The Cure for Inequality in Times of Pandemic: A New Social Contract

di Eleonora Maria Mazza Micara - 31 Ottobre 2020

from Rome, Italy

   DOI : 10.48256/TDM2012_00143

The Inequality Crisis

As of October 2020, COVID-19 continues to affect the daily lives of the international community, exacerbating former political, economic and social crises. Yet the outbreak of the pandemic has positively accelerated the need for a green revolution and climate mitigation measures: the transition towards renewable energies and the ever-increasing legislative safeguards for the environment have further demonstrated that cooperation remains key for the well being of future societies. In fact, in order to tackle such posing pressures, civil society, private enterprises and governments are renewing their efforts to address global challenges such as climate change and environmental degradation. 

Nevertheless, the health crisis has highlighted major issues to be addressed in most States’ agendas that fall under the inequality umbrella: healthcare inefficiency, social turmoil and economic stagnation. Yet so far there has not been an effective equity-based strategy towards the eradication of inequalities and the achievement of economic justice. Consequently, the creation of a new social contract addressing rising inequalities will play a pivotal role in guaranteeing long-lasting political stability, reinforcing social care and fostering economic growth. It’s time to care, because “inequality is out of control” (Oxfam, 2020).


Inequalities on the Rise as the COVID-19 Pandemic Endures

According to the UN Secretary-General António Guterres (2020), “the pandemic has demonstrated the fragility of our world: it has laid bare risks we have ignored for decades, inadequate health systems, gaps in social protection, structural inequalities, environmental degradation, the climate crisis”. In fact, the epidemic has worsened the living standards of the poorest segments of society: in addition to the economic costs further aggravated by COVID-19, the sanitary costs risk increasing the monetary burden on families that are struggling to make ends meet. The coronavirus outbreak has further highlighted inequalities in the access to health care services, negatively affecting sanitary care when facing the virus’ symptoms. 

States should develop national roadmaps that take into account the increasing societal fragmentation. The most vulnerable are likely to become even more vulnerable:  “women’s unpaid care work has increased significantly as a result of school closures, and nearly 60 percent of women work in the informal economy, which puts them at greater risk of falling into poverty” (Guterres, 2020). 

Source: Oxfam, 2020

Gender Inequality

Gender disparity is strongly linked to economic imbalances. “Globally, men own 50% more wealth than women, and the combined wealth of the world’s 22 richest men is more than the wealth of all the women in Africa” (Oxfam, 2020). According to Oxfam’s report, the “monetary value of unpaid work globally for women aged 15 and over is at least 10.8 trillion USD dollars annually, three times the size of the world’s tech industry” (Oxfam, 2020). In a post-COVID-19 scenario, these inequalities will have to be properly addressed, with a revision of existing labor market regulations. 

The rise of unemployment due to the pandemic has severely worsened the living standards of many, but the upsurge of coronavirus cases can create the conditions for a solid change to tackle inequalities and establish key actions to achieve equity. “COVID-19 is a human tragedy, but it has also created a generational opportunity, an opportunity to build back a more equal and sustainable world” (Guterres, 2020).


Economic Sustainability

“Without decisive action things will get far worse: ageing populations, cuts in public spending, and climate change threaten to further exacerbate gender and economic inequality and to fuel a spiraling crisis”. Environmental and social sustainability cannot occur without economic sustainability. Addressing economic inequalities will avoid the aggravation of social inequalities that lie at the heart of social tensions, and create the conditions for improved living standards. “High levels of inequality are associated with economic instability, corruption, financial crises, increased crime and poor physical and mental health” (Guterres, 2020). 

Economic sustainability hinges upon all the facets of modern societies, and it would determine a domino effect, as economic and social inequalities are intertwined, one causing the other. “Discrimination, abuse and lack of access to justice define inequality for many, particularly indigenous people, migrants, refugees and minorities of all kinds. Such inequalities are a direct assault on human rights” ”(Guterres, 2020).


Engagement of All Stakeholders

International cooperation remains crucial for developing a roadmap towards socio-economic prosperity. In order to develop a new social contract tackling inequalities, it is crucial for all stakeholders to be actively engaged also at local, regional and national level. Public-private partnerships will be key drivers for the coordination of actions devoted to the dismantlement of inequalities. More specifically, governments and companies will have to join forces in the fields of training and innovation. The creation of a new social contract that addresses inequality will highly depend on the quality of interactions among stakeholders.


The Recipe for Economic Justice

According to the latest report by Oxfam and Development Finance International based on the analysis of 158 governments and their policies, there are three major pillars tackling the inequality crisis: public services, progressive taxation and labor (Oxfam and Development Finance International, 2020). The Commitment to Reducing Inequality Index has ranked 158 governments on their policies in three pillars that are central for dismantling current inequalities:

Source: Oxfam and Development Finance International

Commitment to Reduce Inequality

Public services – education, health and social protection
Progressive taxation – corporate income tax and tax collection
Labor – women’s rights and minimum wage


The Commitment to Reduce Inequality Index provides the top 10 countries with the best performance by calculating these three pillars; for instance Norway and Denmark ranked very high with regards to labor regulation, while they rank lower in terms of taxation.

Source: Oxfam and Development Finance International, 2020


The new social contract to reduce and in the long-term eliminate inequalities provides the perfect ground for economic justice. For instance, collaboration among different stakeholders might contribute to the development of innovative technologies and the creation of new jobs, which will be a testing ground for equalizing incomes.

Final Remarks

The cure for inequality resides within societies’ ability to create a new social contract, which will have to include major changes such as all stakeholders’ active engagement and new labor market regulations. “Addressing inequality has therefore been a driving force throughout history for social justice, labor rights and gender equality” (Guterres, 2020). A new social contract will imply the revision of national legislation, social practices and economic priorities vis-à-vis COVID-19, as to leave no one behind. “While the rich and powerful elite may be able to buy their way out of facing the worst of these crises, the poor and powerless will not” (Oxfam, 2020).


António Guterres. (2020). Tackling Inequality. A New Social Contract for a New Era (online). Available here (Accessed 3 October, 2020).

Forum Meccatronica. (2020). Bonomi: “Un patto tra politica, imprese e parti sociali per rilanciare il paese e la produttività (online). Available here (Accessed 2 October, 2020).

McKinsey Global Institute. (2020). The social contract in the 21st century (online). Available here (Accessed 5 October, 2020).

Oxfam. (2020). Fighting Inequality in the Time of COVID-19 (online). Available here (Accessed 10 October, 2020).

Oxfam. (2020). Time to Care (online). Available here (Accessed 8 October, 2020).

World Economic Forum. (2014). The New Social Covenant (online). Available here (Accessed 4 October, 2020).

World Economic Forum. (2020). 5 shocking facts about inequality, according to Oxfam’s latest report (online). Available here (Accessed 10 October, 2020).

World Economic Forum. (2020). 5 things COVID-19 has taught us about inequality (online). Available here (Accessed 2 October, 2020).

World Economic Forum. (2020). These countries were doing best at tackling inequality before COVID-19 (online). Available here (Accessed 11 October, 2020).



Autore dell’articolo*: Eleonora M. Mazza Micara, BA Politics, Philosophy and Economics, MA in International relations presso l’Università LUISS Guido Carli di Roma, e MA in Governance and Global Affairs presso l’Università MGIMO – Moscow State Institute of International Relations di Mosca. 


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