Notes on inequality

The pandemic has increased inequality between workers. Lockdown policies enacted by many governments to suppress the spread of the virus have particularly hurt the working poor in developing countries. For these workers, who depend on a daily wage and casual work, the inability to travel to their places of work has led to a significant loss of earnings, with no protection and high levels of insecurity about the future of their livelihoods.

Consider a street vendor selling vegetables in the streets of Delhi. As the pandemic hit India and the government issued stay at home orders, the street vendor suddenly found herself out of a living. In contrast, for the professionals who are able to work from home, the pandemic has had a more limited effect on their earnings.

The vast majority of workers in developing countries are in informal jobs, without access to the types of support that workers in rich countries get from their governments, such as furloughing schemes. While many developing countries have increased the scale of social protection measures in response to the pandemic, this is clearly not enough. Nor do these measures reach the majority of the poor.

The pandemic is contributing to an acceleration in technological change, helping certain businesses stay open digitally and enabling many people work from home who were previously unable to. Those countries whose citizens have access to the internet and are well educated will gain from the move to online technologies such as Zoom for virtual meetings.

So for workers in Singapore and Taiwan, the shift to online technologies will be a boon. But countries that are still lagging in the digital race, including many in Sub-Saharan Africa, will fall further behind.

While both men and women must stay at home due to lockdown policies, women are more likely to take care of children and domestic chores, leading to an unequal distribution of household duties within the family. Women across the world are much more likely to hold jobs in retail and hospitality where remote working is less possible, and which are particularly hit by lockdown-induced job losses.

The closure of schools and day nurseries may force women to withdraw from employment. In times of economic stress, girls are often the first to be withdrawn from school (or to miss classes) as they substitute for working mothers. With many schools closing during the pandemic, girls are at a greater risk of not returning once they reopen. This effect on their education will, in turn, lead to worse long-term employment and earnings prospects.

Coronavirus has hit at a time of weak levels of international cooperation.

Excerpted from: ‘Five Ways Coronavirus Is Deepening Global Inequality’

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