We use cookies to help improve and maintain our site. More information.
close

April 06, 2020

The feedback loop of Covid-19 and inequalities - part 10 of our series

The Covid-19 pandemic hits some more than others. It will take years to find out why Italy's mortality rate was so much higher. We might never find out why young people without pre-existing medical conditions died. But the risks are not only confined to the short term. How societies emerge from this crisis will bring up new divisions, and politics will need to address them. 

In principle, the virus does not discriminate. It pushes people into critical health conditions no matter what their socio-economic status. But not everyone can protect themselves equally well against the virus. Masks and hand sanitisers were bought up quickly, leaving shop assistants, police officers and other workers unprotected while many white-collar employees can work safely from home. The Economist cites a study according to which about half of Britain’s highest-paid employees can work from home, but less than 10% of those in the four lowest-paid deciles can.

Socio-economic differences will also be a consequence of the lockdown. Mental stress and anxiety are likely to be higher in households where people are living cramped in small apartments without a secure income to go forward, or savings to fall back on. Low-paid employees in hotels, construction, restaurants or retail were the first to be let go in the lockdowns. They cannot work from home. How they will survive depends on the funding and design of government schemes, and on the length of the lockdowns. The entertainment sector will remain closed for an extended period, and travel will remain severely restricted. Leisure favourites like football games will be off for a long time. 

Angus Deaton took a historical perspective on earlier pandemics, writing that even if the virus itself might not discriminate, the gap between the rich and the poor will widen again after the crisis. People living in deprived areas are already facing higher mortality rates due to the death by despair. Expect the rate of domestic violence to go up, together with alcohol and drug abuse. All these costs are difficult to measure up against the daily death count from Covid-19. But they will matter for our societies in the longer run.

Compared to the financial crisis, the policy response has been markedly different this time. Boris Johnson and Donald Trump are acutely aware that they cannot win elections without the poor people' vote. The trillion-dollar package that the US congress adopted nearly unanimously contained not only tax cuts but also health care for those who cannot afford it. Every country rolled out its own package of stimulus measures. We expect campaigning in the post-Covid-19 era to be very different from what it was before. The 2008/2009 crisis was all about villains, this time it is all about heroes. To call for more money to invest into the health care system will be a vote winner. Favours for nurses and those who kept the country going under lockdown will come up under election pledges. This is not the time for austerity. 

The lockdown also unleashes structural changes for the economy, likely to the disadvantage the poor. While some countries have provided assistance to workers unable to perform tasks from home during the pandemic, certain categories of workers fall through the cracks of these programmes. There are also payment delays, for instance in Italy, meaning that people face a month or two without any income. This pushes casual workers into poverty and will leave huge scars in the tissue of the Italian economy. 

After the crisis is over, more business and education are likely to continue virtually. Universities may even reconsider their teaching programmes. Experts already warn that school closures will increase inequality. Under lockdown, teaching happens in virtual classrooms. The material available online will benefit the ones who know how to use it.  

All this will allow a new digital-savvy economy to emerge, to which the poorer people have less access to. Low-income households do not all have computers or high-speed broad band an the costs of internet services are non-negligible. Well-off people find it easier to adapt to this more digitised working world, which requires new skill sets. The gap between the poor and the rich is bound to widen.

So far the virus has hit mainly developed countries. Once the pandemic reaches the war zones in Syria or Libya or developing countries with high-density slums and poor health care systems, like India, we will see different impacts. EU countries have to prepare themselves to help developing countries by all means, including equipment and doctors. Otherwise they just pass the baton to China and Russia, both eager to show that they are there to help. 

Show Comments Write a Comment

April 06, 2020

How confinement affects mental health

In France there is a first study of how the lockdown affects mental health, according to Journal du Dimanche. The study is led by two psychiatrists and based on over 11,000 online questionnaires. it shows that mental well-being has been declining for everyone but some professions are more resistant. Those working in the health care system do better than others, possibly due to a sense of purpose in this crisis. After health workers are senior managers and social workers, possibly also because they are still engaging in work remotely. Farmers are near the bottom of the ladder, ahead only of students who are confined to small rooms and with broken social relationships.

The survey also looks at addictions. It shows an explosion of screen time, raising concerns about over-consumption and what it means for mental health. Among those drinking alcohol, only a quarter drink more than before while smokers increased their tobacco use significantly. More details are yet to come out of these data, including breakdowns by sex, age and other conditions. 

According to one of the authors, professor Nicolas Franck, the mental health effects kick in after 10-20 days of confinement. He calls for a progressive exit strategy to give people a perspective rather than leaving them in the unknown.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 22, 2020
  • Russia and Turkey double down in Libya
  • What to make of No 10's Brexit briefings
  • January 15, 2020
  • Philippe's not-so-generous compromise offer
  • What is Erdogan up to in Libya?
  • When it is noise and not a signal
  • September 11, 2019
  • What are the chances of a deal?
  • May 09, 2019
  • The EU's impossible dilemma
  • The horsetrading starts in Sibiu
  • May to bring withdrawal bill to Commons week after next
  • January 04, 2019
  • Will the AfD become the Dexit party?
  • Romania's corruption problem in the spotlight of its EU presidency
  • August 24, 2018
  • Towards a standoff between Italy and the EU
  • A short note on the diminishing role of economists in political life
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • December 20, 2017
  • Down with the gown
  • How to overcome the political gridlock in Italy
  • Varoufakis is suing the ECB
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 12, 2017
  • Macro in a state of denial
  • Where Schulz is vulnerable
  • Schäuble’s three party tricks
  • December 15, 2016
  • Scared of its own electorate
  • Towards a transitional deal
  • The comeback of Gerhard Schröder as the SPD's powerbroker
  • August 19, 2016
  • Brexit realities slowly dawning on the City
  • Opening shot for Hollande's campaign
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 18, 2020
  • EU hydrogen targets are a bunch of hot air
  • September 01, 2020
  • What just happened in front of the Reichstag?
  • When revolutions fail
  • August 17, 2020
  • How Putin could divide the EU over Belarus
  • The impossible mission of forming a federal government in Belgium
  • July 20, 2020
  • What will happen on January 1
  • July 06, 2020
  • Did Covid-19 escape from a Wuhan lab?
  • What to make of Angela Merkel's U-turn
  • June 23, 2020
  • EU-China relations - another Waiting for Godot moment
  • Troop movements on the German-Polish border
  • June 11, 2020
  • Europe needs to re-engage in Libya
  • Who should succeed Centeno?
  • June 01, 2020
  • Refugees' mass eviction in Greece
  • This is Brexit week again
  • May 22, 2020
  • Russia and Turkey double down in Libya
  • What to make of No 10's Brexit briefings
  • May 14, 2020
  • Another migrant wave from Turkey?
  • Hyperventilating about the German court
  • May 06, 2020
  • ...and what it means for the future of the EU
  • Ciudadanos saves Sanchez' Covid-19 plan
  • April 29, 2020
  • Will the first be the last? Virus edition
  • Don't hurry your exit strategy
  • April 24, 2020
  • Thinking through the details of a recovery fund
  • April 20, 2020
  • What if we are wrong?
  • April 15, 2020
  • Italy’s coalition disagrees about the ESM
  • April 08, 2020
  • Is Greece ready for virus spread in migrant camps?
  • On the future of the EU - the final part 12 of our series
  • April 07, 2020
  • Austria and Denmark - first to exit after Easter
  • All change in the UK
  • Eastern Europe’s unnoticed economic shock