The current crisis has brought existing inequalities to the fore.
It also risks exacerbating them. How we respond to it will
determine whether the recovery is an inclusive one or ends up
entrenching and widening social divisions. These are the main
conclusions of a new report from the IFS Deaton Review of
Inequalities, funded by the Nuffield Foundation.
Among the risks are:
-
A widening in wage and employment
inequalities. In the short run, it is overwhelmingly
low earners who are in shut-down sectors, being furloughed
and at risk of unemployment. In the longer run, more reliance
on technology and working from home could favour the more
highly educated at the expense of others.
-
A widening in health inequalities. In
the short run, the crisis appears to have widened even
further the gap in death rates between better-off and
less-affluent neighbourhoods, as well as between some ethnic
minorities and the white majority. We know that periods of
unemployment, most likely to affect the low-skilled, can have
major detrimental long-term effects on health.
-
A widening in ethnic
inequalities. Some minority ethnic groups, and
especially those of Pakistani or Bangladeshi origin, are much
more likely than others to work in shut-down sectors. Black
groups are disproportionately represented in key worker
occupations and have been contracting COVID-19 at far higher
rates than the white majority.
-
A widening in generational
inequalities. Those leaving school or university
this year will enter the toughest labour market in more than
a generation. Workers under 25 are twice as likely as those
over 25 to work in a locked-down sector. After a tough
decade, this could knock the younger generation back once
more.
-
A widening in gender
inequalities. The additional childcare and
housework as people stay at home and schools and nurseries
closed has fallen far more on mothers than fathers. There
must be a risk that this disproportionately inhibits work and
career progression for mothers, when progress in closing the
gender wage gap had already stalled.
-
A widening in educational inequalities.
Private schools are almost twice as likely to be providing
online teaching as the state schools attended by children
from the fifth most deprived families. Within the state
sector, 55% of families from the most affluent backgrounds
(top fifth) report schools providing online classes, compared
with 40% among the least affluent. Better-off pupils also
have better home facilities and are much more likely to have
private tutoring. This could put back years of slow progress
on social mobility.
The longer-term consequences are not all
inevitable though. Some trends may turn out to be
positive:
-
An increase in remote working, and in the productivity of
remote working, could be especially helpful for mothers’
careers.
-
The increase in time that fathers are spending with their
children during the crisis – even though less than mothers –
might accelerate changes in gender norms.
-
Widespread working from home may allow more high-paid and
high-productivity jobs to be located away from London.
-
Attitudes may change – to the welfare system, to key
workers, to inequalities between ethnic groups – in ways which
make inclusive economic and social policies easier to sell and
deliver.
Avoiding the worst outcomes, and having a chance at
the best, will require effective policy. For
example:
-
Effective routes through further and vocational
education will be more important than ever.
-
Government will need to ensure that small firms that
have a viable future survive the crisis, to avoid
concentration of market power.
-
Effective welfare to work and training, which equip
those who become unemployed with genuinely valuable skills,
will be vital.
-
Children, especially poorer children, who are missing
out on school will need additional teaching post
crisis.
Robert Joyce, Deputy Director at IFS and an
author of the report, said:
"The crisis has laid bare existing inequalities and risks
exacerbating them, but some of its legacies might also provide
opportunities. Government will need to be on the front foot in
laying the groundwork for a strong and inclusive recovery even
while still dealing with the immediate crisis. If, for example,
we can limit now the severity of career disruption, the widening
of health and educational inequalities, or the extent to which
small firms that had a productive future are squeezed out by
larger established competitors, policy’s job in years to come
will be much less difficult than if it is trying to limit or undo
the damage."
Mark Franks, Director of Welfare at the Nuffield
Foundation, said:
"This report provides further evidence that people are not
affected equally by the COVID-19 pandemic – either in terms of
the immediate risk to health or the negative social and economic
consequences. In particular, some minority ethnic groups, people
in certain key worker occupations, and those in low-income jobs –
groups that often overlap – are at much greater risk. It is
essential that the immediate policy response takes steps to
address these inequalities, but we also need to understand and
mitigate the underlying systemic and institutional factors that
underpin them."
