GROWING INEQUALITIES IN THE PANDEMIC

WHY IN THE NEWS?

Recently, Oxfam International published a report titled ‘Profiting from Pain’ stating a new billionaire emerged every 30 hours, while a million people might slip into extreme poverty every 33 hours in the same time period during the Covid-19 pandemic.

STATE OF INEQUALITY

Inequality refers to the phenomenon of unequal and/or unjust distribution of resources and opportunities among members of a given society.

ISSUES WITH GROWING INEQUALITY

1. Reduced growth rate- Accumulation of wealth on a few hands leads to less utilization of resources thereby minimizing the growth rate and development.

2. Social disharmony- Unequal access to health, and education for the common people end up in social unrest.

3. Political Existence-Widening inequality questions the existence of the political system in the country. For e.g.: Sri Lankan crisis

4. Poverty and Malnutrition- Pandemic made rich becoming richer, poor becoming poorer. Increasing poverty and malnutrition diminishes the human capital.

5. Gender Disparity-Women are more vulnerable to downsizing the workforce.

OXFAM REPORT

• Billionaires have seen their increase in wealth as much in 24 months which was made by them in the past 23
• Billionaires in the food and energy sectors have seen their wealth increase by a billion dollars every two For e.g., 62 new food billionaires have been created since 2021.
• The combined crises of COVID-19, rising inequality, and rising food prices could push around 263 million people into extreme poverty by the end of 2022. This is equivalent to one million people every 33
• At the same time a new billionaire has been minted on an average every 30 hours during the
• This means on an average, it took the same time to create a new billionaire during the pandemic, and one million people could be pushed into extreme

WHY INEQUALITY IS WIDENING?

1. Neo-economic policies

• Moving away from public services into private
• Making Services unaffordable for the

2. Monopoly

• Massive concentration of corporate
• Huge disparity of income already existing between rich and
• Exploitation of the common
• For e.g.; Moderna: The pharmaceutical company has just one product on the market, a COVID-19 vaccine on which it makes a 70% pre-tax profit margin.

    Pfizer: The company has sold the most vaccines in the world but has delivered the least to low-income countries.

3. Lack of Business 

• Profiteering by food, energy, pharmaceutical, and technology sectors during the pandemic. For e.g.,

  Walmart focused on the distribution of shareholder dividends rather than distributing profits for workers who are facing the spiraling cost of living.

4. Tax evasion
   • Shifting of profits by MNCs to avoid

5. Fiscal Policies
   • Eroded workers’ rights by pro-capitalist
   • Reduced tax rates for

6. Monetary policy
   • Central banks injected trillions of dollars into
   • It dramatically drove up the price of assets leading to inflation. This money en routes to th

• An enormous increase in billionaire wealth has been the direct by-product of this cash

7. Crony Capitalism

• Extreme wealth corrupts our
• Unaccountable power in the hands of a small

DIMENSIONS OF INEQUALITY PANDEMIC

According to Oxfam’s analysis:

1. Wealth inequality

• 573 Billionaires were added since the pandemic began.
• Total billionaire wealth is now the equivalent of 13.9% of global gross domestic product (GDP), which was only 4.4% in 2000
• The richest 10 men have greater wealth than the poorest 40% of humanity combined. The richest 20 billionaires are worth more than the entire GDP of sub-Saharan Africa.

2. Income inequality

• Covid-19 made 125 million people lose their jobs and the incomes of 99% of humanity have fallen.
• It would take about 112 years for the average person in the bottom line to make what a billionaire in the top gets in a year

3. Gender inequality

• Feminised work- Women were disproportionately pushed out of employment, especially as lockdowns and social distancing affected highly feminized workforces in the service sectors, such as tourism, hospitality, and care
• During the Pandemic, women had to take over more of the house hold work. Also, when companies opted for a cost cut, it is the women who were targeted first to be removed. Thus, an increase in unpaid work has barred millions of women from re-joining labor
• Anaemia- Women are expected to cope with the huge rises in food and energy prices in order to keep their families
• Gender pay gap- Before the pandemic it was forecast to take 100 years to close; now it will take 136 years thus widening the gender pay
• In 2021, there were 13 million fewer women in employment compared with 2019, while

men’s employment recovered to 2019 levels.

4. Racial inequality

• Racial inequalities linked with historical legacies of white supremacy, including slavery and
• For g., Indigenous people in Brazil, Dalits in India, and Native American, Latin, and Black people in the USA face disproportionate lasting impacts from the pandemic.
• Globalisation of Patriarchy and Racism -Half of all working women of color in the US earn less than $15 an hour, a widely used threshold for distinguishing low-wage workers in that

5. Health inequality

Good-quality healthcare is a basic human right.

• Vaccine inequality – If Vaccine had been distributed fairly then every adult in the world who wanted it could be fully vaccinated; instead, just 13% of people in low-income countries have been fully vaccinated.
• The life expectancy of people in high-income countries is 16 years longer than that of those in low-income
• High out-of-pocket expenditure- Having more money in your pocket not only helps to access healthcare but also helps to get a longer and healthier life.

6. Educational inequality

• A report by NGO, Pratham-As per ASER report, the trend of increasing student enrolment in government-run schools from private schools on account of exorbitant school
• Digital divide- With blended learning –using both online and offline modes, students without digital gadgets are at stake of losing quality education

7. Inequality between countries

Before the pandemic, inequality between rich countries and low-income countries was falling, but Covid-19 has reversed this trend.

• Huge debt burden- Preventing the government from doing more to shield their citizens from soaring
• Low social spending- Forcing authorities to make cuts to public services like health and education and leaving them unable to
• Social security Benefits-Reduced financial support to

WAY FORWARD

The Government of the day has to take significant steps to ward off the unprecedented cost-of-living crisis that people are facing today.

1.Windfall taxation

• Proposed by the IMF, the OECD, and the EU to impose windfall
• For e.g., the energy companies making record profits from skyrocketing energy prices to be paid windfall taxes to support people facing rising energy
• Italy is the first country to actually impose a windfall
• The French government resorted to windfall taxing on excessive wartime wealth at a rate of 100% after the Second World

2. One-time Wealth tax

• Super-profitable corporations to be taxed on a temporary increase in humungous profits.
• Argentina adopted a one-time wealth tax on the wealthiest last year as part of its COVID-19 recovery plan.

3. Permanent wealth tax

• Emergency taxes on the richest must pave the way for a more fundamental
• Permanent taxation of wealth that rebalances the taxation of capital and labor can greatly reduce

4. Good Governance

• Social infrastructure to be strengthened for the welfare of
• Improve accessibility and availability of essential public
• Timely intervention to control artificial scarcity by big giants to profiteer from the
• Strengthen Monetary and fiscal

5. Economic Measures

• Level playing field for all sectors to ensure fair
• Refined economic

CONCLUSION

Governments must act now to rein in extreme wealth. They must agree to increase the taxation of wealth and corporate windfall profits and to use this money to protect ordinary people across the world and reduce inequality and suffering. “Commerce without Morality “-principle of Gandhi’s deadly sins need to be remembered to restrain ourselves from profiteering the pain of others.

QUESTION

“Growing inequalities in the world during Covid-19 is not because of the pandemic, but because of our

economic policies”, Comment. Suggest some structural measures to address it. (250 Words, 15 Marks)