A new legacy of inequalities behind the Covid-19

Due to the widespread economic disruption caused by the pandemic, an estimated 89 million people are expected to fall back into poverty in Asia and the Pacific, falling below the international poverty line. Around 140 million jobs were lost in 2020; many by people who already live on a single salary of poverty.

Neither the stock market nor the first 1,000 billionaires follow the same path. On the contrary, despite a short-lived disruption at the start of the pandemic, billionaires around the world saw their wealth increase by $ 3.8 trillion between March and December 2020. Income inequality tends to increase over the five years. years following adverse shocks.

However, the consequences are not limited to simply widening the income gap between the rich and the poor. By simultaneously erasing most of the opportunities for the less privileged to build a better life, the pandemic risks deepening and perpetuating inequalities from one generation to the next. Here are a few reasons.

In the absence of adequate social protection systems, short-term coping strategies of low-income households, such as reducing food consumption and quality, can turn into a poverty trap.

Disruptions in schooling make education prospects uncertain – families’ investment in a better future. For half of the region without internet access, distance education is not an option. The loss of household income has made education for children unaffordable. For one in five girls who say they have increased domestic responsibilities, education has become a luxury. With 6.7 million students likely to drop out of school by the end of 2020, the risk of intergenerational poverty looms on the horizon.

While Covid-induced job losses are widespread, the path to a long-term recovery is not equal for all workers. For low-wage workers who did not have telework as an option or social protection to fall back on, turning to low-quality, informal work may be the only option left to make ends meet. The laid-off workers have become delivery drivers. The staff of the closed restaurant became street vendors. Domestic workers have accepted a pay cut to stay afloat. An analysis of the South Asian labor market by the World Bank suggested an exodus from the formal sector to the informal sector six months after the start of the pandemic, even when unemployment fell. And in the absence of opportunities for retraining and upgrading the workforce, it may not be unemployment that defines employment prospects after Covid 19, but lower quality, more informal employment than it already is.

Past experience with shocks suggests that the pandemic could lead to a permanent loss of human capital and productivity. But that does not mean that the spell of inequality cannot be broken. While direct cash transfer programs have helped alleviate hunger during the pandemic, they will need to translate into adequate investments in efficient food systems and reliable health services, especially for feeding mothers and children.

The unprecedented rapid transition to distance learning via radio, television and the Internet has maintained the sustainability of education. But for children out of reach or dropping out of school, it will not be enough if there is not dedicated support for returning to school. To break the trap of low-quality informal employment, there is no alternative to formalizing the informal sector and investing in adequate social protection systems. And just as the pandemic has spurred technological change in the world of work, there is a greater need than ever to secure skills development and vocational training opportunities to help low-wage workers take better trajectories.

Beyond 2020, there is a generation of children growing up in the pandemic and a cohort of young people entering the workforce during a recession. The recovery is unlikely to be just a sprint, but rather a marathon where a long term strategy that invests in people is needed.

The play, slightly abbreviated, is taken from the UNESCAP Blog


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