Sickening disparity: COVID-19 and inequality

The pandemic demolished many traditions, everything from cultural gatherings to birthday parties and even job promotions: people have had to accommodate to the whims of the virus. Yet there is one tradition that COVID-19 has promised to uphold, the convention of an increase in inequality following a global outbreak of disease. 5 years after every pandemic that has hit the world this past century, the Gini coefficient- a measure of inequality- has worsened, rising by around 1.25% compared to pre-pandemic levels. Each iteration of a previous pandemic has taken a liberty in its choice of tools and this version has wielded a baneful concoction of unfair work practices, sloppy government policies and unequal education to sledgehammer the most vulnerable whilst the privileged remain sheltered in a cocoon of affluence and entitlement.

For the disadvantaged in society government economic policy can offer a much-needed shade from the eye of the storm, a haven from the uncertain and indifferent forces of the markets. Unfortunately, for many ordinary people, government policy within the UK has proved to be lacklustre at best. A common response to a recession is to drive down interest rates in an effort to bolster borrowing and spending in the economy, whilst disincentivising saving. Such type of expansionary monetary policy is a broad stroke at aid and it often benefits the well-off far more than those that really need help. It comes with the precondition of being able to easily access credit and take advantage of lower rates to borrow, but for many living in poverty, with no collateral to offer, this isn’t an easily available option. Even those that are richer and have the option to be able to borrow upon these schemes often choose not to. As the Economist reported, the richest people haven’t been borrowing much more and thus the biggest impact of central bank policies have been to inflate asset prices. Stocks, bonds and home prices have been inflating with central bank stimulus all around the world. In the UK, house prices have been rising at a faster pace than they were in 2007, something that benefits those that are privileged enough to already own homes, whilst hurting many who see inflated rents and are often even locked out of the market due to not being able to afford the rising down payments (often a percentage of house prices).

In general, living costs in the UK are rising, with energy prices and food costs, in particular, reaching new highs. The same loose monetary policy that has been a boon for the rich has ensured that inflation has reached a 30-year high. Fiscal policy has been equally insufficient with a lot of the benefits rolled out in the pandemic such as the furlough scheme and rise in benefits pay weekly, has now been pulled back at a time when the poorest are facing not only 5.4% inflation but also rising national insurance payments- all as a result of pandemic induced policies. The 20 pound cut in Universal Credits, in particular, motivated by a yearning to fill in holes in the government’s Covid burnt balance sheet, will not only ensure the poorest get poorer but that they are also put off from seeking employment due to the related expenses of searching for work (bus fare, broadband etc) as well as the reduction in benefits for each extra pound earnt. All this and pay freezes for many low earning public sector employees at a time when big bosses have seen pay bonuses, the number of billionaires in the UK has increased by a quarter and the reported 1.3 trillion pound rise in household wealth in the UK went to the richest ones. Government policy amidst the pandemic has proved by far one of the biggest contributors to rising inequality amongst the have and have nots.

Another one of the most pressing inequality is that found in work practices, something that has been embossed into the very fibre of the labour force long before Covid-19 made headlines. As a response to the pandemic, many governments channelled a paternalistic force and put their populations into lockdown, bar ‘key’ or ‘essential’ workers. The closure of businesses and sudden drop in demand left many employers with a dilemma that consisted of choosing between laying off whole swathes of their workforce or keeping them on the payroll whilst they couldn’t legally come to work. For employers of many white-collar workers, the happy medium was found in the form of ‘remote work’, a sensation that hustled the dawn of many technological shifts as well as making ‘Zoom’ a very successful company and simultaneously a common verb in major vernaculars. The technology and shift to work from home became so ubiquitous that many reported feeling ‘zoom fatigue’ and struggled to find a balance between their work and home life. This mingling has disproportionately impacted women, forming the basis for this glaring gender inequality. In the UK women are reported to take on two-thirds of the 40 hours+ of extra childcare work as a result of pandemic, which leaves them tremendously overworked and could negatively impact their careers. Any time they do get for work is 50% more likely than men to be interrupted by family concerns. This may hinder their careers and give women added stress, further impacting the gender pay gap. Even as universal work from home has been rolled back, the choice of flexible working hours and locations as a result of the pandemic may entice many women who have faced rising costs of childcare and little maternity leave. This would further set back their work in comparison to men, as women choose to sacrifice their professional lives due to inadequate support in raising a family.

Looking beyond the ivory towers of highly educated employees and well-paying jobs, women have also been unduly impacted in a lot of blue-collar jobs. These industries have already been worse hit by lockdowns, service and manufacturing sector workers can’t work from home and thus were either laid off or furloughed- holding onto government lifelines that weren’t here to stay. A UN report showed that of the millions around the world being forced into extreme poverty as a result of the pandemic, women make up a larger share. This is especially true for those aged 25-34, the age at which many would be expected to raise families, where 118 women have been rendered destitute in comparison to 100 men of the same age. This goes against the expectations based upon past recessions which saw men more heavily impacted because they held jobs in industries such as manufacturing which were more vulnerable to busts. Yet this time around those that work in the service sector were first to be hit, which is made up largely of low paid women. Yet it is simultaneously fair to say that the trend of inequality in labour force demographics extends beyond women into the binary of pay. 30% of the households that were living on low incomes before the pandemic in the UK said that they would be unable to feed themselves should their main source of income disappear. Under the volition of the pandemic that is exactly what has happened, with the greatest number of employees in shut down sectors coming from the lowest decile of individual earnings- those making the least were 7 times more likely to be affected by such changes and become jobless. Post pandemic the popularity of work from home schemes have further increased the risk that many of the industries that saw huge layoffs, would permanently disappear. As such while women are the big losers as a result of changes in the job market, those that were already low paid were still the hardest hit, regardless of gender. Thus, the pandemic has widened the gap between men and women, as well as that between those on high vs low incomes in certain sectors.

Inequality in pandemic education can thus be seen as the final straw that broke the disadvantaged household’s back. Already living in a world that deprives the poorest students of the amenities offered to those that go to state schools in richer areas or can afford the eye-watering fees of a private education, with Covid-19 impoverished students are further robbed. The ‘home-learning’ pandemic is a disease that only kills the penurious. The ‘digital divide’ ensured that students that didn’t have access to reliable broadband or a gadget couldn’t access the little online education that their school could muster to provide, while those that went to private or well-off schools had access to more interactive online activities as well as private tutors and doting parents who didn’t have to worry about financial instability. Within the UK a return to in-person learning has thus been welcomed, however, there are worries that the long term impact of inadequate learning for the worse off during the pandemic would soon reveal itself. In a knowledge economy that demands highly educated employees, this leaves many students at a disadvantage due to their inability to wield as much intellectual capital, thus further increasing future inequality.

In essence, the pandemic’s biggest fault has been to exacerbate existing divides and pull on wounds. Before Covid-19 struck, the world had just begun to make progress on plugging gaps in educational attainment, gender pay gap and economic inequality among the poorest and richest. But efforts have been half-hearted and often actively undermined by many seeking to further their own sect. The biggest takeaway from these years of pandemic induced economic turmoil should be that we need to devote meaningful time and resources to firmly bridge the gaping lesions of inequity within our economy and social framework. The trauma of this setback must be thus met with tireless effort in the opposite direction, towards a world of increased equality.