How do we seize the opportunity to expand equality?

By

EY Global

Multidisciplinary professional services organization

13 minute read 20 Aug 2020
Related topics COVID-19 Gender equality

The COVID-19 pandemic has exposed structural flaws in economic, political and social systems. It’s also a chance to build greater equality of opportunity.

In brief
  • We face two pandemics today: one from the illness and its disruption; one rising from inequality.
  • Income, education and health inequalities are amplified in today’s environment.
  • Companies can and should act today to help address these inequalities.

This is a story of two pandemics. The first is causing disruption: a sudden transition to working from home; adjusting to wearing masks, social distancing, and liberally applying hand sanitizer; rapidly switching to online shopping, even for groceries and other necessities. Without downplaying the tragic outcome of the pandemic, coping with it in this story has been, for many, an inconvenience.

The second story? COVID-19 is an existential threat. It’s deadlier in terms of mortality; exacerbates economic insecurity due to sudden job loss (in the US, often taking health care with it) and few savings to fall back on; continually exposes people to COVID-19 because of an inability to work from home and the necessity to work to survive. This is the reality of the pandemic for billions of people, disproportionately women, people of color, ethnic minorities, young or older workers, refugees and migrants, LGBTQ and other under-represented groups.

To be clear: the pandemic is not creating new disparities. But, it’s highlighting critical structural failures in policy decisions, infrastructure and employment globally. The question is what can be done, not only to address problems now and for what comes next, but those actions we can collectively take to leapfrog barriers, advance equality and address the inequalities that are present in our economic, political, and social structures and systems. The time is now to act to create a world that is equitable for all. Julie Teigland, EY EMEIA Area Managing Partner and EY Global Leader – Women. Fast forward.

The time is now to act to create a world that is equitable for all.
Julie Teigland
EY EMEIA Area Managing Partner and EY Global Leader – Women. Fast forward

Types of inequality

Imagine an iceberg, with only a small portion visible above the water. Beneath lies a vast, unseen danger. This pandemic is improving our clarity; it has cleared the water to allow us to see not only the very deep portion of the iceberg, but its wide shelf with jagged corners and peaks just beneath the surface.

This shelf represents the inequities present today, deeply embedded in processes and protocols, systems and structures. We can navigate around the iceberg – we’ve collectively done that for decades. We can also appreciate the deeper parts of inequities as a long-term threat. But we now have a clear view of that wide shelf that seems to block our ability to navigate to safer waters. We have an opportunity to chip away at the ice and break through.

We see an iceberg comprising three main types of inequality. While others exist and other issues are present, these cover the majority of issues facing our world today:

  • Income inequality– the disparity between individuals’ personal incomes and ability to live on their wages, the wage gaps and disappearing middle class; increased numbers of informal and precarious workers as a result of the pandemic, conflict and displaced individuals
  • Education inequality – the disparity in accessing basic education resources across portions of the population, in the quality of instruction offered, access to early childhood instruction, digital access for remote instruction, access to affordable quality tertiary education and ongoing training
  • Health inequality – the disparity in access to health care services, how individuals are treated by health care providers, involvement in trials and development of therapeutics and treatments for diseases and conditions, the care economy, and the distribution of authority and decision-making across health care organizations

Crossing each of these inequalities are the intersections of gender, race, ethnicity, LGBTQ, social class, education levels and other demographic characteristics, adding complexity and nuance to each of the three inequalities that we’ll examine in more depth in the weeks and months ahead.

For now, we want to explain what they are, why they matter, and how leaders can begin thinking of ways to seize this opportunity to build not only a better working world, but a world that works better for everyone. While the root causes of the inequalities are complex and deeply embedded in the economy and society, organizations can take actions now, which will create long-term improvement and value for our world.

Income inequality

Since the great recession of 2008, wages and real income growth has stagnated globally while costs of basic goods and housing have increased.

In March 2020, the International Labor Organization (ILO) estimated up to 8% of the world’s people1 could be forced into poverty as governments shut down economies to control the spread of COVID-19. In May 2020, the ILO predicted 1.6 billion informal economy workers will be out of work completely or have dramatically reduced hours. The closures in the second quarter of 2020 could be as much as 305 million full-time jobs.2 Combined with the fact that only one in five workers are eligible for unemployment benefits globally3 and the situation is truly dire.

Parts of the economy already limited in opportunities (for ethnic minorities, people of color, women, young or older workers, refugees and migrants, LGBTQ, and other under-represented groups) are disproportionately affected by this economic downturn. Nearly half of the world’s employed population works in the service industry, with an overwhelming majority of these workers coming from these under-represented groups.

