Economic Inequality Fuels the Spread of COVID-19

By late summer of 2020, as new cases of COVID-19 showed signs of a resurgence, it was evident that Canada’s recovery from the pandemic was years, not months, away. More than that, COVID-19 has put the class divide into a sharp focus.

Consider who has felt the brunt of the pandemic so far. Lower wage and part-time workers in essential services in retail, public transit, and health care who cannot easily practice physical distancing. This group is poorer, more racialized, more female, younger, more likely to live and work in overcrowded conditions, least likely to be unionized, and disproportionately more likely to have been infected. They have not been able to take time off work or advocate for an extension of hazard pay.

Then there are the unemployed and underemployed who were furloughed or laid off, have used up any paid leave or savings they might have had, and see few opportunities to return to work. Canada’s unemployment rate in February 2020 was 5.6%. By May, it was 13.7%.

Consider as well Canadian adults with disabilities, many of whom straddled the poverty line before the pandemic and now have extra expenses, complex health needs, and fewer opportunities to work. Those who received disability benefits did not qualify for more generous programs like CERB and are now accumulating new debt as a result.

Despite the rush of government aid programs that were meant to cushion the blow of the shutdown, these groups are in a more difficult place than they were before COVID-19.

Meanwhile, there is a relatively fortunate a group of high-earners—professionals and highly skilled public employees that maintained steady incomes throughout the pandemic. Some are anxious, tired of Zoom meetings, or bored. Many have continued to work safely from home, paid down debt, and accumulated savings. Most are doing fine.

The economic gaps between these groups have been widening for decades and are unlikely to close in the midst of a national emergency. In fact, they will compound the health and social impacts of COVID-19 and make economic recovery more difficult. Wide social disparities in wealth and opportunity are not what you want when so much depends on mobilising public support for physical distancing policies, masks, handwashing, and prolonged disruptions to travel, commerce, and social and cultural activities.

There are two main reasons for this, both equally depressing. First, looking globally at the distributions of income and economic wealth in different countries, there we find that inequality aligns with biased social policies that benefit the rich through lower taxes, fewer protections for lower-wage workers, and less generous government investments on health, education, and other social services (see for example Daniel Béland’s blog on a Canada-USA comparison). Where inequality reaches extreme heights, and the rich see that they have less to gain from sharing their wealth for the common good, there is reduced support for democratic institutions and public health agencies, increased support for a strong leader to restore social order, and a drift towards plutocracyMasks and MAGA hats are rarely worn together.

Second, countries that are more unequal also have larger health inequalities and tend to have worse health overall and more social problems. The various consequences of inequality on population health are well documented and the data point—more or less— to class anxiety and distrust that flare across class lines. The problem here is not abject poverty in the absolute sense. It is the juxtaposition of poverty alongside extreme wealth. Constantly having your nose rubbed in your poverty reduces feelings of control in life and intensifies its frustrations and stressors.

In countries like Brazil, Russia, South Africa, and the United States, we are witnessing the reciprocal effects of toxic economic inequality, health disparities, and stumbling, inept government responses to COVID-19. A few of the world’s most unequal countries sit at the top of the world league tables of COVID-19 cases and deaths. They will probably stay there.

But Canada has no reason to be smug by these international comparisons. This pandemic has exposed deep-rooted inequalities that needed sustained government action before COVID-19 and may now hold the key to recovery. Come the next national election, Canadians are likely to hear a lot about budget deficits, the national debt, and spending cuts. Now is the right time for a serious discussion about ways to reduce inequality in this country, beginning with a Basic Income Guarantee.

 

For further reading, see: The trouble with trust: Time-series analysis of social capital, income inequality, and COVID-19 deaths in 84 countries

Elgar, F. J., Stefaniak, A., & Wohl, M. J. A. (2020). The trouble with trust: Time-series analysis of social capital, income inequality, and COVID-19 deaths in 84 countries. Social Science and Medicine. https://doi.org/10.1016/j.socscimed.2020.113365

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