Equal distribution of wealth prepares countries for the burdens of COVID-19 cases, and will level the playing field for the aftermath
The economic crisis due to the COVID-19 pandemic is comparable to the 2008 recession. In a world that already suffered from systemic inequality before the pandemic, the best way to recover is to actively redistribute wealth as a symbol of solidarity and as a buffer for those experiencing economic hardship. The only way to step out of this crisis and prevent future damage is to acknowledge that the world we are living in is currently unequal by nature.
While it is clear that the globe has been experiencing systemic social and financial inequality, a pandemic does call for immediate and directed action. The nations that are best handling the virus are the ones that have acknowledged the existence of inequality amongst their people and who have wasted no time in distributing resources accordingly. According to Time Magazine, Iceland makes the list of the most successful countries in battling the coronavirus. The Icelandic government recently released a second stimulus package, but as a secondary measure; their priority is their nation’s health. They started testing their population for COVID-19 in March, far before other nations, in order to identify which Icelanders needed to quarantine. By the release of this article on June 12, 2020, there had not been more than 10 deaths from the virus. Reuters claims that Iceland offered a total of $420 million in disaster relief for “smaller businesses and vulnerable groups” after their initial $1.6 billion package when the virus first hit. The government understands the severe impact their shut-down had on their population, especially marginalized groups. And yet, their shut-down was significantly shorter than that of other nations. Their small size surely helps, but they also recognized the threat early, immediately implemented precautionary measures, and identified the populations most vulnerable. The government has given front-line medical workers immense bonuses on their pay to compensate for the risk they are taking, they have created around 3,000 summer jobs for those out of work, and they have implemented summer school for students who lost time on their studies. It seems that both a nuanced and comprehensive approach to fighting the coronavirus is key when there is such disparity in how the global population experiences the threat of this virus. Now is not the time for nationalism; now is the time for recognizing where one’s population might fall through the cracks. In the United Arab Amirates, all COVID-19 treatment is free of charge, because the government recognizes that not all of their citizens have access to health insurance. New Zealand has offered a total of $9 billion to workers living paycheck to paycheck. CNBC explains that this assists businesses in continuing to pay their workers sufficiently even throughout this pandemic. However, perhaps the most moving and effective action in New Zealand has been a symbolic one: their leader’s open acknowledgment of the inequality in their own country. Prime Minister Jacinda Ardern decided back in March that she, along with other officials, would take a pay cut on their own income of 20%. This profound act was not actually one that would offset the costs of coronavirus; rather, Ardern explained that it is a move of solidarity with her people, both an emblematic and a tangible step towards a country with a level playing field. Forbes recently published an article explaining that the best way for big businesses to contribute to the fight against COVID-19 is for CEO’s and senior leaders to take their own pay cuts. The globe is seeing a shocking number of lay-offs, sending millions of people below the poverty line. Harvard Business Review explains that this not only can off-set costs and allow companies to continue paying their employees, but it can also boost morale, ensuring workers that their time and livelihoods are more valuable than their boss’ comfort. Tangible solidarity in the face of crisis is the only way countries are moving forward. Equitable distribution of resources is both a life-saving plan and a preventative measure for future crises.
Equitable distribution of wealth is largely fail-safe and fosters a nation’s economy. But, while government stimulus packages tend to do a range of good for their nation, pay cuts in order to level the playing field is not inherently the answer. Labor & Employment reporter Paige Smith of Bloomberg Law explains that the process to determine just who qualifies for a pay cut is tricky for a corporation. Heidi Reavis of the RPJ Law Firm believes that “sometimes empathy and fairness are not on the same page.” While pay cuts could not only help financially with COVID-19 disaster relief, but also with closing the pay gap between white men and marginalized groups, there is still the chance of multiple law suits if a pay-cut targets less than a whole department, for instance. Justifying a cut in salary during a pandemic is undeniably thorny. Sonya Rosenberg, partner with the Neil Gerber Eisenberg law firm, confirms that most businesses are making pay cuts, because she has not seen cuts like this since the 2008 recession. However, data demonstrates that businesses are not closing the pay gap; their cuts affect predominantly marginalized groups and only 29% of white workers who answered the Pew Research survey. According to Bloomberg LP, attempts to redistribute wealth have been intensifying the pay gap, because as always, this method is affecting disadvantaged groups the most; CEO’s are not taking the cuts. According to Senator Patty Murray, relying on businesses to redistribute wealth equitably seems unwise, and she predicts that women will see the brunt of pay cuts during the COVID-19 pandemic. She asks that the government come up with more resources for those struggling, rather than taking from the population. The Washington Post claims that about 4 million workers have experienced a salary cut due to COVID-19. The University of Chicago’s Becker Friedman Institute’s data proves that people are twice as likely to have their salary decreased now than they were during the 2008 recession. This is affecting white-collar workers as well, who are not typically affected by economic dips, the Washington Post notes. The Institute explains that these cuts are how companies are avoiding lay-off, and yet they are likely just delaying the inevitable. Since salaries are profoundly lower, the population is far more hesitant to spend money and release it back into circulation to foster the dwindling economy. Many are afraid they will eventually lose their jobs anyway. The WP notes that “70% of the U.S. economy depends on consumer spending,” but inequality in the states is so deep, that it will surely take more than an attempt to keep people employed at jobs that already don’t pay well, to encourage spending. In a world that is built on antiquated systems designed to marginalize certain populations, it seems that a simple distribution of wealth is unsustainable. According to researcher William Gale, in just 2016, “the average Black household held $124,000 (or 54 percent) less wealth than the average white household.” He explains that “cultural change” is the only way forward, since there have been generations of Black families subjugated to unfair systems. He concludes that this is not about “public policies alone,” but rather about a social revolution.
Rejecting the premises