After reeling under the severity of the COVID-19 pandemic for more than half a year now, the only thing that can be said with certainty is that it will leave the world a much more unequal place than it was before the virus broke loose around the world. The nature of the crisis is such that the richer sections of society are better equipped to protect themselves against it and in dealing with its repercussions. However, the interplay of inequality and pandemics does not begin in the effects of the latter.

Inequality is not simply a phenomenon that will create a differential impact across society during pandemics and further exacerbate the gap. It is quite possibly also a reason behind the outbreak of the disease itself. There is a school of thought that argues that pandemics are more likely in times of growing inequality.

The history of humankind is littered with episodes of deadly pandemics and each one of them are preceeded with similar trends. Initially, population growth in a region results in a rise in population density. This pushes the basic reproduction number of all diseases upwards. At the same time, it also leads to excess supply of labour. This pushes wages downwards.

The growing immiseration has several effects across society. It reduces nutrition levels of the poor making them less capable of fighting pathogens. The poor also migrate vast distances in search for economic opportunities. As they gravitate to cities, these regions become breeding grounds for diseases and the movement of people makes it easier for diseases to spread.

On the other hand, the richer sections of society that typically own capital become richer as labour becomes cheap. The rich tend to travel and spend more on goods that are traded from different places. Apart from people and goods, germs travel more easily along these routes.

Peter Turchin, the historian, has tested this theory and found strong statistical association between the level of global integration, levels of inequality and the rise of pandemics thorough history. In the second century BCE, for instance, the Roman and the Chinese empire were at their pinnacle of growth. The ancient Silk Road developed during this period, which symbolises how trade was flourishing between the two empires. Then, in 165 BCE, the Antonine plague broke out in Rome. Soon, the plague reached China and caused widespread devastation. As a result, the two empires went into a steady decline.

Similar patterns can be traced before the emergence of the plague of Justinian in 541 and the Black Plague in 1346. The same could be said about 2020 when globalisation and inequality are at their peak in human history. It is, therefore, not hard to argue that these factors contributed to the development of the COVID-19 pandemic. Unfortunately, the role of inequality in pandemics does not end there.

The poor in any country have to share a higher burden of the misery during a disease outbreak due to a variety of factors that are associated with poverty. To begin with, they have the least access to quality healthcare systems. It is worse for poor in developing countries where the out-of-pocket expenditure is typically quite high due to a lack of insurance mechanisms. Next, the poor tend to live in densely packed areas where it is more likely for the virus to spread. Moreover, they lack access to basic services like clean water, which makes hygiene a luxury.

There are further pernicious effects of inequality during pandemics and the measures taken to tackle it. For instance, people have unequal capacities to comply with lockdown measures, which has an uneven impact on livelihoods – exacerbating societal inequities in the process.

The poor, especially in the developing world, survive on subsistence wages. Since most of their wages are obtained on a daily basis and spent on basic goods, they have low savings to fall back upon in times of lockdown. So, the section of society that is the most vulnerable is also the least likely to be able to comply with measures to deal with virus outbreaks since their survival depends on it.

Even if the poor have stable salaried jobs, their low levels of education and skilling makes them most vulnerable to layoffs. In the United States, for example, the unemployment rate in the month of May had reached as high as 16 percent as per the government’s estimate and the burden was heavily biased towards less educated workers. About 7.2 percent of workers with a bachelor’s degree or higher were unemployed against 18.5 percent workers without a high school diploma in the same month. The situation gets worse across developing nations, which do not have strong social security systems.

The injustices of inequality extend even beyond this point. When the vaccines first arrive, the markets take over to dictate the distribution patterns around the world. In 2009, when the swine flu epidemic occurred, the wealthy nations secured large advance orders. The poorer countries were crowded out of the markets and received the vaccines much more slowly.

Finally, after the vaccines have reached the remotest corners of the world and the virus is negated, the future generations of the poor are still bound to suffer the repercussions of the pandemic to a greater extent. A recent paper (Furceri et al. 2020) that studied past pandemics found a persistent and significant increase in the measures of inequality in the post-crisis years. On an average, the income share going to top decile increases on one hand and decreases for the bottom decile on the other. So, the young in poor families are forced into a future with even more poverty. Thus, the losses from pandemics are unfortunately more permanent for the poor. The gap across income levels widens and cements in such times.

Inequality has a damning role to play in pandemics from their emergence till after they are vanquished. So, the policy responses to tackle such a crisis should go beyond the merely focussing on economic revival. This is not to argue that economic interventions are unimportant. But the measures need to be equitable in nature. Instead of providing stimulus to businesses, for instance, providing cash transfers to the people can be more rewarding. Even in response to the 2008 crisis, trickle-down hardly worked because banks and businesses chose to reward their shareholders with higher dividends.

Cash transfer to people could help in two ways. First, since consumers are cash starved, putting money into their hands can provide them with the requisite purchasing power and help in reviving demand. Second, these transfers can provide a social safety net that can prevent the poor from sliding into the abyss of rising inequalities. There is a prevalent concern with such ideas that the beneficiaries might spend the money on non-essentials like alcohol. But Johannes Haushofer & Jeremy Shapiro found in their unconditional cash transfer experiments in Kenya that when the poor are given transfers, they spend more on food, health, and education on an average. Contrary to expectations, their spending on alcohol and tobacco fell.

As the world picks up the pieces amidst the deadliest pandemic in living memory, the task at hand is to secure the livelihoods of the most deprived sections of our societies. The future of the global community is linked to the well-being of the person at the end of the line. And we need to ensure that the concentration at the wrong end does not increase. There are bound to be some unfortunate and undesirable outcomes of the pandemic but the actions that we take today will set the course for the future – for better or for the worse.

AUTHORS

Amit Kapoor, PhD, is Honorary Chairman at Institute for Competitiveness, India; Visiting Scholar at Stanford University; Editor-in-Chief of Thinkers. He is the chair for the Social Progress Imperative & Shared Value Initiative in India. He is an affiliate faculty for the Microeconomics of Competitiveness & Value Based Health Care Delivery courses of Institute of Strategy and Competitiveness, Harvard Business School and an instructor with Harvard Business Publishing in the area of Strategy, Competitiveness and Business Models.

He has been inducted into the Competitiveness Hall of Fame which is administered by Institute for Strategy and Competitiveness at Harvard Business School in addition to being the recipient of the Ruth Greene Memorial Award winner for writing the best case of the year, by North American Case Research Association (NACRA). Amit is the author of bestsellers “Riding the Tiger”, which he has co-authored with Wilfried Aulber and “The Age of Awakening: The Story of the Indian Economy Since Independence” published by Penguin Random House. 

Chirag Yadav is Research Manager, Institute for Competitiveness. His research interests lie in the field of urban economics, inequality, economic history, and economic development. He has authored several reports and case studies for the institute on various issues of economic development across Indian states. He also regularly writes for various national dailies and has co-authored a book on Indian economic history, The Age of Awakening.