New study shows that the ranks of the global middle class fell for the first time since the 1990s, widening inequality.
Covid-19 showed the world undeniable evidence of the inequities faced by under-represented people. If government and business leaders don’t make radical changes, conditions won’t just stay bad, they will get worse, according to key decision makers who met this week at the fourth annual Bloomberg Equality Summit.
The U.S. can’t be considered fully recovered until Black and Hispanic employment has recovered as much as White employment even if that means federal policies result in short-term inflation, Cecilia Rouse, chair of President Joe Biden’s Council of Economic Advisers, said in an interview. Former American Express Co. Chief Executive Officer Ken Chenault and Facebook Inc. Chief Operating Officer Sheryl Sandberg also offered advice on needed changes.
The pandemic, which has killed 2.7 million people globally, including more than half a million in the U.S., has disrupted economies, closed borders and set back the employment and education of poorer people across the world. As rich countries rush to distribute vaccinations and re-open their economies, the same disadvantaged groups hardest hit by Covid are being left behind by the cure, said Jordan’s Queen Rania.
“I think the moment for radical change has arrived,” Queen Rania said during a discussion on the wealth gap this week, pointing out that extreme poverty is on the rise for the first time in two decades. “Clearly the system is not working.”
In a study published Thursday, researchers at the non-partisan Pew Research Center found that the ranks of the global middle class — those earning $10-$50 per day — fell by 90 million people to almost 2.5 billion last year because of the Covid-19 pandemic. That helped swell the ranks of the poor, or those living on less than $2 a day, by 131 million, Pew estimated.
Government policy, from minimum wage to family care, needs to be steered more to benefit under-represented groups to ensure everyone recovers equally from the pandemic, Rouse said.
Vaccine nationalism is complicating the equitable distribution of Covid-19 treatments and may harm efforts to deliver 2 billion doses to poorer and middle-income nations by year-end, said Adar Poonawalla, head of the world’s largest vaccine maker, the Serum Institute of India. Health-care system mistrust by people of color remains a factor, said Keith Churchwell, president of Yale New Haven Hospital, speaking on one of more than 20 panels and interviews.
Facebook Inc., Procter & Gamble Co, Hewlett Packard Enterprises Co., and Visa Inc. were among companies reiterating their commitments to make changes, such as adding more paid leave, promoting more under-represented workers and hiring new diversity executives. U.S. companies should work together to set targets for improving diversity in their ranks, especially at the highest levels, said Chenault, who also is a co-founder of OneTen, a coalition of companies working to create 1 million middle-class jobs for Black Americans within 10 years.
“Many companies have tried this on their own, a few have been successful,” Chenault, now chairman of General Catalyst, told David Westin on the closing day of the summit. “But the truth is, large companies have not done well on diversity.”