Inequality: A result of the pandemic?

When the lockdown was imposed in wake of preventing the spread of Covid-19, most of the middle class had to let their house maids go – whether voluntarily or simply because the maids were leaving the city. A few weeks into managing all the household chores along with working from home, and they were looking for alternative.

Almost all of them a purchased a fully-automated washing machine, and some even considered buying a dishwasher. After all, machines cannot be infected by the virus!

This is precisely what replacement of man with machinery looks like. The example may be set in domestic context, but it is no different at the corporate level – or even at the economy level. Covid has made machines so much more attractive to employers.

This could potentially wreak havoc for so many people – leading to either no jobs at all, or low-paying ones at best. This affects the lower and middle class directly – and the result of that is quite predictable – rising inequality.

Interestingly, governments around the world already have their hands full – they need to cater to the health emergency (by expanding capacities and developing vaccine) and protect the most needy (those living hand-to-mouth). In addition, they need to maintain just enough liquidity to prevent unnecessary business closures and consequent bankruptcies. They simply have no time right now, for a problem of the future.

This does mean that the middle class is essentially on its own. One may suggest that it is only a rebalancing of the relative importance of various industries – like the tech sector is looking forward to a boom, while traditional manufacturing takes a hit; but how does one skill a line worker in some factory with coding skills, and that too within a span of months?

While governments have been launching huge spending programs to reinvigorate businesses, the public must have certain rights.

While governments have been launching huge spending programs to reinvigorate businesses, the public must have certain rights. These include the right to demand that such spendings are made in favour of the right companies – companies that actually hold potential for future, not only in terms of profits – but in terms of social justice and improved opportunity to all.

We need to differentiate industries that were already doomed to failure from the ones that are promising, but for the pandemic. And we need to focus the support the support schemes in favour of the latter. The others need to find and get into more promising ventures, rather than use the pandemic to gain a breather for another few weeks or months.

Apart from this, if right conditions are imposed in distributing the subsidised loans, the country will have greater benefits at practically no additional costs. We all remember the economic rise of India post the conditional loans from foreign institutions that it had received during 1991 bail-out.

Whether as citizens or as policy-makers, we all have a long road ahead in economic recovery. If we must do it, let’s do it right. With our eyes on the right skills for the future, coupled with right policy initiatives from government, better days must not remain elusive for long.

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