As the nation begins to recover from the Covid-19 pandemic, the end of social distancing is in sight. Yet the removal of the two-metre rule looks as if it will turn out to be a rather myopic interpretation of an end to social distance. Whilst the health impact of the pandemic has been felt most severely by older people, the wider social and economic consequences of the pandemic are likely to fall on the shoulders of younger generations. In particular, the Covid-19 pandemic has exacerbated existing income and educational inequalities, raising concerns over future social mobility. If it becomes more difficult to move up the social ladder, people from disadvantaged backgrounds will remain poor and those from more privileged backgrounds will enjoy further prosperity. In this sense, we may be welcoming in an era of even greater ‘social distance’.
Recent research conducted by Fancourt and Bladbury (2021) at University College London outlines how the impact of Covid-19 has widened societal inequalities. They find that people’s experiences of the pandemic are largely dependent on their lives before the crisis. Their study shows that the financially vulnerable, ethnic minorities, young people, and those from lower socio-economic positions were affected far more severely than those with greater social privilege. This is despite the claim from British politicians that Covid-19 was the ‘common enemy’ that would unite the nation. Fancourt and Bladbury claim that out of those ‘who found their financial situation very difficult before the lockdown, 57% reported that things were even worse’ by July 2020. By November, this figure had increased to 70%, whereas ‘only 20% of people who were living comfortably before the lockdown felt that they were worse off in November’. In fact, 27% of those who had previously lived comfortably actually claimed that their financial situation had improved for reasons such as a forced reduction in household spending, returns from existing investments, and even profits generated directly from financial opportunities presented by the pandemic.
Further research by Major and Manchin (2020) at the London School of Economics demonstrates several factors that could have caused this Covid-19 class divide. In particular, they argue that the disproportionately adverse effects experienced by the young and the low-paid is a direct consequence of the virus’ decimation of the services and hospitality sectors, which primarily employ this demographic. Furthermore, they allude to research conducted by Avidu and Nayyar (2020), who claim that ‘occupations that are more amenable to home-based work are largely concentrated among higher wage deciles.’ Therefore, these workers were less likely to be furloughed or, worse still, lose their job, whereas ‘occupations that are less amenable to home-based work and therefore at higher risk are largely concentrated among lower wage deciles’. Both factors have exacerbated existing workplace divides and they provide further evidence for the largely unequal impact of lockdown. Major and Manchin express a concern that these inequalities could be difficult to eradicate and may persist for some time. Drawing on evidence provided by previous study on the effects of inequality following pandemics, they outline how, five years after other crises, the share of income going to the top two income deciles increased relative to the bottom two income deciles. The relationship between income inequality and social mobility is explored by Wilkinson and Pickett (2010) in their book ‘The Spirit Level’. They show how countries with bigger income differences tend to have much lower social mobility. The explanation that they present is that the effect of downward prejudice is far greater in countries with less social equality. Thus, larger inequalities create a more rigid social structure that makes movement up the social ladder ever more difficult for the disadvantaged. Entrenched income inequalities and declining social mobility are likely to be a major threat to prosperity as the economy moves out of the pandemic.
Arguably the greatest driver of social mobility in modern market economies is education. A higher level of education is generally understood to lead to higher income and social status. Yet, with schools closing across the country from late March to the middle of May in 2020, and again for the first few months of 2021, there are fears that the resulting learning deficit may have adverse, long-term effects on social mobility through its impact on educational inequalities. The consequences of school closures and the effectiveness of home-based learning has varied drastically across society for students at all stages of education. There is concern that recent attempts to narrow the achievement gap between those from disadvantaged backgrounds and those who come from privileged backgrounds could have been undone by the pandemic. A study by the Institute for Fiscal Studies (2020) sheds light on the effects of school closures on children’s learning and development. Over the course of the first lockdown, they found that children from wealthier families were spending 30% more time on home learning than those from poorer families. Not only were they spending longer studying: children from wealthier families also had access to better resources for home learning, such as computers and internet connectivity. By contrast, children from low-income families are more likely to be living in crowded, noisy, and substandard housing, since the quality of a child’s home environment is directly related to household income (Pickett & Wilkinson, 2010). The IFS note that more than half of the children from the least well-off families did not have access to a suitable study space.
