Covid is Worsening Inequalities of Wealth and Income

Context: COVID pandemic looks set to extend into autumn and many advanced nations are preparing for the second wave of infections. The crisis has taken its worst toll on the poor, disadvantaged and marginalized.

Differential burden of the disease

• The disease and public policy response have most badly affected those least able to cope:

• In India, minority communities, Dalits and Adivasis have fallen deeper into debt and economic deprivation

• White-collar versus Blue collar: 

• White-collar workers were more easily able to self-isolate, physically distance, and work from home
• Blue-collar workers faced the double whammy of greater exposure to contracting the virus as well as a large economic hit if they were fired, laid off, or chose to stay away from work for safety’s sake.

• Paradox of fiscal and monetary policy:  

• Fiscal and monetary policy largely benefits big-time investors, who can invest in riskier but higher-yielding investments, including in emerging economies.

• Small savers, who rely on a savings account at a commercial bank, earn little interest on their savings and still pay high-interest rates on borrowing such as through lines of credit or credit cards.

• Differential access to the perquisites of high-quality private education

• Triple whammy: of the disease, loss of livelihoods, and the disorderly and sudden return-migration.

Conclusion

• Covid and the response to it have already worsened existing economic and social cleavages, and will worsen them further. The path to success for these new kinds of democratic networks will be arduous. 
• Global inequality may well end up at a peak unseen since before the advent of the modern welfare state in the late 19th century.
• Unprecedented global crisis tells us a lot about what a society is made of, not just on the surface, but much deeper down.