We are sure by now you have heard in some shape or form that COVID-19 is having a huge impact on the United States economy. Whether it be from political pundits, or family members, the information is out there, but it can be difficult to understand exactly what the impact is. We want to break it down for your understanding.
The easiest way to see the impact COVID-19 is having on our economy is through the closure and reduced hours of businesses nationwide. You have probably seen a few businesses boarding up for good, a result of being unable to conduct business for months on end. This means hundreds, if not thousands, of people losing their jobs.
Furthermore, even if businesses are open they are still being substantially impacted. There is a lingering fear among the populace about the possibility of contracting the virus. As a result, there are many employees choosing to remain unemployed, leaving businesses scrambling to find replacements. On top of that, the amount of footfall has taken a nosedive; less people shopping means less money pouring into the business to keep it afloat.
According to a BBC news article by Lora Jones, the unemployment rate in the USA has jumped from 3.7% in 2019 to 10.4%. By the end of March, “a record 3.8 million Americans applied for unemployment benefits” according to the Foreign Policy Research Institute. The people losing their jobs are also losing the ability to positively impact the economy by putting money into the businesses around them with unemployment paying out less than half of what people usually make. With less money bolstering the economy and a reduction in job creation, it is projected that “the global economy will shrink by 3% this year…the worst [decline] since the Great Depression” according to the same BBC article.
While the economy is expected to make a recovery, it is hotly debated how quickly that will occur. For the time being, it seems that the economy will continue to decline as the USA struggles to combat this unprecedented pandemic. This is sure to shape our nation as the Great Depression did in the 1930s. It will be important to continue to stay abreast of the ever changing economic tide.