Billionaires Were Never Going to Save Us
By Stacy Lee Kong
Image: Shutterstock
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I’ve been thinking a lot about billionaires recently, you will be completely unsurprised to hear. (I have written a lot about wealth and privilege in past editions of this newsletter.) This is largely due to Richard Branson and Jeff Bezos, who both went on joyrides to Earth’s upper atmosphere in the past couple of weeks. Many pundits characterized their competition as a new space race that will kick off a new era of space exploration… though really, it's more likely to be an era of space tourism reserved for the ultra-wealthy.
But I haven’t only been thinking about Branson, Bezos and their fellow overly wealthy white men. LeBron James also became the first active NBA player to achieve billionaire status this week, joining other pop culture figures including Jay-Z, Tyler Perry, Kanye West, Oprah, George Lucas and several Kardashians (um, probably). And I have to admit, pre-pandemic, I might have thought that was cause for celebration. But instead, I had a sinking feeling, because I have come to believe no one should be a billionaire—even if I’m a fan of their creative output or basketball skills or charity work.
What “there are no ethical billionaires” actually means
It’s easy to understand Jeff Bezos as unethical, right? His wealth spiked to $214 billion during the pandemic, mostly on the backs of the workers his company exploits. This is all very well-reported: Amazon’s productivity standards mean its employees must behave like “robots,” workers themselves say. (This includes drivers who are forced to pee in water bottles so they don’t slow deliveries down.) During COVID, warehouses didn’t always stick to safety protocols, which led to outbreaks of the virus among so-called ‘essential workers,’ who make between $16 and $18 per hour in Canada… and PS, that only sounds okay until you remember that Bezos makes about $8 million per hour.
This is why “many [Amazon] workers have spent the past few years arguing that they aren't paid the equivalent of the value they produce,” according to NBC. What’s more, “Amazon pays far less than many other companies in a highly unionized industry and actually tends to push down wages in the sector when it opens new fulfillment centers. For example, The Economist found that when Amazon entered Lexington County, South Carolina, annual earnings for warehouse workers dropped from $47,000 to $32,000.” (Also, paying more than minimum wage doesn’t necessarily mean you’re paying a living wage, which would be $19.50 in Vancouver, $20.69 in Calgary and $22.08 in Toronto—and even higher in some other Canadian cities.)
But anyone who hoards enough wealth to have a net worth of a $1 billion is at the very least benefiting from unfair systems, and in many cases also actively exploiting people. When Bumble CEO Whitney Wolfe Herd took the dating app public in February, the 31-year-old became the world’s youngest self-made female billionaire. A lot of people on Twitter were really excited, considering it a win for feminism—especially since, unlike Bezos, she made that money from Bumble’s valuation, not by underpaying workers in order to maximize profits. (When its stock closed at $70.55 on its first day of trading, her 12% ownership stake in the company became worth $1.5 billion.) But that doesn’t mean she became a billionaire in an ethical way.
According to a 2019 Forbes investigation, Bumble’s then parent company, Badoo, likely used common tax evasion strategies to maximize its profits. And former employees say Badoo was also “hostile and discriminatory toward women.” There was no explicit mention of a wage gap, but it’s not unreasonable to wonder if one exists at a company that made hires based on appearance, allowed discriminatory comments about racialized employees and required women to “massag[e] the egos of the founder [Russian billionaire Andrey Andreev] and senior managers who held influence with him” as a way to rise through the ranks. (Andreev, who Wolfe Herd acknowledges as Bumble’s founding partner, sold his ownership stake in the app a few months after the article was published.)
And yes, that goes for LeBron James, too
James' net worth is partially due to his salary—$330 million since he was drafted—media business and acting career, as well as endorsements, merchandise and licensing. Reportedly, he earns upwards of $100 million per year thanks to his partnerships with AT&T, Beats, Blaze Pizza, GMC, Nike, PepsiCo, Rimowa and Walmart. He also has ownership stakes in the Boston Red Sox, Liverpool FC and wellness company Ladder, and he owns 19 Pizza Blade franchises. But he’s not directly exploiting anyone (though he’s being paid by companies that definitely are) and as ProPublica reported earlier this month, his income tax rate in 2018 was three times what L.A. Clippers owner Steve Ballmer paid. So, when I first heard the news, I kind of wondered if LeBron James is just like, a really good saver.
This… was naïve. As journalist Khaled Diab put it last year, “there are no billionaires, as far as I can ascertain, who made their billions fair and square, without employing ethically dubious practices. These practices may include underpaying or overworking staff, monopolising [sic] the productivity gains delivered by their workers, exporting jobs, stifling competition, and even exercising monopolies or near-monopolies.” I'd add an even more pedestrian reason why James was able to amass so much money, more money than you or I can even really conceptualize: a failure of government.
