Will the U.S. economy enter a “richcession” in 2023? And how bad will it be?
These are not the questions economists have been asking because they’ve been too busy worrying about a recession.
But this time, any downturn in the economy could really be different.
It could end up being a richcession, the trending term coined by Wall Street Journal reporter Justin Lahart earlier this week to describe a recession that disproportionately hurts rich people.
Typically recessions hurt poor people and the middle class the most, while the Musks, Bezoses and Zuckerbergs experience “an inconvenience”.
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In fact, in the earliest days of the pandemic, the super-rich got richer, amassing more wealth as the health crisis worsened. Meanwhile, food banks were stretched thin from the unprecedented demand resulting from widespread layoffs.
Is there going to be a richcession?
Lahart argues that a richcession could be brewing because household wealth for those at the top didn’t grow as much as it did for those at the bottom, percentage-wise, over the course of the pandemic.
Wealth on the bottom grew as a result of stimulus checks and other government stimulus money as well as wage increases to try to keep up with inflation and attract workers in a historically-tight labor market. Wealth at the top, meanwhile, is stagnating because…
