Unlocking the “S” in capitalism Why inequality is a growing concern Defining inequality Addressing inequalities is at the heart of the focus on Covid hits schooling social issues – but what does inequality really mean? – Income and wealth inequality are one of the main The closing of classrooms during the pandemic areas that need attention, but we believe financial has pushed 101 million children globally below considerations are not the only way to measure inequality. the minimum reading proficiency threshold; seven million are in Western Europe and North Around the world there are also big disparities in access America.2 And according to the World Bank, to basic needs – the “life essentials” that include food, children affected by learning losses stand to water and clean air (see Exhibit 1). lose USD 10 trillion in future lifetime earnings – – People also lack “livelihood essentials” such as education equivalent to 8% of global GDP.3 and infrastructure. These are necessary for people to participate in economic, social and civic processes and lead productive and creative lives. In fact, UNESCO has found that “socially excluded” people who lack these into reverse. The rate of extreme poverty rose from 8.4% in livelihood essentials “find themselves confined to the 3 2019 to 9.5% in 2020 – the first global increase since 1998. 1 fringes of society”. These inequalities manifest themselves in various ways. In Covid-19: exposing inequalities a survey by our Grassroots Research® team, 27% of French The Covid-19 pandemic has accelerated the problems of educators cited major issues with online learning during exclusion and inequality, with implications beyond health the pandemic, especially for low-income students and and wellbeing. It’s more obvious than ever that many basic those in rural areas who do not have an adequate internet needs, such as food and healthcare, are not guaranteed for 4 connection or hardware. And since robust technology is many of our communities. Many people also lack access to increasingly critical to earning a living – particularly with the kind of education and financial services that would help the growth in home working – the “digital divide” between them build better lives. These shortcomings help explain those who have adequate digital infrastructure and those why during this crisis, progress in fighting poverty has gone who do not is a significant new driver of inequalities. Exhibit 1: life and livelihood essentials explained Food Health Water Life essentials Clean air (core to existence) Energy Safety Home Basic citizen services/information Education (basic and life-long learning) Decent work opportunities Livelihood essentials Wellbeing (core to human development Infrastructure (transportation and communication) in our modern world) Financial services Digital tools and technology 1. UN definition; Beyond Transition: Towards Inclusive Societies (unesco.org). 2. The Sustainable Development Goals (SDGs), 2021 | United Nations 3. WEF Briefing Paper: Shaping an Equitable, Inclusive and Sustainable Recovery 4. Source: UN The Sustainable Development Goals (SDGs), 2021 | United Nations – The extreme poverty rate is the share of world population that is living on less than $1.90 per day 5. Grassroots Research® Market Monitor, Issue 3, 2020 2