Before the coronavirus shutdown, the country’s income inequality was 0.48 percent. It went up to 0.635 percent towards the end of May, according to the Bangladesh Economic Association (BEA)
When income inequity – measured by the Gini coefficient – rises to above 0.5 percent, it means there is a severe income gap.
Before the coronavirus shutdown, the country's income inequality was 0.48 percent. It went up to 0.635 percent towards the end of May, according to the Bangladesh Economic Association (BEA).
In a virtual briefing on Monday, Professor Abul Barkat, president of the BEA, said the Palma ratio is another way to measure income inequality. The ratio is determined with the richest 10 percent population's share of the gross national income divided by the poorest 40 percent's share. If the difference between the two classes is 3 times, it is dangerous.
Based on the Palma ratio, income inequality has now risen to 7.53 percent from 2.92 percent in February.
So, Bangladesh is now a country with high income inequality.
Abul Barkat thinks the government should do whatever it can in the next budget to eliminate income and wealth inequalities.
"Not in the next budget only, but in the next five-year budget, we need to take all kinds of necessary measures to prevent inequalities in income, wealth, health and education. No taxes can be imposed on the poor, lower and middle-class people," he said.
In 66 days of the shutdown till May 31, the poverty rate rose to 40 percent (6.80 crore) from 20 percent (3.40 crore) in February. The number of rich people remains the same – 10 percent. In February, 70 percent of the people were in the middle class. Now the number has come down to 57 percent, he added.
3.60 crore job losses in 66 days of shutdown
Around 3.6o crore people have lost their jobs in the 66 days. The highest job losses were found in service, agriculture and industry sectors.
Because of the shutdown, 63 percent of jobs in the service sector were lost, and the industrial sector saw 76 percent job cuts.
After the shutdown, it is feared that the layoffs will increase and wages will also decrease. The organisations that will take advantage of government-announced incentive packages should be forced to ensure employment, Professor Abul Barkat said.