Income inequality exacerbated by Covid-19: report

The shift to remote working in the face of the Covid-19 outbreak may exacerbate economic inequality, according to a new study from Statistics Canada.

The national statistical agency reported that, given disparities in the ability to work remotely, the burden of lockdowns due to the pandemic may fall disproportionately on families that are financially vulnerable.

“If so, these work interruptions will likely increase family earnings inequality, at least during the pandemic and economic recovery,” StatsCan said.

The study found that workers with lower earnings and lower levels of educational are least likely to be able to work from home.

StatsCan reported that approximately 40% of Canadian workers are in jobs that can be done from home, but the likelihood of being in a job that can be done remotely varies.

“For example, fewer workers in goods-producing sectors can work from home than those in service industries,” StatsCan said.

Additionally, StatsCan found that dual-income families with higher earnings “are more likely than lower-income families to hold jobs that can be done from home.”

Specifically, the agency found that more than half (54%) of dual-income families that are in the top 10% of earners can both work from home.

Conversely, just 8% of workers in dual-income families that are in the bottom 10% of earners are in jobs that can be done remotely.

The ability to work from home is also correlated with education levels.

StatsCan found that “primary earners with high levels of education are more likely to hold jobs that can be done from home.”

For example, about two-thirds of workers with at least a bachelor degree can do their jobs remotely, compared with less than 30% of those with high-school level education.

Given the differing effects of lockdowns on households, “the long-term impacts of the recent work interruptions on family earnings inequality will be worth monitoring after the pandemic subsides,” StatsCan said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.