Vast inequalities

Published May 10, 2020
The writer is a PhD candidate at the University of Oxford and is graduate of Harvard Kennedy School of Government.
The writer is a PhD candidate at the University of Oxford and is graduate of Harvard Kennedy School of Government.

COVID-19 has pulled a mirror in front of us and is clearly showing us the social structures we have created. Existing social cleavages stand dramatically exaggerated by the pandemic and stare back us. Sure, we might have heard of socioeconomic inequalities being a serious problem. But today, the mirror has shown us that life itself depends on the same disparities.

It was heartbreaking to see that millions of low-earning migrant workers in India were left to walk hundreds of miles once the national lockdown started. That most of the Covid-19 fatalities in the US, which has a long history of racial discrimination, are of African Americans. That ‘essential workers’ in the UK manning grocery stores, delivering our food and driving buses risk their lives every day to keep the country running. That individuals who have low levels of savings are precisely the ones who cannot afford to stay at home when half the world is under lockdown. The same socioeconomic structures in Pakistan that make income an accurate predictor of access to quality healthcare, educational attainment and employment opportunities enable these vast inequalities, a matter of life and death. It is a system that tolerates and perpetuates high levels of disparities.

Inequality can take many forms, such as wealth, income, education and opportunity. Take the US as an example due to reasons of data access. The richest 10 per cent owned a staggering 73pc of national personal wealth, and 47pc of the total income in 2014 according to the World Inequality Database. Admittedly, there are significant differences in wealth and income inequality estimates for different countries. However, a cursory look at the available estimates for other countries does not paint a flattering picture. Most countries depict high levels of disparities along many dimensions. Today, the same man-made disparities make survival easier for some and difficult for others.

It is important to remember this isn’t an individual failure but a collective one. Individuals and organisations across the socioeconomic spectrum are putting in a valiant effort to support vulnerable groups. However, inequalities that have been tolerated for generations cannot be undone by individual action alone. What is required is collective introspection followed by collective action. Data from the latest World Values Survey shows that only 19.7pc Pakistanis are in favour of further redistribution of income to reduce income inequality while a whopping 74.5pc aren’t. Changing the socioeconomic system that leads to high levels of disparities requires us to first understand that we have allowed the latter to persist. It requires moral responsibility on our part to make a fairer world. Hopefully, all of us can see the importance of having a fairer world thanks to the mirror held in front of us by Covid-19.

This isn’t an individual failure but a collective one.

There are many policy responses to make the world fairer and more equitable. For instance, governments can implement progressive income taxes to reduce income disparities. They can introduce wealth taxes to tackle wealth inequality. Additional revenue from these taxes can then be pumped into public services such as education and health to narrow the quality gap between the top end of the private sector and the public sector. All of these policy tools are incredibly hard to implement, especially in developing countries where there are additional implementation challenges. They also capture only a small part of the inequality problem. But the point here is simple: socioeconomic disparities can be reduced and the world can be made fairer. Hard does not mean impossible.

A big debate around policy tools that reduce income and wealth inequality is the trade-off between efficiency and equity. It is argued that these tools also reduce the incentives for people to work hard and earn more. This is a valid concern, but not one that cannot be addressed. For instance, taxing inherited wealth would hardly change individual incentives to work hard. It is important to remember that modern tools that reduce disparities do not aim for perfect equality. People who work hard should definitely be rewarded more and it would be unfair to have a system that does not. Modern policy tools instead aim to create a system where we have equality of opportunity rather than equality of outcome.

While we see ourselves and the societal structures that we have created in the mirror, we could either ignore them, or we could take this painful episode as a moral lesson. We could continue to live our lives in the way that we did once the pandemic is over or finally decide to start taking collective action to reduce disparities that we see around us. Covid-19 has shown us who we are today, but our decisions today and actions tomorrow will determine who we become in the future.

The writer is a PhD candidate at the University of Oxford and is graduate of Harvard Kennedy School of Government.

Twitter: @KhudadadChattha

Published in Dawn, May 10th, 2020

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