Burgess and Vignoles (2020) find that ‘socio-economically advantaged parents also tend to compensate for any deterioration in schooling to a greater extent’. They are more likely to have the free time to spend on home-educating, interacting with their children and playing an active role in their educational development, than their working-class counterparts. Moreover, these parents were also able to mitigate their children’s loss of learning through the hiring of private tutors. Eyles et al (2020) claim that parents in the highest quintile of income were over four times as likely to pay for private tutoring for their children during lockdown than those in the lowest quartile of income. Without equality of opportunity, the ability of education to drive social mobility is significantly weakened. Worse still, school closures, especially in the first lockdown, came at pivotal moments in some students’ academic careers. This was particularly the case for students who were in year 11 and upper sixth. For some, the cancellation of GCSE and A-level examinations had hugely detrimental effects for their future prospects. Most crucially, research has shown that predicted grades do not accurately reflect the attainment of socially disadvantaged high-achieving students (Montacute & Holt-White, 2020) and therefore hinders their progression to higher education, resulting in long term damage to career prospects. In effect, progression to higher education for the class of 2020 was determined by a system that has shown to be accurate only 16% of the time and inequitable towards high achieving, low-income students (Montacute & Holt-White, 2020). Climbing the social ladder becomes practically impossible when the rungs are being removed from above you.
Throughout the pandemic, UK government policy has focused on protecting both the health of citizens and the immediate health of the economy. But it now seems pertinent to conclude, based on the evidence aforementioned, that government policy must shift, and instead focus on protecting the Covid-19 generation from the detrimental long-term effects of the very policies that were designed to safeguard them in the short run. Eyles et al. (2020) express concern that those workers who have been laid off may be heading towards long-term unemployment in the post-pandemic world. While social distancing measures are continually easing, Jung and Murphy (2020) argue that demand in many sectors is likely to remain subdued due to higher uncertainty and lower demand for products. High levels of long-term and persistent unemployment can lead not only to increasing inequality, but also to reductions in the skill levels of workers, health, and personal well-being (Machin & Manning, 1998). But unemployment is not only detrimental to the unemployed individual’s life prospects; it can also have a negative influence on the educational achievements of their children. Evidently, some educational and economic inequalities are interdependent, affecting each other in a vicious downward spiral that negatively impacts long-term social mobility prospects (Major & Machin, 2020).
For those who find themselves unemployed in the post-pandemic world, opportunities need to be available for re-training, so that individuals can be re-employed in other firms, or even other sectors. Unfortunately, in the UK, ‘the poorest adults with the lowest qualifications are the least likely to access training, despite being the group who would benefit most from them’ (Major & Machin, 2020). Thus, policy intervention is essential in order to provide the necessary investment in human capital to boost employment prospects, productivity, and real wages. In September 2020, Boris Johnson announced that free college courses will be available to adults who do not have A-Level or equivalent qualifications. Attendees are promised skills that are valued by modern employers and that they will also have the flexibility to study at a time and place that best suits them. While it may not be possible to save the jobs hit hardest by the pandemic, action on a governmental level provides an air of optimism about the creation of new employment opportunities. Additionally, Johnson also announced that apprenticeship opportunities will be increased, with the incentive of increased funding for small and medium sized businesses willing to take on apprentices. Vocational qualifications with large amounts of firm involvement are extremely economically valuable since, when skilled jobs go unfilled, the economy’s productivity and therefore its international competitiveness is likely to suffer. Research by the City and Guilds Group (2015) estimates that apprenticeships have an economic return of £16-£21 for every £1 of government funding. Moreover, they crucially provide another route for students who do not wish to attend university. Major and Machin (2020) argue that, in the long run, we require a viable vocational stream in schools that runs alongside conventional academic routes. This would require employers to work together with secondary schools to assess children on skills and talents that are not based on academia. They also stress that the pandemic has proven that some of the most crucial and essential jobs in the economy, such as delivery drivers and supermarket employees, do not require years of academic learning.
Moreover, the government’s goal should be to reduce learning gaps, exacerbated by online learning. Burgess and Vignoles (2020) point out the importance of early years of education to children’s development and call for additional supplementation to pupil premium funding, which supports disadvantaged children and is paid to schools. This extra funding could finance small group tuition that could help to diminish any negative impact that online learning has had on educational achievement. Undergraduates could perhaps be enlisted to tutor young children, so as to reduce the burden on teachers who are already overworked (Major & Machin, 2020). The tutors could benefit from this experience but also be financially rewarded. Students from low-income families are more likely to fund their studies by undertaking paid work, which is usually in sectors that have been hit hardest by lockdowns, such as hospitality (Burgess & Vignoles, 2020). Thus, many students have struggled to finance their studies during the pandemic. This tutoring opportunity could therefore help students that have suffered financially as a result of the pandemic. Of course, additional financial support for university students is also vital to ensure that current students can continue their courses, and to ensure that current applicants, specifically those coming from families under financial stress due to Covid-19, are not prevented from attending university (Montacute & Holt-White, 2020).