When low-wage earners, such as restaurant workers, lose their jobs during business closures forced by the pandemic, short-term policies such as the direct cash payments from the stimulus package are helpful, but real structural change is needed to provide long-term benefit.

Stagnant income and wage growth, combined with increased costs for housing and other basic needs over the past 20 years, pushed larger portions of people into lower income brackets in every Organisation for Economic Co-operation and Development (OECD) country. The setbacks from the 2008-2009 Great Recession were not regained before the pandemic started. Individuals with higher levels of education and greater employment prospects recover more quickly in economic crises than those with basic levels of education, resulting in a 5% decline, on average, in employment at the bottom of the economic pyramid even five years after the crisis ends.4

The majority of people in the world don’t have savings or financial reserves, even in the richest countries. In the US, up to 25% of people say they do not have sufficient savings and funds to cover three month’s of expenses.5 Despite headlines indicating household savings rates are growing, the average household globally does not have the ability to withstand a prolonged economic recession.

Over the course of their lives, women have fewer financial resources due to wage inequality, and interrupted or limited employment. Retirement savings and investment accounts are on average one-third lower for women compared with men. The pandemic and economic shutdowns have increased the likelihood that 30% of both men and women at retirement age will face poverty. 6

On average, the poverty level across OECD countries for people older than 75 is about 15%–-35% points higher than those aged 66 to 75. Under existing laws and regulations, globally, only 42% of future pensioners can expect to receive some form of financial retirement assistance from the public sector.7

The private sector has a key role to play in helping to close the income gap. Examples of specific actions include:

  • Review remittances and rewards programs for the bottom of the organizational pyramid, including those who support the organization, and yet are not on your payroll, to ensure cost of living or other increases are proportional
  • Review promotion, remuneration and reward programs to ensure wage gaps are eliminated at all levels and stages of the employee life cycle
  • Consider progressive or differential benefits to help offset costs of care (child, dependent, elder, etc.) for workers at the lowest earnings levels
  • Consider requirements in supply chain services agreements that demand adequate levels of remittance and similar benefits for those workers supporting your organization
  • Review retirement and pension programs’ actuarial structures to ensure women and under-represented groups are equitably covered
  • Review internal messaging for themes and content of interest and importance for women and under-represented groups about retirement or pension planning
  • Remove financial jargon and assumptions that the individual would be looking primarily for high rate of return investments
  • Review philanthropic and social-enterprise-based investments to ensure housing, transportation, digital and other infrastructural efforts locally are addressed
  • Provide reskilling and upskilling opportunities for all workers, including basic literacy, numeracy and digital skills as part of regular duties
  • Review organizational roles for essential or mission critical status within a broader stakeholder context, including the community and suppliers

Education inequality

Far more than access to, attendance in, or completing basic education levels, online or remote programs, reskilling, vocational and other alternatives are essential to improving opportunities for life-long employment. 

As debate continues about whether to reopen classrooms and universities around the world, uncertainty about how and when a generation of young people will be able to get to their studies continues to be present. This uncertainty does not seem to include a recognition that, for many around the world, education is not a given nor easily accessed. Globally, more boys than girls complete secondary level education. Only in a few countries do we see equality in terms of boys and girls graduating from secondary levels and moving to tertiary programs.

There are a variety of approaches to address the costs of tertiary and university tuition, but there’s increasing evidence showing those who complete university programs have greater life-long earning and greater employment opportunities compared with those without a university-level degree.

Before the pandemic and subsequent shutdowns, children in lower-income households had fewer educational opportunities beyond formal schooling – including lack of access to the internet or a computer to participate in distance learning – even later in life. In developing nations, poor educational infrastructure leads to the few physical schools being closed and no additional learning or mental enrichment is possible. Since the shutdown, this is creating significant gaps in students’ ability to retain and build upon content learned to date. The very people needing the support the most to increase their employment opportunities are the ones suffering the most.

Public spending on education is uneven at best and the quality of instruction is highly variable across locations and grade levels. Most OECD nations have minimum standards for students to progress to secondary or tertiary education levels. Unfortunately, these standards and requirements are not future-fit and focused on the skills and knowledge needed for these children to use in their lives. Part of this is due to a lack of value associated with teaching as a profession in most countries, and the view by governments that education is an expense, not an investment.

Early childhood education (meaning before formal schooling starts around age 6) is a critical success factor for long-term health, well-being and economic independence. The opportunity for young children to gain exposure to reading, numbers and other topics early in development was limited in many locations and is further constrained by the shutdown of childcare facilities and schools as a result of the pandemic.

