A GDP contraction of a few percentage points, or even halving of the stock market, doesn’t capture the impact on those living hand-to-mouth
Covid-19, caused by novel coronavirus, doesn’t discriminate. It can hit us all. This reality underpins Indian Prime Minister Narendra Modi’s unprecedented 21-day lockdown, and other efforts across the world. But while the virus can be a great equalizer, its effects won’t be equal. Exposure rates vary by socio-economic status, and its long-term societal impacts will also not be evenly distributed. In the coronavirus era, have we fully understood the disposables divide?
To control the spread of Covid-19, the World Health Organization (WHO) recommends practicing respiratory hygiene. “This means covering your mouth and nose with your bent elbow or tissue when you cough or sneeze. Then dispose of the used tissue immediately." For much of the world, a disposable tissue is an unheard of luxury.
How does social distancing work when multiple family members share a single room? How do they maintain “clean zones"? An easy access, or lack of it, to disposables is a symptom of economic divides. The rich can afford “best practices" wherever they are, and they also are more likely to access quality healthcare. Even before the coronavirus, the elite have avoided the poor infrastructure of developing countries by private solutions, such as diesel generators, private electric wells, and individual water treatment units (common across even the middle-class in urban India). This emergency is only marginally different. The rich can avoid public transport, and it’s only the select white collar employees who can easily work from home. But what about people who don’t have a guaranteed pay cheque?
While the gig economy (like Ola/Uber) was meant to provide flexibility in the West, in India it was often tapping into surplus labour – but in both regions, it provides very little safety net. Shutdowns exacerbate these divides. For many poor, no work means no income. World Bank and International Labour Organization (ILO) estimates state that out of the employed population, 52% globally have regular wages. In the US, this is reportedly as high as 94%, but for India this figure is estimated to be only 22%. Even within countries, there is large disparity, by state in the US, and North versus South in India, and rural versus urban worldwide.
A lockdown creates unimaginable difficulties for a large population in the developing world that relies on the informal economy, only a part of which is labelled the gig economy. A lot of informal labour in India works as support staff for the richest quartile, including as maids, drivers, security guards, and delivery staff, not to mention in construction. Slums and make-shift tenements, estimated to be the norm for perhaps a quarter of the urban population of the world, aren’t just for the beggars or the unemployed. Workers often live here. Access to clean water is a daily challenge, and this makes it hard, if not impossible, for them to even wash their hands regularly. As one such Mumbai resident put it in a recent news article on coronavirus and best practices, “Wash our hands frequently? Sometimes I have to skip bathing to save water for cooking."
Social distancing will mean cutting down on such labour’s services. This has already led to exodus out of cities, as migrants and informal labourers are either kicked out or are unable to survive in the cities. This exacerbates the risks by both relocation and congregation. It can even risk resurgence after the lock-down is over due to clustering effects. “Safe zones" won’t remain so unless the entire country is safe. The hygiene divide spans not just affordability or availability, but even awareness. Poorer people may even use hand sanitizers (which is not as good as soap!), but they may not use enough. Washing properly (the 20-second rule) depends on access to clean water. This is before we get to issues of hoarding and price gouging, making access to sanitizers and disposables far harder for the poor. They can’t easily just go online and get deliveries.
When all this is over, economists will have a unique experiment from which to learn how much of the global economy is “optional", such as tourism, but also how utterly fragile many incomes are. We need to stop looking at income as a measure of economic welfare. Measuring wealth is better, but less universally captured, and much harder to get right even for individuals or households. Forget corporations who place value on abstract measures such as brand and goodwill. For many people, their largest wealth is locked up in their homes, and that’s not helpful during an emergency. A new metric of economic resilience should capture the ability of households to maintain their existing basic quality of life (without luxuries) under long-term upheavals.
If we tried to measure the ability of households to achieve a desirable quality of life, with minimum home sizes, 24x7 running water etc., then society would fare even more poorly.
If the Depression led to the US enacting the New Deal, programmes and policies that focused not just on ending the Depression but also enhancing government’s hand to balance competing interests of the market’s “invisible hand", maybe this emergency can spur deep structural changes across countries. It’s high time we moved beyond the average measure of an economic downturn and focused on its variance as well.
A GDP contraction of a few percentage points, or even halving of the stock market, doesn’t capture the far greater impact on those living hand-to-mouth. If we don’t fix these problems, it would only perpetuate a system where people aren’t just interchangeable cogs in a wheel, but also, for lack of a better word, disposable.
Rahul Tongia is a technology and policy scholar, a Fellow with Brookings India, and an Adjunct Professor at Carnegie Mellon University