All of the suggested solutions involving policy change require an increase in public expenditure at a time when government debt is already at an alarmingly high level of 105% of GDP. This raises the question of how such policy changes should be funded. Increasing income tax would likely discourage work, and raising VAT is a regressive measure that would exacerbate growing inequality. Research conducted by Advani et al (2020) at the London School of Economics calculates that ‘a one-off wealth tax paid as one percent a year on wealth after mortgages and other debt above £500,000 per individual for five years would raise £260 billion’. Furthermore, setting ‘a threshold of £2 million, so it covers only individuals in the top one percent, it would still raise £80 billion’. This proves to be a significant amount since Advani et al. (2020) expect tax revenues to fall short of expenditure by only 20-30 billion when the economy once again reaches its pre-crisis unemployment levels. Furthermore, Major and Machin (2020) believe that a progressive wealth tax would help to fuel inclusive economic growth in the post-pandemic era, and that this could be an effective and equitable method of redistribution as it does not discourage work and is based on a person’s ability to pay taxes. It is blatant that the money to fund increased public expenditure will not just appear out of nowhere; there will be some who will be worse off. But the introduction of a new tax which only affects those with wealth above £500,000 after debt, as suggested by the LSE researchers, would ensure that it is only the very wealthy who are marginally worse off, which will have very little effect on their quality of life, but would help to significantly improve the lives of so many others. Perhaps it is only right that those who have enjoyed a peaceful lockdown in their second home in the country should give something back to those who have suffered immensely.
Whatever policy stance the government chooses to take, its core aim must be to reduce the interdependent problems of income and educational inequalities. If higher levels of inequality translate to declining social mobility, the threat of unfulfilled talent poses a serious problem to future economic prosperity. Action must be taken so that ‘long covid’ remains a medical phenomenon, and not a societal side-effect.
References
Advani, A., Chamberlain, E. & Summers, A., 2020. Is it time for a wealth tax to offset the economic damage from COVID-19?. [Online] Available at: https://blogs.lse.ac.uk/businessreview/2020/12/09/is-it-time-for-a-wealth-tax-to-offset-the-economic-damage-from-covid-19/ [Accessed June 2021].
Andrew, A. et al., 2020. Learning during the lockdown: real-time data on children’s experiences during home learning. [Online] Available at: https://ifs.org.uk/publications/14848 [Accessed June 2021].
Avdiu, B. & Nayyar, G., 2020. When Face-to-Face Interactions Become an Occupational Hazard: Jobs in the Time of COVID-19. World Bank Group , pp. 1-11.
Burgess, S. & Vignoles, A., 2020. The Covid-19 crisis and Educational Inequality. [Online] Available at: https://blogs.ucl.ac.uk/cepeo/2020/05/22/the-covid-19-crisis-and-educational-inequality/ [Accessed June 2021].
City and Guilds Group, 2015. The economic benefits of vocational education and training in the UK, London: City and Guilds Group.
Eyles, A., Major, L. E. & Machin, S., 2020. Generation COVID: Emerging work and education inequalities. Centre for Economic Performance, Issue 11, pp. 1-11.
Fancourt, D. & Bradbury, A., 2021. We asked 70,000 people how coronavirus affected them. [Online] Available at: https://www.ucl.ac.uk/epidemiology-health-care/news/2021/feb/analysis-we-asked-70000-people-how-coronavirus-affected-them [Accessed June 2021].
Jung, C. & Murphy, L., 2020. Transforming the economy after Covid-19. Institute for Public Policy Research, pp. 1-42.
Machin, S. & Manning, A., 1998. The Causes and Consequences of Long-Term Unemployment in Europe. Handbook of Labour Economics, Issue 400, pp. 1-48.
Major, L. E. & Machin, S., 2020. Covid-19 and social mobility. Centre for Economic Performance, Issue 4, pp. 1-11.
Montacute, R. & Holt-White, E., 2020. COVID-19 and Social Mobility Impact Brief #2: University Access & Student Finance. The Sutton Trust, pp. 1-11.
Office for Budget Responsibilty, 2020. Economic and fiscal outlook, s.l.: s.n.
Pickett, K. & Wilkinson, R., 2010. The Spirit Level. London: Penguin.
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