The Rise of Financial Inequality from COVID-19 in Europe
Release date: 21 June 2020
The COVID-19 virus outbreak has brought an unprecedented and immense attack on the health, welfare, and economics of Europe's citizens. It is worth pointing out that the global economy is expecting to shrink by an astounding 3%. The United States and European economies are expected to contract by around 6%-8% (International Monetary Fund 2020), and over 200 million jobs are expected to be lost (International Labour Organization 2020). Most of these detrimental impacts stem from the imposed lockdowns and closings of restaurants, factories, businesses, and restrictions of outside leisure amongst its citizens. With that being said, another issue that has arisen that has further affected Europe's general population are the implications of inequality and poverty. These implications are believed to have caused significant and unfair wage losses and inequality to the population comprised of the lower-socioeconomic classes in European Countries.
The lockdown imposed by several European countries has created a financial burden for many individuals who cannot perform their jobs as home or remotely, which has to lead to further adverse economic effects of their respective countries. Based on research from (Palomino et al. 2020), those who are able to work remotely have shown to have higher wages than those who are not able to work remotely. Countries like Germany and Austria have fared better than countries of Poland and the Czech Republic, with workers working remotely. Two leading indicators that determine a country's ability for their people to work remotely during the lockdowns are education and type of job. Citizens with higher levels of education and full-time/permanent based jobs fare better financially than their counterparts with lower education and part-time/temporary based jobs. In effect, this has presented an increase in wage inequalities varying around 5-2.5% from country to country in Europe.
Altogether, the COVID-19 has presented a health concern and economic distress for European countries. Outside research, coupled with his article, highlights the hidden factors that determine the severity of adverse financial impacts for workers leading to how that impacts their respected European countries with these imposed restrictions and regulations stemming from the virus outbreak. The level of education, type, and structure of the job seems to correlate with the ability to work at home effectively, which has also corresponded to the financial and economic health of European countries and their workers.