Analysis: COVID-19 spurs global push to tackle wealth gap

Analysis: If not now, when? COVID-19 spurs global push to tackle wealth gap Governments worldwide, facing strong evidence that fallout from COVID-19 has widened wealth gaps as well as wrecking economies, have expanded social safety nets and in some cases begun exploring bolder ways of tackling the imbalances. Dhara Ranasinghe Reuters

Governments worldwide, facing strong evidence that fallout from COVID-19 has widened wealth gaps as well as wrecking economies, have expanded social safety nets and in some cases begun exploring bolder ways of tackling the imbalances.

The massive injections of fiscal and monetary stimulus and ideas such as one-off taxes on the rich and basic income support for the poor potentially set the scene for the biggest egalitarian shift since generous welfare states emerged in western Europe after World War Two.

"The silver lining from the pandemic is that maybe there's an opportunity here for us to review and renegotiate the social contract," said Francisco Ferreira, director at the International Inequalities Institute at the London School of Economics (LSE).

Recovery programmes have set many major economies on the path of quick rebounds after a torrid 2020, and the International Monetary Fund estimates global GDP will grow 6% this year, a rate unseen since the 1970s.

But behind that encouraging headline, divisions are widening.

United States, one of the few countries to provide extensive ethnic breakdowns of economic data, April figures showed unemployment among whites falling from 14.1% a year ago to 5.3%; Black unemployment only dropped from 16.7% to 9.7%.

A March report on the gender gap by the World Economic Forum concluded that it would now take an average of 135.6 years for women to reach parity with men on a range of factors including economic opportunity and political power.

Meanwhile, developed countries' dominance of access to the vaccines needed to ease restrictions and kick-start economies has led to urgent warnings that disparities between rich and poor nations will grow.

With the pandemic having highlighted existing inequalities – for example lower-paid workers concentrated in the service sector jobs hit hardest by lockdowns – some signs of a more incisive policy response are however emerging.

"An important place where that's really happening is the U.S., where the (Joe) Biden administration represents a serious break from the past," the LSE's Ferreira said. ...