Covid – like every crisis – is grotesquely unfair.
The richer are getting richer. The poor are getting poorer.
My heart really goes out to people who have lost their livelihoods through this crisis.
Because I know there’s no justice in the world. Economics is a b!tch.
We’re seeing it already. Covid is hitting poorer people hardest.
In Australia, the Melbourne Institute Survey is showing that 24% of respondents said they are feeling moderately or very financially stressed, up from 21% in the previous month.
Melbourne Institute lead researcher Professor Guay Lim said unemployment was the clear driver behind the change.
“Closer analysis of the employed and unemployed within the survey data revealed that the proportion of unemployed who reported they were financially stressed increased from 18 per cent to 25 per cent, while the proportion of employed reporting being financially comfortable increased from 43 per cent to 47 per cent,” Professor Lim said.
Work from the Grattan Institute also shows that almost half of all working households had less than five weeks income at the bank, and one quarter – a full 25% of the population – have less than a weeks’ income:
A lot of these people are going to be totally reliant on either JobSeeker or JobKeeper – both of which are set to be wound up in September.
And sadly, this is looking like a global phenomenon.
In America, a recent Fed survey found that almost 40 percent of American households making less than $40,000 lost a job in March.
Federal Reserve Chair Jerome Powell on Wednesday said “the reversal of economic fortune” brought on by the coronavirus pandemic over the last two months in the United States “has caused a level of pain that is hard to capture in words.”
Statistics, though, can help paint a clearer picture of the crisis. In the same address, Powell said the Fed is releasing a survey Thursday which found that among people who were working in February, nearly 40 percent of those in households making less than $40,000 per year lost a job in March.
All told, Powell said, “the scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II.”
That’s the bottom, poorest section of the job-market, totally obliterated.
Over in the UK, the picture’s no better, where a third of Britain’s lowest-paid workers have lost their jobs.
The Resolution Foundation said 30% of those in the lowest income bracket had been affected by the damage caused to the labour market by the pandemic, compared with only 10% of those in the top fifth of earners.
The thinktank said that across the whole workforce, around 18% per cent of workers had lost work or been furloughed, including 25% of private sector workers. However, only 3% of those in the top income group had lost their jobs, with a further 6% being furloughed.
And this is always the way in times of crisis.
If you were struggling to get by, you get hammered.
If you’re were killing it already, then you get to write posts on social media about how nice it is to have time at home with the kids, with nothing to do.
And while the poor are getting slaughtered, the richest of the rich are making out like bandits.
We know that money-printing juices asset prices. We know that it boosts land and property values.
But no one cares.
The rich get richer and the poor get poorer.
Time to turn these tables, don’t you think?