How the rich can share the burden of lifting lockdown

As calls grow louder in certain sectors of society for the South African government to lift the nationwide lockdown, University of Cape Town (UCT) academic Athol Williams has proposed a way to do so that is in the interest of the poor.

Williams, a senior lecturer specialising in corporate responsibility and ethical leadership at UCT’s Graduate School of Business, is calling for employers to fund the healthcare of the poor who are most likely to contract infections. This funding would be in the form of a ‘special insurance’.

Williams explained that the most common reason used by those in favour of lifting the lockdown is that the poor suffer the most; lifting the lockdown would thus be pro-poor. However, he argued that these calls are not as altruistic as they seem.

“There is only upside for the rich to lift the lockdown while to the poor there is some upside in the form of income, but dire potential downsides in terms of potential death.”

The senior lecturer explained that if it is to be accepted that there is a rich–poor dichotomy in South Africa – an assumption implicit in the pro-poor calls – then it is instructive to observe how these two groups fare under lockdown compared to when lockdown is lifted.

“Under lockdown, the poor lose income which, as the newly enlightened pro-poor ‘activists’ point out, threaten the livelihoods of the poor,” said Williams.

By lifting the lockdown, they argue that the poor can earn an income again – however measly this might be – and thus restore their livelihoods.

“But lifting the lockdown will result in a surge of coronavirus infections and deaths, a burden that will be disproportionately borne by the poor. So, while the poor gain incomes from lifting the lockdown, they will risk their lives by returning to work,” he said.

Under lockdown, the rich lose wealth; their asset values decline, and they receive dampened incomes and bonuses. Lifting the lockdown relieves the rich of these burdens.

“So, what the rich gain from lifting the lockdown is wealth,” said Williams.

“What cost do they bear? Certainly not the cost of their lives as is the case with the poor.

“There is only upside for the rich to lift the lockdown while to the poor there is some upside in the form of income, but dire potential downsides in terms of potential death.”

Break the deadlock

For Williams, it is a skewed discussion: “For the rich, the discussion is about wealth whereas for the poor, the discussion is about whether they will live or die.”

On one side is the argument to retain the lockdown to save lives while on the other, the argument is that it should be lifted to save lives from poverty. Inevitably, there is a stalemate. But Williams suggests a way out.

“I believe we can break the deadlock if the rich were to share the downside burden that the poor would face if we lift the lockdown.”

He explained that the rich must fund the incremental healthcare costs of the poor who are most likely to contract infections. They would be able to do so with some of the economic gains they stand to acquire if the lockdown is lifted.

“This would be a powerful test of the sincerity of those calling for the lockdown to be lifted on the grounds that they are making the call in the interest of the poor.”

Williams proposed that this could be in the form of a ‘special insurance’. Employers would need to pledge that none of their employees will die of COVID-19 and put in place a programme that ensures their employees receive adequate treatment the moment they contract the virus. In the unfortunate event that an employee does succumb to the virus, the special insurance must make a payout to the family.

The principle of this proposal already exists: companies pay staff a premium in the form of hazard pay when they are asked to work in dangerous situations like violent zones or extreme weather. The South African government also already pays danger allowances to certain categories of employees, for example, nurses in psychiatric wards. According to Williams, the same principle applies here.

“Sharing the benefit and the burden of opening the economy breaks the stalemate and enables us to move forward in a morally fair way,” he said.

“This would be a powerful test of the sincerity of those calling for the lockdown to be lifted on the grounds that they are making the call in the interest of the poor.”