SOCIAL INEQUALITIES IN THIS TIME OF PANDEMIC: is there a cure?
The COVID-19 recession is the most unequal in modern U.S. history.”1The pandemic has thrown into stark relief the high and rising economic inequality in the United States and elsewhere. The costs of the pandemic are being borne disproportionately by poorer segments of society. Low-income populations are more exposed to the health risks and more likely to experience job losses and declines in well-being. These effects are even more concentrated in economically disadvantaged minorities. The pandemic is not only exacerbated by the deprivations and vulnerabilities of those left behind by rising inequality but its fallout is pushing inequality higher.2
Income and wealth inequality has risen in practically all major advanced economies over the past two to three decades. It has risen particularly sharply in the United States. The increase in inequality has been especially marked at the top end of the income distribution (Figure 9.1). Those with middle-class incomes have been squeezed and the typical worker has seen largely stagnant real wages over long periods. Intergenerational economic mobility has declined. Income distribution trends are more mixed in emerging economies but many of them have also experienced rising inequality, including some major emerging economies such as China and India.
Rising inequality is a major fault line of our time, with adverse economic, social, and political consequences. It has depressed economic growth by dampening aggregate demand and slowing productivity growth. It has stoked social discontent, political polarization, and populist nationalism. And as the pandemic has revealed, it has increased societal and economic fragility to shocks.
