The latest report published by Oxfam has yet again confirmed the rising trend of inequality globally, a phenomenon that has been accelerated by the COVID-19 pandemic. It has also made all the more evident the need for decisive actions by governments if combating inequality is to be anything more than a slogan.
What does the report say?
According to the report published by Oxfam on January 25, the world has seen an unprecedented rise in inequality during the pandemic period. The report titled “The inequality virus: Bringing together a world torn apart by coronavirus through a fair, just and sustainable economy” pitches for increased social expenditure by all governments in order to help poor and vulnerable sections cope with loss of income which may take years to return to pre-COVID levels.
The report prepared by Esmé Berkhout, Nick Galasso, Max Lawson, Pablo Andrés Rivero Morales, Anjela Taneja, and Diego Alejo Vázquez Pimentel argues that the idea of COVID-19 being an economic leveler, of it affecting all sections of society equally, has been proved to be a myth. In reality, COVID-19 has widened existing social and economic inequalities of class, race and gender in all corners of the world.
A part of the study was a survey of 279 renowned economists across the world on the economic implications of the pandemic. More than 87% of respondents believed that the pandemic has led to a major increase in income inequality and more than 55% thought that it will lead to increased gender inequality.
The report argues that though the rich have already bounced back to their pre-COVID levels of income, and in fact have become richer, the poor may take at least a decade to recover lost incomes.
Though inequality has been rising in different parts of the world for long, the period between March and December 2020 was the first time on record when it increased at the same time in virtually every country and at an unprecedented rate.
The report mentions how the fortunes of the world’s top billionaires, which suffered an average loss of 30% during the first few months, returned to their pre-COVID high within just nine months. These billionaires, in fact, added trillions of dollars to their combined wealth during the same period.
The report highlights that the increase in the overall wealth of just 10 billionaires in the world is so great that it is enough to pay for all vaccination across the world. That wealth is also enough to prevent anyone anywhere on earth from falling into poverty due to emergencies such as COVID-19.
This has happened even as the pandemic has created the worst jobs crisis of the last 90 years with millions unemployed or half-employed .
Already marginalized are the worst affected
Existing social and economic inequalities have resulted in the virus having an unequal impact on different sections of society. The report highlights the gap in the mortality rates between the white and Latin/Back population in several countries, including the US and Brazil. In the US alone, at least 22,000 more Latin/Black people have died than white people. Similar data also emerged from Brazil where people of Afro descent were found to be 40% more likely to die of COVID than the white population.
The report notes that amongst those at risk of losing their jobs, women outnumbered men by at least 112 million. This is a result of the disproportionately high representation of women in low-paid, precarious jobs which are more vulnerable to the impact of the pandemic. Women are also more vulnerable to COVID-19 due to their over-representation in health and care-related, “frontline” work.
Vulnerability to COVID-19 is higher among the poor due to greater exposure and mobility. In Europe, for example, unlike higher wage earners, 74% of whom could sit at home and work, merely 3% of lower wage earners could enjoy the same luxury.
Fair and more active state is the solution
The report emphasizes that those on the margins — the poor, racial minorities and women — are in general more likely to suffer due to the pandemic and it is imperative that governments across the globe take note of this and devise policies to increase public expenditure. The vitality of public health depends on government expenditure aimed at preserving people’s livelihoods.
Talking to Peoples Dispatch, Sucheta Sardar who teaches economics and is also a consultant with Oxfam India, said that all governments need to take the rising inequalities seriously as it can affect the social and economic status of a large number of people. She also highlighted the need to increase public spending on health and education.
Responding to the oft-made argument that governments lack resources for such expenditure, she said that, “additional money can be generated through the introduction of wealth tax which is virtually non-existent in countries such as India, to cover extra expenditure bills.”
The Oxfam report argues that if a temporary tax had been imposed on just 32 of the largest corporations, it would have generated USD 104 billion in 2020 – enough to provide some kind of unemployment benefits and other financial support to all in poor and middle-income countries.
Warning, however, against adopting such policies in a ad hoc way, Gabriela Bucher, executive director of Oxfam International, argued that “these measures must not be band-aid solutions for desperate times but a ‘new normal’ in economies that work for the benefit of all people, not just the privileged few.”
The policy shift, in other words, must be long-term and involve a change in priorities. “The virus has shown us that guaranteed income security is essential, and that a permanent exit from poverty is possible. For this to happen we need not just living wages, but also far greater job security, with labor rights, sick pay, paid parental leave and unemployment benefits if people lose their jobs.”
The report notes that the pandemic has exposed our collective frailty and the inability of our deeply unequal societies to work for all and that it is high time for course correction. Addressing structural problems such as patriarchy, racism and neoliberal exploitation would better prepare us to face such emergencies in the future.
An earlier version of this copy wrongly spelt the name of economist Sucheta Sardar. The error is regretted.