Why do the rich need the poor

Corona exacerbates inequality - when the rich get richer and the poor get poorer

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The coronavirus does not differentiate between rich and poor? At most that's true from a medical point of view.

Inequality also existed before Corona. But the pandemic is compounding them. Take jobs as an example: The pandemic affects people in poorly paid jobs much more than those in well-paid jobs, says Florian Scheuer, economist and inequality researcher at the University of Zurich.

Above all, contact-intensive industries have been hit - such as the hospitality industry and tourism, explains Scheuer. “A lot of people work there with relatively low wages and temporary, seasonal jobs. You have a smaller financial cushion anyway. "

We are observing a long-term trend: wealth inequality at the very top has increased massively in recent years.
Author: Florian ScheuerEconomist at the University of Zurich

The result: The pandemic is widening the income gap even further. This is also confirmed by a representative survey by the union-related German research institute WSI with more than 6,000 participants: In November, 40 percent of those surveyed had less income due to the corona than at the beginning of the pandemic. Most of the losses were suffered by low-wage earners.

«I assume that the same laws were at work in Switzerland. The countries were affected relatively symmetrically by the pandemic, ”says economist Scheuer. Even the children of low-wage earners suffer more from the consequences of the corona pandemic than the children of high-income earners.

Homeschooling depends on the poor

Laurence Boone, chief economist at the industrialized countries organization OECD, refers to the sometimes months-long school closings. In the poorer sections of the population, the proportion of children who have Internet access is very small. “Many of them didn't have access to school material because of this,” says Boone. The gap to children from better-off families, who would otherwise get more help at home, is huge.

Tremendous dimension of the problem

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As a result of Corona, 1.6 billion children in the world are currently out of school, says Jaime Saveedra, the World Bank's director of education. He speaks of a major crisis. Add to this: “In poorer countries, many of these children will never go back to school. Because because of Corona, many parents have no more money left. "

An education gap with long-term consequences. Poorly educated young people find it harder to get into the labor market, as OECD studies show. And those with low qualifications were the first to lose their jobs after the financial crisis. They stayed unemployed for a long time. That could repeat itself after Corona, says OECD chief economist Boone.

That slows down the economic recovery. And increases income inequality even more. "It will be more difficult for the next generations to rise again if you are born into a poor family", says inequality researcher Scheuer.

Scissors continue to diverge

The inequality of wealth will also be further exacerbated by Corona. While millions of people lost their jobs to the pandemic, the ultra-rich like Amazon boss Jeff Bezos made them a lot richer. In the US alone, the wealth of the rich grew by a good $ 1,000 billion - a quarter more than before the crisis.

“Wealth inequality at the very top has increased massively in recent years. This has continued this year because their companies were little affected by the pandemic, ”says the economist Scheuer.

Growing inequality harbors political explosives. It could lead to «polarization and a strong drifting apart in political views. There could be a danger that the super-rich have too much political influence, ”warns Scheuer.

This increases social tensions. And stirs up the distrust of those who have been left behind in the governments. A dangerous cocktail - especially in times of crisis like these.

SRF 4 News, Rendez-vous from 4.1.2021, 12.30 p.m.

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  • Commentary by Roger Ebischer (RO.Ebi)
    It's amazing how much certain business models benefit during this time, while others suffer from it. Even if I don't want to criticize the work of the government, the competitiveness of some is many times better than that of those who have to shut down their shops for a few months.
    Agree agree to the comment
  • Comment from Stefan Pfister (Stefan Pfister)
    When UBS faced bankruptcy through its own fault, it was bailed out by the state with € 68 billion. Now that tens of companies are facing bankruptcy through no fault of their own, the state is claiming after half as much money that it cannot afford the rescue and the ideologues in NZZ & Co. are calling for no help and rambling about "purifying fire". Corona is nature. Dealing with it shows that (civil) politics only help the big ones, from whom it receives donations.
    Agree agree to the comment
    1. answer from Paolo Berwert (FamPapi)
      @Pfister, I agree with you for the most part. There shouldn't be too big to fail, and especially not in the financial industry. However, this gate was opened many decades ago in the USA and has unfortunately caught on worldwide. But to pillory only the bourgeois politicians is not enough. They are all politicians, regardless of their color.
      Agree agree to the comment
    2. answer from Ueli Lang (weekly resident)
      We don't want to forget that the federal treasury earned billions in the process and got back every single franc borrowed!
      Agree agree to the comment
    3. Show answers
  • Commentary by Roger Ebischer (RO.Ebi)
    It is always said that the state should not interfere in private affairs. But now certain businesses such as Restaurant (other examples could also be used) at a disadvantage. But the fact is that because of the disadvantage, other businesses such as shopping malls and others can still get out of this crisis better. So wouldn't it be fair if the preferred businesses now have to pay compensation?
    Agree agree to the comment
    1. answer from Paolo Berwert (FamPapi)
      @ RO.Ebi I agree with you, the sectors / companies concerned must be helped. But it's not that easy. There are also many companies that simply do badly, they would have died sooner or later anyway. The general public should now renovate them?
      And how can you exactly identify profiteers when the biggest are in the USA (Amazon, Alphabet, Microsoft). What kind of door do we open when the winners have to give the losers in a crisis? Very tricky ...
      Agree agree to the comment
    2. Show answers

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