The impact of COVID-19 has set back inequality for generations

A recent report found that more people now live below the poverty line as a result of COVID-19, setting back progress towards achieving equality for decades.

In recent years, the world has made remarkable changes. The establishment of the UN Sustainable Development Goals (SDGs) has set a precedent for development priorities and outlined the areas where change is most needed. Yet, more than 700 million people still live in extreme poverty, with children disproportionately affected. A recent report found that more people are now below the poverty line as a result of the COVID-19 pandemic. COVID-19 has exacerbated global inequalities, partly reversing the declining inequality rates from previous decades, and setting back progress towards SDG 10.

The disproportional effect on children

The report, jointly published in conjunction with UNICEF and World Bank, examines the effect that the pandemic had on global inequalities across 35 countries. It found that households with three or more children are most likely to feel the shortcomings of the pandemic with more than three-quarters reporting a reduction in earnings even now, three years later. Moreover, on average, households with children are more likely to suffer from food insecurity, with 47% of households interviewed reporting that they skipped meals due to a lack of money after the pandemic began.

The pandemic has caused the first rise in between-country income inequality (referring to inequalities in wealth or well-being between different countries in the world) in a generation. At least two-thirds of households with children have lost significant income since the pandemic. Across the globe – it is estimated that about one billion children are living in multidimensional poverty – without access to education, health, housing, nutrition, sanitation, or water. The report revealed that this number has soared to approximately 1.2 billion, as a result of the pandemic.

Children comprise more than a third of the global population, yet they represent half of those struggling to survive on less than $1.90 a day. Even in the world’s richest countries, one in seven children lives in poverty. Today, one in four children is at risk of falling into poverty in the European Union alone. No matter where these children are located, the results are the same; children are significantly more likely to grow up malnourished, develop illness, or forced to work from an early age, earning even lower wages than adults.

The refugee crisis perpetuates the inequality crisis

Before the outbreak of the pandemic, more than three-fifths of countries saw a higher growth rate in household expenditure among the bottom 40% of their population than their national average. The pandemic has worsened this trend. Weak recoveries in emerging markets and developing economies are expected to raise between-country inequality further. Additionally, the war in Ukraine has created one of the largest refugee crises of modern times. As of April 2022, 4.7 million refugees from Ukraine had crossed borders into neighbouring countries. By mid-2021, the number of people who were forced to flee their countries due to war, human rights, persecution, or other serious events, had grown to 24.5 million. This is the highest number on record.

Young refugees may lose years of education, missing out on the necessary credentials required for many employment opportunities. Similarly, adult refugees are often unable to transfer their credentials and skills into their new environments, which can affect one’s ability to create a decent livelihood. Many refugees and migrants decide to move in part out of necessity, and partly on the notion that a better life may exist. Yet, those who move are often faced with unequal lack of rights and social resources, which perpetuate the existing inequalities that already exist within the country or region.

Sustainable Development Goal 10 & global progress

Despite these shocking stats, only a limited number of governments are directly tackling these global inequalities and making it a national priority. The agreement of the UN SDGs sought to change this by putting an end to extreme child poverty and reducing global inequalities. SDG 10 outlines the pathway to “reduce inequality within and among countries,” through a series of targets, that seek to empower and promote social, economic, and political inclusion of all and to create equal opportunities for everyone.

However, given that the pandemic has exacerbated many of the systemic issues that prevent global equality, there is an enormous amount of progress to be made before 2030. The report concluded that the pandemic intensified global inequalities, especially in households with few or many children, partly reversing the decline in inequality of the previous two decades. Moreover, rising inflation is likely to worsen the post-pandemic effects further, with research highlighting that this is likely to increase within-country inequality for years to come. These results, emphasise the importance of the UNICEF and the World Bank recommendation of enhanced government programs to enable equitable and sustainable recovery.

Although SDG 10 outlines clear pathways and targets to reduce global inequalities, it does not take into consideration how a shock like the pandemic, can result in a decline in global progress towards reaching the 2030 goals. A more comprehensive strategy is needed to steer the global economy into a more inclusive development path, one that factors rising inflation, post-pandemic economy and the cost of living.

About the author:

Georgina Murrin is a ESG Analyst in Itriom’s London Office.

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