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Pandemic and Income Inequality
The Covid-19 pandemic has culminated in income inequality due to its implications on job security and livelihoods. From this standpoint, it emerges that the pandemic led to massive job losses and a slowdown in the growth of businesses (Deaton 2). Understanding such implications requires an analysis of demographic factors such as race, ethnicity, and sexual orientation (Miller 2). For instance, companies laid off about thirty percent of employees from the LGBTQ (Lesbian, Gay, Bisexual, Transgender, and Queer) during the Covid-19 pandemic (HRC Foundation 2). The pandemic also resulted in unprecedented demand shocks and thus necessitating scaling down operations in organizations (Angelov and Waldenström 92). As a result, companies’ decisions to lay off workers emanated from uncertainties and the risk of bankruptcy (Campello et al. 97). Gender is also an important demographic factor when evaluating the implications of the pandemic on income inequality. From this viewpoint, women faced more income challenges than men. Such a phenomenon emanated from the high concentration of female employees in sectors affected significantly by the pandemic, like domestic, retail, tourism, and hospitality (Inequality 4). There was also an intersection between gender and race as the layoffs affected more women of color, who are likely to work in low and middle cadre levels (Inequality 4). The exact impacts were also evident among working mothers who lost their jobs due to the pandemic. The pandemic’s hospitalization rate among persons of color was one thousand five hundred per a hundred thousand (Inequality 2). Unemployment rates among such populations were 6.7%, a proportion higher than white people’s rate of 3.7% (Inequality 3). The pandemic also culminated in global income inequality, considering that it pushed a hundred and fifteen million into poverty, exceptionally those from low and middle-income countries (Deaton 2). This paper focuses on unearthing the implications of the pandemic on income inequality, with race, gender, sexual orientation, income levels, and global location as moderating variables.
Increased unemployment rates, pay gaps, earnings inequality, and job losses occurred during the pandemic. Based on projections by the World Bank, the pandemic will lead to contractions of 6.1% and 9.1% of the US and European economies (Sayed and Peng 55). Reduced economic output impacts job creation by the private and public sectors. Manufacturing, transportation, tourism, and retail experienced slowdowns due to public health measures like social distancing and lockdowns. Racial minorities in such sectors grappled with job losses and reduced income levels (Campello et al. 100). By the end of 2020, global income per capita levels declined by 3.6%, thus increasing the number of people in extreme poverty (Campello et al. 101). Such changes resulted from increased unemployment rates. In contrast, billionaires in the US experienced a wealth increase from $2.9847 trillion to $5.019 trillion during the pandemic, thus widening the income gaps further (Inequality 1). In 2020, the average CEO (Chief Executive Officer) pay was $13,936,558, while workers only earned an average wage of $30,474 (Inequality 2). By September 2021, the unemployment rates by race were as follows: Black-6.7%, Latinos-5.2%, Asian-3.8%, and White 3.7% (Inequality 6). The overall unemployment rate was 4.6% (Inequality 6). While telework and remote operations were essential in remaining in gainful employment, employees in sectors such as manufacturing and retail did not experience that benefit. The distributions of people in areas where they could telework were Black-19.7%, Latinos-16.2%, Asian-37%, and White 29.9% (Inequality 7). While unionized employees had a high probability of retaining their jobs or negotiating higher earnings, non-unionized workers faced entrenchment (Inequality 3). The pandemic also resulted in a slowdown in corporate hiring and decreased labor market concentration. From this standpoint, many organizations halted or slowed down hiring processes to avert unnecessary costs during the pandemic (Campello et al. 99). Such phenomena and statistics unearth how the few wealthy individuals (capital owners) increased their wealth while low-paid and marginalized employees experienced layoffs, pay gaps, unemployment, and problems while seeking new employment opportunities.
Works Cited
Angelov, Nikolay, and Daniel Waldenström. “COVID-19 and Income Inequality: Evidence from Monthly Population Registers”. SSRN Electronic Journal, vol 5, no. 3, 2021, pp. 85-92.
Campello, Murillo, et al. “Corporate Hiring Under COVID-19: Labor Market Concentration, Downskilling, And Income Inequality”. SSRN Electronic Journal, vol 8, no. 6, 2020, pp. 96-102.
Deaton, Angus. “COVID-19 And Global Income Inequality”. LSE Public Policy Review, vol 1, no. 4, 2021, pp. 1-4.
HRC Foundation. “The Economic Impact of COVID-19 on the LGBTQ Community”. Human Rights Campaign, 2022. Accessed on July 11, 2022 from https://www.hrc.org/resources/the-economic-impact-of-covid-19-on-the-lgbtq-community.
Inequality. “Get the Facts on Inequality and Covid-19”. Inequality.Org, 2022. Accessed on July 11, 2022 from https://inequality.org/facts/inequality-and-covid-19/.
Miller, Naseem. “The Impact of COVID-19 on LGBTQ Communities: A Research Roundup”. The Journalist’s Resource, 2021. Accessed on July 11, 2022 fromhttps://journalistsresource.org/home/covid-19-lgbtq-research/.
Sayed, Adham, and Bin Peng. “Pandemics and Income Inequality: A Historical Review.” SN Business &Amp; Economics, vol 1, no. 4, 2021, pp. 54-61. Accessed on July 11, 2022 from https://doi.org/10.1007/s43546-021-00059-4.