is the numbers that you're giving us, is that linked to the stock market? - because the stock market fluctuates so much. It can go up, you know, hundreds of points or go down hundreds of points.
COLLINS: Yeah. The stock market has been steadily going up as well. But some of these billionaires have just seen their wealth surge, you know, in the double digits or much higher than the market itself. I mean, four billionaires - Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg - now have a net worth of about 550 billion combined. And the whole group of U.S. billionaires now has a combined wealth of 4 trillion, which is double the wealth of the bottom half of all U.S. households, you know, in the United States. So they are seeing their fortunes accelerate during the pandemic.
GROSS: So some of the companies that have had their, you know, wealth increased vastly during the pandemic are providing services so many people are using, like Amazon and Instacart, helping people get what they need without having to go to stores where they could be exposed to the virus. In that sense, it's no surprise that they're doing really well during the pandemic. But is the money that the companies are making being reflected in the pay or the protection of the workers who are making these services possible?
COLLINS: No. And that's one of the things I think we've been trying to point out in our reports is that these companies are benefiting from having their competition effectively shut down during the pandemic. And they're seeing their own - you know, we're thankful that some of them are in business and able to provide, you know, online retail services and food delivery. But they're not really sharing those enormous gains with their workforce. So they're essentially sending their workers into kind of the viral line of fire while the owners are reaping enormous rewards in kind of a, you know, unprecedented circumstance.
GROSS: You have some recommendations for what the leaders of these companies could be doing to help protect their workers and acknowledge the risk that they're taking in providing the services that they provide.
COLLINS: Absolutely. I mean, they should be paying hazard pay. If you remember, at the beginning of the pandemic, there was a much broader societal recognition of the role of essential, front line workers, that they should be paid better, that they should have access to health care and paid family leave and hazard pay. And they should share in the wealth that they're creating for these companies. And as we go into this winter of, you know, more infections and more disruption, we should be reinstituting that. And if the companies can't figure out how to do that, then the government should play an important role in mandating that.
GROSS: So do you have any idea of how many workers at Amazon or Instacart or Tyson Foods have gotten COVID or have died from COVID? And do you think those companies could have done more to protect them?
COLLINS: Amazon, by its own admission, has had over 20,000 employees infected with COVID. Several of them have died. That was in October. I've talked to lots of Amazon workers, Amazon workers who work in warehouses, who say, you know, initially, Amazon didn't do enough to protect them. Now Amazon has hired, you know, 350,000 new workers. And it's wedging them into the same warehouses and infrastructure. And it's impossible to do kind of social distancing and proper protection. So there's just more Amazon could do.
Tyson Foods also has had, you know, over 11,000 employees infected. You know, the meatpacking industry, which is something our family knows something about, is a side-by-side worker, elbow-to-elbow industry. And it is very difficult. And that's another industry where - the Tyson family members have seen their wealth go up, you know, half a billion dollars in a couple months. And they can afford to spend more to protect their workers, their front line workers.
GROSS: If you had your way, you'd want to institute an emergency pandemic wealth tax on billionaires. What would your intention be if you had your way, which you don't? And I should say, the suggestion you're about to make is probably never going to happen in the near future.
COLLINS: I think it's important to talk about it even if our captured political system isn't capable of it. I think it's a commonsense idea. You know, you have a group of 650 people whose wealth has gone up a trillion dollars since mid-March. Why wouldn't we - like any kind of windfall profit during a time of war or crisis, we should tax away a portion of that gain and invest it in something that's going to help people, like the stimulus package or the recovery package that's recently been passed. One of the ways to pay for it is by taxing folks who've gotten a tremendous windfall in this moment.
GROSS: Jeff Bezos is a centibillionaire, which means he has over $100 billion. Several other people became centibillionaires during the course of the pandemic. Who are they?
COLLINS: Well, they are the the top four in the U.S., Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg. And there's one centibillionaire in France. But that's a new thing. I mean, we - you know, Jeff Bezos was the first centibillionaire, maybe, in 2017. It's a new trend. I mean, just for perspective, in 1983, there were only 18 billionaires in the United States. And now there are 657 today. So - and I don't consider that a good economic indicator. I think it's a troubling sign that too much of society's wealth and income is flowing upwards to that small group of people.
GROSS: Meanwhile, MacKenzie Scott, who used to be married to Jeff Bezos, gave away $6 billion in gifts to hundreds of organizations this year alone. What is her approach to giving away parts of her fortune?
