Before the COVID-19 crisis, encouraging signs across a number of indicators suggested that income inequality was narrowing. In many countries, for instance, the incomes of the poorest people rose faster than the national average, though inequalities in other areas persisted. Now, the effects of the pandemic appear to be reversing any positive trends. Those with relatively low incomes are at risk of falling behind. The pandemic has also intensified structural and systemic discrimination. Emerging markets and developing economies are experiencing slow recoveries, widening disparities in income between countries. The number of refugees worldwide reached the highest absolute number on record in 2021; sadly, that year also saw a record number of migrant deaths. Meanwhile, the war in Ukraine rages on, forcing even more people from their homes and creating one of the largest refugee crises in recent memory.
The war in Ukraine is adding to already record numbers of refugees worldwide
By mid-2021, the number of people forced to flee their countries due to war, conflict, persecution, human rights violations, and events seriously disturbing public order had grown to 24.5 million, the highest absolute number on record. For every 100,000 people worldwide, 311 are refugees outside their country of origin. This is a 44 per cent rise from 216 per 100,000 people in 2015. In absolute terms, countries in Northern Africa and Western Asia were the largest regional source of refugees (8.4 million), followed by countries in sub-Saharan Africa (6.7 million), and Latin America and the Caribbean (4.5 million).
The ongoing war in Ukraine has created the worst refugee crisis in recent history. As of 23 May 2022, the movement of more than 6 million people from Ukraine to other countries has been registered, the majority of whom are women and children. In addition, at least 8 million people have been displaced inside the country to escape the conflict.
Large numbers of migrants lost their lives last year on sometimes treacherous migratory routes
Last year, 5,895 people died fleeing their countries via various – sometimes dangerous – routes. This surpasses pre-pandemic figures and makes 2021 the deadliest year on record for migrants since 2017, according to the International Organization for Migration's Missing Migrants Project. The widespread impact of the pandemic forced many people seeking safety, reunification with family, decent work and better opportunities to take risky migratory routes.
At least 3,411 people died on maritime and land routes to and through Europe in 2021 - the majority of migration-related fatalities recorded worldwide. On the overseas route in the Atlantic towards Spain's Canary Islands, nearly 1,180 deaths were recorded, the most fatalities on this route since data collection began in 2014. It was also the deadliest year on record for migrants along the border between the United States and Mexico, where at least 717 people died, 51 per cent more than in 2020.
COVID-19 increased relative poverty in many countries, but others bucked the trend
The proportion of the population living on less than half the national median income is an important measure of social exclusion, relative poverty and inequality of income distribution within a country. If this proportion grows, it indicates the poorest are falling behind in relative terms. Before COVID-19, 13 per cent of people, on average, lived on less than half the national median income. However, this average share masks wide variations, from less than 5 per cent in Kazakhstan and Kyrgyzstan to around 25 per cent in Brazil and South Africa.
Currently, only 18 countries have data for 2020, most of which are in Latin America and the Caribbean. Among those, two thirds saw rates of relative low income increase in 2020, suggesting that the effects of the pandemic have intensified social exclusion. However, other countries experienced large declines. Brazil, for example, lowered the share of people living on less than half the median income from 24.1 to 18.3 per cent, thanks to large social transfers targeted to the poorest people in that society.
The pandemic has caused a rise in income inequality, jeopardizing two decades of steady progress
The ongoing COVID-19 pandemic is exacerbating global income inequality. As a result, the steady progress over the last two decades is now in jeopardy. Projections suggest that between-country inequality rose by 1.2 per cent between 2017 and 2021, the first such increase in a generation. Before the pandemic, inequality was expected to have fallen by 2.6 per cent over the same period.
Forecasts suggest that income inequality within countries will also have increased in emerging market and developing countries. Although the magnitude of this increase is expected to be relatively small – around 1 per cent, on average – it halts the steady decline in income inequality seen in these countries since the start of the millennium. Worse yet, this increase may become entrenched, since pandemic-induced disruptions to education and the disproportionate adverse effects on low-income households may worsen intergenerational mobility. Meanwhile, high inflation and surging public debt levels may hamper countries' ability to support these vulnerable groups.
Discrimination remains widespread, with women and persons with disabilities at heightened risk
The spread of COVID-19 has intensified structural and systemic discrimination and pervasive inequalities, which harm millions of people and hold back every society. Addressing discrimination through evidence-based policies allows societies to transform into more inclusive, equal, resilient, just and sustainable systems anchored in human rights.
Roughly one in five people have experienced discrimination on at least one of the grounds prohibited under international human rights law, according to data from 49 countries and territories collected between 2017 and 2021. In countries where disaggregated data are available, women are more than twice as likely as men to experience discrimination on the grounds of sex. Moreover, women living in urban areas are slightly more likely to experience discrimination than their rural counterparts. Among persons with disabilities, it is pervasive, with about one third reporting personal experiences of discrimination.
Workers' share of national income is eroding, exacerbating income inequality
Labour income data are key to understanding inequality. Measuring labour's contribution to GDP provides an indication of whether higher national income will lead to increased material living standards for workers. While employment is the main source of income for many workers, income derived from capital disproportionately benefits the affluent. Therefore, a decline in the labour share of income from 2014 to 2019 ‐ from 54.1 per cent to 52.6 per cent ‐ represents upward pressure on inequality. This drop is consistent with other related evidence going back to the 1970s, suggesting that workers are losing relative earning power over the long term.
As a region, Europe and Northern America is driving the decline in the labour income share, given its weight in overall global income. Oceania (excluding Australia and New Zealand) and Central and Southern Asia have also experienced significant declines. On a more positive note, data from sub-Saharan Africa, Latin America and the Caribbean, and Eastern and South-Eastern Asia showed increases in the labour income share, though these increases are typically occurring from a lower starting point.
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