Posted by on February 18, 2021 9:16 am
Categories: Society

Courtesy of the Austrian Economics Center


The coronavirus has dominated all of our lives in recent months. Radical paths were taken by politicians in the form of lockdowns to contain the pandemic. But we should recognize that even if the coronavirus is a (major) challenge for us, we always have to keep a holistic view of world events. Just as there are epidemiological factors to consider in this crisis, there are also economic, social, cultural, political and other health factors at play. It is precisely these other factors that are so often forgotten in the panicky reporting, in the constant, manic tracking of the current infection numbers, that we want to take a look at in our series “The Costs of Coronavirus Lockdowns” in the coming weeks.


Reminiscent to life in Groundhog Day, we are nearing the first anniversary of “two weeks to flatten the curve.” In all that time, most of the approaches taken by governments around the world revolved around lockdowns and various restrictions. Unsurprisingly, however, lower-income groups have been hit harder by these policies.


In the U.S., for example, Pew Research Center reported in an August 2020 study that since the coronavirus outbreak started, every fourth person has had trouble paying their bills (46% among the lower-income group; 19% among the middle-income group). To make ends meet, a third has dipped into savings or retirement accounts (44% among the lower-income group; 33% among the middle-income group), and almost every sixth person has borrowed money from friends and family (35% among the lower-income group; 11% among the middle-income group). When it comes to paying rent, 32% of the lower-income group found themselves in trouble, compared to 11% in the middle-income group.


Lower-income adults were also more affected than their middle-income counterparts when it comes to finding work and pay cuts. From those that lost their jobs, 56% of the lower-income group are still unemployed, while ‘only’ 35% of those with previously middle income.


Certainly, to some extent, these financial problems existed well before the pandemic hit. It seems the pandemic only has put oil to the fire. Time and time again, the pandemic has proven itself to have an impact on every person, not only those that came into contact with the virus. Time and time again, also, lockdowns and restrictions have proven to be something that disproportionally affects those already poor, whereas those wealthier are less hurt – or may even profit from this economic standstill.