COLLINS: Well, I think she's made a couple of really great first moves. You know, unlike a lot of these billionaires, she's not creating a kind of perpetual legacy foundation that's going to be around for generations, you know, where her great-grandchildren will be giving the money away still. She's moving the money directly to charities. She's enlisted a lot of advisers who are not wealthy, who understand the issues in underrepresented communities, communities of color. Her first wave of giving was primarily to racial justice groups. And this most recent 4.2 billion is mostly going to what we could call the works of mercy - you know, food banks and shelters and YWCAs and groups that are sort of on the front lines of helping people right now. And she's done it in a very low-key way. She hasn't created this vast, you know, infrastructure. In a way, she's - I think she's saying, come on, boys, let's go here, you know. This is an urgent moment. And she's stepping up in a way that, I think, embarrassing to the other billionaires who are sitting on their vast treasure during this pandemic.
GROSS: Another thing she's doing is giving away this money with no strings attached. Often when you get a grant, it's for a very specific purpose, and that purpose might not be what your organization most needs to survive. It might be just what's most fundable. But she has no strings attached. You don't have to pledge to use it for a specific purpose. You can - I think she's been saying, use your judgment. I trust you.
COLLINS: Yeah, she's communicating with a bit of humility that she doesn't understand all the issues. But basically she's communicating that I trust you to do the right thing with this money. And I'm not going to try to control it. And this is my first couple of big donations. And she's - I think we're going to see billions more moving in the next couple years. But what's striking is her response is in pitch to the times, you know? Short of giving hazard pay to Amazon workers - which is the source of her wealth, which I think she still should do - she's made a bold move to do direct-giving and really doing it in a way that a lot of - you know, many of these billionaires have foundations with, you know, thousands of staff, hundreds of staff who are part of the decision-making process. And they're giving away less money than she gave away in one year.
GROSS: I've heard you make an interesting comparison between the tax laws of the 1950s and the programs of the 1950s that help bring people into the middle class compared to the tax system that we have now.
COLLINS: Yeah. I mean, in a way, the tax system of the post-war - post-World War II era helped fund a shared prosperity economy. You know, we taxed the wealthy, and it was invested in infrastructure, access to education, help for first-time homebuyers - with a huge caveat, which is that it was racially exclusive. Many people of color were not able to benefit from the low-cost education and housing benefits. But it was a model for how we could have, you know, an economic policy that was about broadening middle class wealth and opportunity.
And really, since the late '70s, inequality has grown. And since the '80s, tax policy has kind of - we've seen massive reductions in taxes paid by the super wealthy, the wealthiest segments, to the point where last year, billionaires paid an effective tax rate, you know, lower than middle-income workers. So we've seen taxes go down for the most wealthy people in society.
GROSS: So let me reintroduce you here. If you're just joining us, my guest is Chuck Collins. He's the director of the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits inequality.org. We'll be back after we take a short break. This is FRESH AIR.
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GROSS: This is FRESH AIR. Let's get back to my interview with Chuck Collins, who's been writing about how the pandemic has widened the gap between the super rich and everyone else. He directs the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits inequality.org. He's the author of the forthcoming book, "The Wealth Hoarders: How Billionaires Pay Millions To Hide Trillions." That's scheduled for publication in March.
You've been working against economic inequality for most of your adult life. Your great-grandfather was Oscar Mayer of the meatpacking company, famous for its hot dogs, the Oscar Mayer Wiener. People might remember the Wienermobile, which was like a hot dog on wheels - a huge hot dog on wheels that would travel around. You inherited money when, I think, you were 21. Five years later, you decided to give it away. Why did you decide to do that?
COLLINS: Well, I think in my 20s, I had kind of a revelation, which was, you know, I'd been, like a lot of wealthy people, raised in a bubble - suburban Bloomfield Hills, Mich. Occasionally I would notice that there was the city of Detroit there with this incredible racial and economic divide. But, you know, I grew up in comfort and a kind of a narrative, if you will, that we're all well here, and we're all deserving of the wealth we have. And then I got this job in my 20s helping tenants who were facing eviction, trying to buy their buildings or mobile home parks and own them as residents. And I got very immersed in a lot of people's personal financial information. And then I would come home, and I would open up a statement - a financial statement - about my own wealth. And it would be like, oh, your wealth just increased 25% through no sweat of your own. So I had this bizarre, intimate front row seat in the 1980s to how wages were going down for a lot of people and wealth was rising for people like me.