According to an April 2021 paper by University of California Berkeley professors Emmanuel Saez and Gabriel Zucman, American “billionaires pay low effective tax rates because they can defer taxes on their capital gains [the profits from the sale of an asset, like property or shares of a stock] for decades or forever as income tax on gains is due only upon sale of assets. U.S. billionaires now own $4.25 trillion, out of which $2.7 trillion are gains that they haven’t paid tax upon yet. During COVID, billionaires’ untaxed gains increased by $1.25 trillion.” (The rules are slightly different in Canada.) The capital gains rule applies to everyone, though the rate you pay depends on your tax bracket. But since most billionaires' wealth is held in financial assets like stocks, it disproportionately benefits them. So yes, it was good that James declared $124 million of income in 2018 and paid a federal income tax rate of 35.9%—but it’s also very likely that much of his net worth just… wasn’t taxed at all.
Which is, by the way, perfectly legal! And loopholes like this exist for rich people everywhere—which is why we shouldn’t characterize individual billionaires, or even the existence of billionaires, as personal or moral failures. I mean, for some people, it probably is exactly that. (I don’t think Bezos or Mark Zuckerberg are good guys, you know?) But the bottom-line reason billionaires exist is those extremely low tax rates, as well as other policy decisions that prioritize economic ‘growth’ over societal investments. And to be clear, that is exactly what governments are doing. As Dan Riffle, a senior counsel and policy adviser for Alexandria Ocasio-Cortez, explained in a 2019 interview, many politicians talk about inequality by saying their concern is “not how much money Jeff Bezos has or Bill Gates has, but whether or not every American has access to affordable health care, education, housing, and basic human rights. And if those things are in place, then [they] don’t really care how much somebody else has. Well, those things are not in place, and they’re not in place because Bill Gates has $107 billion and Jeff Bezos has $120 billion. Those two things are inherently intertwined, and you cannot fix one without the other.” (Emphasis mine.)
And no, billionaire philanthropy isn’t enough
This is also why relying on billionaires to donate money toward social infrastructure doesn’t work. First, they’re just not donating enough. Earlier this year, Dan Price, the CEO of credit card processing company Gravity Payments, who cut his own salary to guarantee every one of his employees made at least $70,000, told MarketWatch that people may think billionaires don’t need to pay taxes because they donate money, but “in reality, the amount they donate is a fraction of what they would pay if their tax rates were in line with the working class.”
Also, that money comes with strings attached! Gates, for example, is able to shape public health discourse through the sheer amount of money he donates. His philanthropy also functions as a veil that obscures his less civic-minded decisions. He’s now the biggest private owner of American farmland, for example, which will allow him to play a “monopolistic role… in determining [America’s] food systems and land use patterns,” as Nick Estes, a member of the Lower Brule Sioux Tribe and assistant professor in the American studies department at the University of New Mexico, argued earlier this year.
The billionaire discourse isn’t about demonizing money
None of this is to say that I think that it’s wrong to strive for financial success, or even wealth. You know that TikTok sound that goes “fuck capitalism but I’m the child of immigrant parents and they didn’t fly across the world for me to be broke so I gotta be a capitalist, sorry guys”? I laughed so hard when I first saw it, because I totally felt seen. I’m an immigrant whose family came here to build a better life for us, and I feel a lot of responsibility to repay that sacrifice by taking care of my family financially. And, I admit, my idea of a ‘good life’ also includes luxuries like delicious food and travel and pretty clothes and a beautiful home. But let's not pretend that you can't have these things—all of these things, forever, in the best quality and most obscene quantities—without being a billionaire. You absolutely can. (Hello, Dolly Parton has been doing it for years)
It really seems like people believe the next logical step after making a million dollars is making a billion dollars. And I kinda get why—we are forever discussing billionaires, and more of them seem to be popping up every month, which sends the message that it's possible for anyone to become this wealthy. But that's absolutely not true. There are 540 billionaires in the U.S. and 47 in Canada. Globally, there are fewer than 3,000 people with this much wealth, and statistically, none of us will ever join that group. Because no one becomes a billionaire by being really good at their jobs, or by working really hard, or by killing their salary negotiations. It's literally impossible to accrue that much money through your own labour.
But billionaires, and even significantly less wealthy people, benefit when we forget that. In fact, they count on it. Because if we think we can become billionaires ourselves, we're more likely to 'side' with them in conversations about taxation, or celebrate when someone we like gets to join this club. Maybe that's also why so many people saw Bezos' and Branson's space race as a scientific achievement, when it was actually just an ad for wealthy people to take 10-minute flights to the very bottom of outer space.
Which, in a way, is the perfect metaphor for billionaires in general: no real progress, just maximizing profit.
And Did You Hear About…
This really smart essay about the symbolic meaning of meat and potatoes in pop culture.
Vox’s reporting on how Shein is dominating fast fashion—and changing the model entirely.
This fascinating breakdown of fashion illustrator and influencer Garance Doré’s pandemic—which has included copious traveling, complaining about (and potentially flouting) COVID restrictions and most recently, flirting with anti-vax attitudes.
The ongoing beef between Darius Cooks, Angela Davis, a private chef and food blogger known as The Kitchenista, and Food Network’s Sunny Anderson. Apparently, he’s a restaurant owner and food personality who took money from customers to repair their credit history?!
This Twitter thread about an Airbnb listing for a not-at-all haunted (read: super haunted) mansion.
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