By Lana L.

Though the global economic impacts of the pandemic are still playing out, two key upshots have emerged: unemployment and the rise of asset prices. Countless workers have been pushed into poverty while the fortunes of the wealthy have expanded, magnifying the already widening gap between the rich and poor. And like the pandemic, this is a global development. According to Oxfam International, Covid-19 could increase economic inequality in almost every country at once, the first time this has happened since records began over a century ago.

While these trends are global, and much media attention has been cast on Taiwan’s Covid response, much less has been paid to the economic effects of Covid in Taiwan.

Taiwan as a country is not as poor as Southeast Asian countries like the Philippines and Indonesia. However, poverty exists. The CIA World Factbook lists Taiwan as having a poverty rate of 1.5%, which may seem very low. But it must be noted that Taiwan sets its poverty line closer to poorer countries like China than rich developing countries like the United States and the U.K., and significantly below the upper middle-income-country poverty line (US$5.50).

The low poverty rate in Taiwan and China can be attributed to their low national poverty line, below the international poverty line (USD$1.90) and significantly below the upper middle-income-country poverty line (USD$5.50). The low standards suggest an underestimation of the true poverty rate. (Sources: The World Bank, National Bureau of Statistics of China, Ministry of Health and Welfare of Taiwan, United States Census Bureau, Trust for London)

Covid-19 has added momentum to the rising numbers of homelessness and low-income families in Taiwan. The nation’s unemployment rate exceeded 4% for the first time in five years. Considering the persistently high living costs, the inadequate rise in minimum wage in recent years under Tsai’s administration does little to economically empower those at the lower end of the wealth spectrum. (Wages stagnated even more under her predecessors, Chen and Ma.) Taiwan’s minimum wage is substantially lower compared to countries with comparable economic power, measured by GDP/capita, though its number of billionaires relative to its population exceeds others’ by a significant margin.

The proportion of billionaires in Taiwan is significantly higher than that in countries with similar GDP/capita values. (Sources: Forbes,World Population Review)
The proportion of billionaires in Taiwan is significantly higher than that in countries with similar GDP/capita values. (Sources: Forbes,World Population Review)

Covid highlights other systemic inequalities like race and gender that are interrelated with wealth inequality. The majority of countries critically lack the data of the demographic breakdowns of economic data. But the PMC (US National Library of Medicine) statistics that reveal African Americans have died from Covid-19 at more than twice the rate of their white counterparts in the United States suggest a significant disparity attributable to systemic discrimination.

Racial discrimination is not a distant issue for those of us living in Taiwan. It prevails in Taiwan, where oppression during this pandemic has become legally sanctioned. Numerous clusters of Southeast Asian migrant workers in Miaoli factories tested positive for the virus in early June. The mass contractions are a result of the county government’s prohibition of all migrant workers from leaving their residences. Unjustly confined into crowded dormitories and herded into groups for their work commute, migrant workers remain powerless against the violation of their fundamental freedom of transportation, and as a result, the virus.

Oxfam reports that 112 million women would not be at high risk of losing their incomes if they were equally represented as men in the workforce. The pandemic victimizes the same populations that have been historically marginalized. And while it sheds light on the deep-rooted inequalities, it will only reinforce them as the pandemic generates a wider economic gap between socioeconomic groups.

The legacy of the pandemic on equality

One of the biggest legacy Covid will leave in the post-pandemic world is an exacerbated wealth disparity by compounding the pre-existing vulnerabilities of the poor. Massive expenditures in finances and policy designs will be required to return inequality to its pre-pandemic level. The poor will come out of the pandemic in a weaker position as a result of wage cuts, unemployment, and new challenges like limited educational access due to their lack of digital access.

The digital divide jeopardized a disproportionate number of rural and low-income students ill-equipped in hardware or the internet when the Taiwan Ministry of Education decreed nationwide distance learning at all levels in May. Remote schools such as Sanlun Elementary School in Yunlin County could only provide six Wi-Fi sim cards to students in need, while a large proportion of families did not have internet services at home in even the largest cities, Kaohsiung and Tainan City.

A new awareness and commitment to equality in need

When economic divides deepen, it devastates entire societies, especially in troubling times like this. New York University researchers found that income inequality within a country correlates with higher Covid-19 infection rates. This suggests that the level of inequality may directly reflect society’s resilience against crises.

As long as the poor remain heavily infected the pandemic will stay alive with all of us. We must now, by necessity, renew our attitudes and efforts to correct the systemic inequalities that victimize them. Without making a systemic change, all of us are at risk.

Lana L. is a student journalist currently residing in Taipei. She is keen on data science and economic inequality and empowerment. She is also the author of the book Nonetheless.

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TNL Editor: Nicholas Haggerty (@thenewslensintl)

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