Write a paper discussing how income inequality was affected by the COVID-19 pandemic in the UK.
Solved by verified expertImpact of COVID-19 on Income Inequality
The COVID-19 pandemic has affected the UK economy in various ways, leading to significant changes in income distribution. The pandemic has caused job losses, reduced working hours, and decreased wages, particularly for low-income workers. These factors have increased income inequality in the UK, exacerbating existing disparities.
According to the Office for National Statistics (ONS), the pandemic led to a significant increase in unemployment rates in the UK, particularly among young people and those in low-paid jobs. The ONS reported that the number of people claiming unemployment benefits in the UK increased by 121% between March and August 2020, from 1.2 million to 2.7 million. This increase in unemployment has led to a decline in household incomes, particularly for low-income families.
Furthermore, the pandemic has led to a reduction in working hours, with many workers being furloughed or working reduce
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The pandemic has also led to a reduction in wages, particularly for low-paid workers. The Resolution Foundation reported that the lowest-paid workers were twice as likely to have lost their jobs or been furloughed compared to higher-paid workers. The Foundation also reported that the average hourly wage of the lowest-paid workers fell by 7.8% between February and November 2020, compared to a 0.2% increase for higher-paid workers.
Factors Contributing to the Impact of COVID-19 on Income Inequality
The impact of COVID-19 on income inequality in the UK can be attributed to various factors. Firstly, the pandemic has highlighted the existing inequalities in the UK labour market. Low-paid workers are more likely to work in sectors that have been most affected by the pandemic, such as hospitality and retail. These workers are also less likely to have access to benefits such as sick pay and paid leave, making them more vulnerable to the economic impact of the pandemic.
Secondly, the government’s response to the pandemic has also contributed to the impact on income inequality. The UK government introduced the Coronavirus Job Retention Scheme (CJRS), which aimed to protect jobs and support businesses during the pandemic. However, the CJRS mainly benefited higher-paid workers, as employers were more likely to furlough higher-paid workers rather than lower-paid workers. Furthermore, the CJRS did not provide support for self-employed workers, who are more likely to be low-paid.
Lastly, the pandemic has also highlighted the importance of digital technology in the economy. The shift to remote working has enabled some workers to continue working during the pandemic, while others have lost their jobs. This shift has benefited workers in high-skilled and higher-paid jobs, who are more likely to have the necessary equipment and skills to work remotely. On the other hand, low-paid workers are less likely to have access to digital technology and may not have the necessary skills to work remotely, making them more vulnerable to the economic impact of the pandemic.
Conclusion
In conclusion, the COVID-19 pandemic has had a significant impact on income inequality in the UK. The pandemic has led to job losses, reduced working hours, and decreased wages, particularly for low-income workers.
