The Covid-19 pandemic is arguably the biggest and most historic world event since World War Two. While the immediate impact of the virus has been devastating on the health of both individuals and economies, there are also likely to be long-term changes in the way we live our lives as a result of the pandemic.
The recently published World Economic Forum Covid-19 Risks Outlook report highlighted some of the major challenges facing the world as a consequence of coronavirus. Here’s a summary of what they found.
The long-term economic impact
The economic impact of coronavirus has been severe. More than nine million workers in the UK have been furloughed, and the Organisation for Economic Cooperation and Development (OECD) predicts that the UK’s unemployment rate will rise from 3.9% to 11.7% by the end of the year. A second wave of the virus could see that rate rise to almost 15%.
The WEF report says that, as countries emerge from the immediate health crisis and restart their economies, changed working practices, attitudes towards travelling, commuting and consumption will change employment prospects.
The International Labour Organisation has already identified that the SME and informal sectors will have particular difficulty in sustaining and recovering business.
In the period before a vaccine and new drugs to treat symptoms are developed, there is likely to be a continued contraction in travel and the hardest hit industries, such as tourism and hospitality. Not all those people who have been laid off will come back to work and businesses will likely use fewer employees in the future.
The future could be particularly stark for younger people. Youth employment in developed economies has only just recently returned to the levels seen before the global financial crisis of 2008/9 while, in developing economies, youth unemployment has risen steadily, creating a real risk of social unrest.
The impact on our wellbeing
Changes to working patterns are also likely to have a sustained impact on wellbeing.
The WEF report highlights how working remotely:
- Increases the risk of isolation
- Increases the risk of alcohol dependency and smoking
- Can result in bad backs through poor ergonomic posture.
A positive that may come from the virus is that employers have increasingly begun to accept that they have to protect their workers to survive and thrive, and not just rely on the state. This could see a long-term change in attitude in the historic public vs private debate.
Again, young people have also been affected by the economic and societal disruptions of the lockdown. As one teenager told the BBC: “The life you thought was boring, is the life you’re hoping to get back to right now.”
A growth in inequality
The WEF concludes that: “The long-term societal impacts, such as an exacerbation of inequality and changes in consumer behaviours, the nature of work and the role of technology – both at work and home – will change our way of life forever, for us as individuals, as a workforce, and as a society.”
The timing and speed of economic recovery is likely to exacerbate inequality, mental health problems, and lack of societal cohesion. It is also likely to widen the wealth gap between young and old, as well as posing significant educational and employment challenges.
Studies have already established that the economic impact of Covid-19 has hit poorer people and those in more socially disadvantaged groups disproportionately hard. In many places, people are having to face the moral dilemma of choosing between going to work to generate income for essentials or staying at home to protect their health and that of their family.
Continued exposure to health risks faced by essential workers, who are often among the lowest paid, raises the concern of heightened death rates amongst people in these roles. This, in turn, highlights societal, income and health inequalities.
The pandemic is also likely to result in inequalities for younger people.
Currently 80% of the world’s students – more than 1.6 billion young people – are not attending school. And, many students in poorer communities find it hard to work at home or lack the necessary means of accessing online courses.
The consequences of these educational inequalities, especially for girls and young women, will disadvantage them in labour markets and further exacerbate inequality.
What can businesses do to improve the long-term outlook?
The WEF argues that, from a business perspective, companies generally cannot be successful in societies that are not functioning well. So, businesses need to bring their skills and assets to help invest in a better society.
Businesses need to focus not only on a healthcare solution, but a recovery that is focused on climate, sustainability, and on societal risks, such as inequality, mental health, the lack of societal cohesion and inclusion. If we do not do this, then the gaps in inequality – especially financial – are likely to remain and increase.
The report concludes: “As responsible businesses, we must grab this chance with both hands to help society to adapt and come back. A clean, green and sustainable recovery that allows growth to return, but with people and communities at the centre of our efforts.”