Disastrous impact of COVID-19 on earning capacity in emerging economies

What is it about?

The COVID-19 pandemic has impacted the economy of most countries. Bangladesh is among the hardest hit. The country’s economy suffered a great setback during this period due to a decline in ready-made garments, its leading export sector. The country saw a reduced GDP growth rate. There were layoffs in the banking sector. Some people were hit worse than others. They must be identified to help policymakers design better policies for economic recovery. This study explores the impact of the pandemic on earning capacity in Bangladesh based on data collected from a wide range of people.

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Photo by Alexander Aashiesh on Unsplash

Photo by Alexander Aashiesh on Unsplash

Why is it important?

Bangladesh has a high level of income inequality. The pandemic has pushed more people below the poverty line in the country. The poverty rate rose from 24.3% in 2016 to 35% in 2020. This study found that informal sector employees, who make up 90% of Bangladesh’s workforce, and daily labors suffered the most. They had no income during this period. Private sector employees also suffered some income loss. But the public sector employees had little or no income loss. The earning capacity of people with higher education or those living in the rural areas was less affected. Based on these findings, the author suggests short-term policies to overcome the current crisis caused by the pandemic and long-term policies to reduce income inequality. KEY TAKEAWAY: In Bangladesh, COVID-19 has had a disastrous impact on the earning capacity of people. It has further widened income inequalities. There is a need to give the necessary facilities to the poorest and the worst affected sections of the society. This can help reverse the economic effects of the pandemic and reduce income inequality. This research relates to the following Sustainable Development Goals: • SDG 1: No Poverty • SDG 8: Decent Work and Economic Growth • SDG 10: Reduced Inequality • SDG 3: Good Health and Well-being