JPMorgan CEO Jamie Dimon referred to the coronavirus pandemic as a “wake up call,” one that has shed light on the inequalities of the American economy. In a memo to his team, Dimon expressed hope that the country would use this time to rebuild the economic structure in a more fair way.
COVID-19 Deepens America’s Wealth Disparity
A historic, decade-long bull market ended abruptly in the United States in early March, as the impact of the COVID-19 pandemic began its global spread. In the few months since, the economy has crumbled, leaving 36 million Americans out of work. While the national unemployment rate now sits at 14.7%—the most severe such rate since the Great Depression—a whopping 40% of Americans who identify as working class are now out of a job.
Dimon on Economic Inequality
Dimon, an investment banking billionaire, surprised many by drawing focus to the economic inequality that has become even clearer since the onset of the current health and financial disaster.
“This crisis must serve as a wake-up call and a call to action for business and government to think, act, and invest for the common good and confront the structural obstacles that have inhibited inclusive economic growth for years,” Dimon wrote in a memo to his staff.
“It is my fervent hope that we use this crisis as a catalyst to rebuild an economy that creates and sustains opportunity for dramatically more people, especially those who have been left behind for too long,” the CEO wrote.
Dimon says that addressing systems of inequality that “inhibit the creation of an inclusive economy and fray our social fabric” will make everyone better off. He claimed, “An inclusive economy—in which there is widespread access to opportunity—is a stronger, more resilient economy.”
The line of thinking in Dimon’s memo parallels the school of thought championed by liberal philosopher John Rawls. According to Rawlsian theory, an economy should only be measured by the wellbeing of its least well-off person, as opposed to an average of everyone’s income or utility. Otherwise, a single exorbitantly wealthy person could conceal the situation of masses of low-income individuals.
A Rawlsian economy would be one that uplifts those who had been left behind before the current pandemic, allowing them greater access to opportunity, and making the system work better for all participants.
Walking the Walk
Dimon is now putting his money where his mouth is, ensuring that JPMorgan does not contribute to a disproportionate recovery. The bank is offering delayed payments and refunding fees across business, home-lending, and credit-card accounts.
JPMorgan is also working to prop up small businesses. As part of the Paycheck Protection Program, the bank has given $30 billion to over 250,000 small businesses. And while the PPP has availed itself to businesses with as many as 500 employees, half of the companies that JPMorgan has assisted have fewer than 5 workers.
And while even the most conservative forecasters now predict it will take years for the economy to fully recover, JPMorgan has already proven its commitment to overseeing that the new system is a fair one.