The coronavirus pandemic is reversing gains that had been made in the global wealth gap, according to a report released Tuesday by the World Bank.
The World Bank found global income inequality has increased amid the pandemic, reversing some progress made over the past 20 years.
The report says the pandemic has increased extreme poverty rates and disproportionately affected lower-income populations.
The increase comes due to pandemic-driven job and income losses for low-skilled workers and low-income earners. Many jobs were lost due to government-mandated shutdowns that either forced small businesses to close their doors or shorten their hours.
Although the World Bank said the increase in inequality within countries was modest compared to other endemics seen over the past few decades, the effects of the inequality could potentially have a longer-term impact.
The disruption COVID-19 has caused on education as children have had to adjust to remote learning, especially in lower-income households, could set back multiple generations due to the links between income and education, according to the report.
Globally, the report found advanced economies will recover more quickly than developing economies.
“The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly harmful for developing countries,” said World Bank Group President David Malpass. “Putting more countries on a favorable growth path requires concerted international action and a comprehensive set of national policy responses.”