Wall Street Journal reports the possibility of a “Richcession”
Even though a lot of economic doom has been predicted for the year 2023, the Wall Street Journal now claims that this economic hardship will hit hardest for the rich and wealthy, allowing the workers with lower wages to possibly benefit from the situation.
After the pandemic hit, Americans with higher wages reaped the benefits. For a lot of high-income workers, wages grew and billionaires only added more wealth to their name. According to Insider, billionaires across the globe experienced a 62% increase of their wealth, and U.S. billionaires earned trillions due to stock gains. Workers with lower wages got the raw end of the deal, with financial hardship and people losing their jobs. But now, that trend could soon change. Slightly.
Bigger companies like Meta and Twitter have announced that they’re cutting back on staff. And these companies are known to pay their employees well. Amazon recently reported to lay off over 18,000 workers. And the people who will be laid off are mostly high-earning employees as well. This means that the wave of layoffs will hit the wealthy hardest, compared to the low-wage workers. Another reason for financial losses for high-earning Americans, is the falling stock market. According to Linette Lopez, a reporter for Inside, “The stock market — for the foreseeable future — is royally screwed.” With almost ninety percent of stocks held by the top ten percent of the country, this could pose a threat for their wealth.
So are the low-wage workers of the hook? Unfortunately not. Ken Kim, senior economist at KPMG, told Insider that these workers usually don’t have a lot of savings to fall back on and with prizes still rising, low workers will still feel the recession. Fortunately, there is some good news. According to the Bureau of Labor Statistics, there are way more job openings than workers, meaning that the job market for low-wage workers is full of opportunities. And since February 2020, the wages for low-earning Americans have seen an increase. This means that unlike the high-earning part of the population, low-wage workers have the opportunity to switch to higher paying jobs more easily because of the current changes in the job market.
So even though the recession will provide a challenge for millions of people, the people with a lower income might not be the only ones suffering the consequences.
Also read: Wave of layoffs continues: Amazon to fire over 18,000 employees
Source: Insider, Aol., The Wall Street Journal | Image: Unsplash, Brock Wegner