And then I later worked in a refugee camp in El Salvador, which kind of gave me a window into the global inequality. And it was around when I was 25 or 26. I just couldn't come up with a theory or justification for the gap between my good fortune and the circumstances of these people. I just couldn't - all the, sort of, stories of deservedness and meritocracy and we're from a virtuous family - all that kind of rang not true. And so I just couldn't live with that contradiction. I didn't really want to be the beneficiary anymore of a system where some people were inheriting vast amounts of wealth and others were just struggling to survive.
GROSS: Did you save a financial cushion for yourself?
COLLINS: You know, I grew up in a sort of a Catholic worker, Dorothy Day culture, and I just felt like the wealth was almost a spiritual barrier to making my own way. Now, in retrospect - so the answer is no, I didn't maintain the large reserve - any reserve. I really wanted to make it on my own. That, I later realized, was ridiculous, that I had so much other forms of advantage, you know, growing up white and male and multigenerational sort of security and financial training and literacy and 101 other advantages that had helped propel me along so the money being just one of them. But, you know, I've kind of been focused on not depending on something that happened generations ago.
GROSS: I know that some people told you that you were being selfish in giving away your money because you were depriving the next generation of your family from inheriting the money that you inherited and inheriting those advantages that you inherited. What's your response to that?
COLLINS: Yeah, you know, within wealthy families, there are several cardinal rules, and one of them is don't touch the principle. Don't touch the corpus of assets because we're all just passing through, and if you're from a kind of dynastically wealthy family, your responsibility is to keep passing the wealth on so that the next generation - you know, my view is we shouldn't have dynastically wealthy families in the United States, you know?
We should - it should be shirtsleeves to shirtsleeves in three generations. That's the idea. And if a family is four or five generations into seeing their wealth accelerate, then it starts to undermine kind of core American principles of, you know, mobility and, you know, work in exchange for wealth, and in the end, you know, you start to see now these dynastically wealthy families in the United States that use their wealth and power to rig the rules of the economy to get more wealth and power. And that's the ultimate risk when you have great concentrations of wealth over generations.
GROSS: Can you be more specific about that point, about how the wealthy use the levers of power to keep their wealth?
COLLINS: Yeah. I mean, if you look at the list of billionaires, there's some fairly wealthy families. I mean, we're seeing the Mars candy family in the fourth generation on the Forbes list, you know, the Koch brothers, the Koch family, the Waltons of Walmart, the Cox family. There are these dynastic American families, and they're very politically engaged. And they use their power to give to political candidates, to think tanks and other groups to advocate for an agenda of low taxation.
And I got a lesson in this when I was in my 30s because there was a whole movement to abolish the inheritance tax, the U.S. estate tax. And, you know, I got involved in that working with Bill Gates's dad to coordinate a campaign to defend the estate tax, but what I noticed was on the other side were these wealthy, dynastic families who were using their clout to ensure that their great-grandchildren were still going to be billionaires. So it's not just about wealth. It's about the power that goes with it to shape the culture, including philanthropy, how they use their philanthropy and political giving to rig the rules of the economy.
GROSS: Are you finding that there's a culture of people who are wealthy who want to do good things with their money and who want to have progressive tax policies, people who, perhaps, you're working with?
COLLINS: Yeah. There's actually a network called the Patriotic Millionaires, which is a couple hundred, you know, high-net-worth business leaders and millionaires and billionaires who are actually publicly lobbying for fair tax policies to eliminate these kind of hidden wealth systems because they understand on some level that extreme inequality is undermining the whole society. It's undermining the quality of life for everybody, including the very wealthy.
Now, during this pandemic, I think it's even more complicated because the wealthy have socially distanced, economically distanced even more, so that gap, that understanding, that proximateness that's required to have empathetic society is kind of eroded by the fact that people are not in connection right now. But there are plenty of wealthy people I talk to every day who are saying, how can we reverse these extreme inequalities, rebuild some kind of social safety net and not keep going down this road toward economic Jenga and precariousness?
GROSS: Chuck Collins, thank you so much for coming on our show. I wish you a healthy 2021 and a year better than this year has been.
COLLINS: Wishing you and everyone else the same.
GROSS: My guest has been Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits inequality.org. After we take a short break, we'll hear from Jeff Tweedy of the band Wilco. He has a new book about songwriting and his approach to writing songs. I'm Terry Gross, and this is FRESH AIR.
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