The apprenticeship programs typically supporting trades and skilled labor roles are being reinvented to support technology and technical roles. These and other programs for school leavers provide alternatives for individuals to learn and gain valuable skills.

Organizations need to:

  • Review educational requirements in role descriptions and job postings, assessing if degrees are truly required versus certificates or experiential based knowledge
  • Consider alternative approaches to training potential hires, particularly in roles requiring technical knowledge including apprenticeships or work-study combinations (internships, externships, etc.)
  • Invest in education systems through direct funding, time and access, including primary and secondary levels in your communities
  • Offer needed technical knowledge requirements free or at cost (to be reimbursed should the individual be hired into a role) online
  • Provide upskilling and reskilling efforts to all employees regardless of rank or classification, and require learning throughout levels to ensure your workforce continues to develop
  • Consider tuition reimbursement or offsets for employees seeking additional training or degrees

Health inequality

Life expectancies are dropping in many parts of the world based only on one’s economic status.

One area previously unseen before the pandemic is the disparity in health care around the world. On almost every level, there are wide gaps between those who can access services, pay for care, are the focus for research, and how individuals are treated when seeking care. Even in countries with universal health systems, disparities exist. The European Parliament estimated the losses linked to health inequities cost approximately 1.4% of gross domestic product across the EU.8

In some cases, the level of health inequality is directly related to income: even where universal health services are provided, the quality of the care can be different for those who can afford private doctors, facilities or treatments. Additionally, when individuals at the lowest income levels seek care, conditions and diseases are complicated by poor living conditions and poor food security.

Levels of research investment into age-specific diseases and conditions vary across the world, and in some markets gerontology or geriatric medicine is not seen as a distinct specialty. This results in older individuals being misdiagnosed or the interactions of conditions and treatments not being fully understood. The need for greater focus on age-specific conditions and treatments is growing. The number of people aged 65 or older is projected to grow from an estimated 524 million in 2010 to nearly 1.5 billion in 2050, with most of the increase in developing countries.9

Similarly, diseases and conditions associated with a minority group, gender, specific lifestyles or economic status do not receive the same levels of investment for research on treatments. Malnutrition (25% of children)10 and obesity are common among lower income levels, but don’t receive significant levels of investment. In fact, 87% of premature deaths due to conditions other than communicable diseases (chronic conditions such as high blood pressure, diabetes and high cholesterol, etc)11 occur in low-and middle- income countries due to health care costs. Similarly, reproductive and maternal health issues and mental health conditions are under-funded.

Even before this pandemic, men from the poorest neighborhoods in the US could expect to die 15 years earlier on average than men from the richest areas due to health inequality. For women, the respective gap is 10 years in the US. In the UK, taking the metro train east from Westminster represents nearly one year of life expectancy lost. Children from the poorest 20% of households globally are nearly twice as likely to die before their fifth birthday as children in the richest 20%. 12

The United Nations found that 70% of the leaders in health are men — more than 80% are from high-income countries, and more than 90% were educated in high income countries. Fewer than 30% of ministers of health worldwide are women; and men outnumber women on the boards of global public-private health partnerships by two to one.13 Why is this important? The lack of diversity at the top continues to reinforce decisions about what to fund, where to focus and who to treat that are not representative of the entire population.

Organizations need to consider how health inequality impacts their workforce, regardless of their sector.

  • Expand access to health care and other related health services benefits to ensure all members of your workforce have affordable care covering conditions and diseases that may be chronic in nature
  • Offer physician services or wellness programs to all employees for free or at very low cost
  • Offer low cost or improve access to healthy meals on site and for worker families

Healthcare and wellness sector organizations must:

  • Increase diverse representation in clinical trials
  • Increase diversity in the research portfolio
  • Review care procedures to ensure bias is not influencing protocols

What will you do?

The economic and social fluctuations will continue through 2022. The iceberg of visible issues is huge and can be overwhelming for leaders, as they navigate financial stability, return to work considerations, operational considerations and stakeholder management. Yet, eyes need to turn toward the previously unseen issues COVID-19 has exposed. Organizations need to be deliberate in how they review their policies and procedures, and challenge assumptions about women and under-represented groups. We have an opportunity to refocus the global economy around quality of life and measure success in very different ways — in short, to build an equality economy.

Summary

The pandemic is amplifying key structural inequalities and inequities worldwide. Most notably, these are income inequality, education inequality and health inequality. Private sector organizations can take action to address these gaps and start to close them as the public sector focuses on policy reform.

About this article

By

EY Global

Multidisciplinary professional services organization

Related topics COVID-19 Gender equality