By: Alice Dai
While being stuck at home in self-quarantine in the midst of this pandemic, many of us are taking advantage of this opportunity to do things we enjoy, whether that is acquiring a new skill, practising beloved hobbies, or getting in touch with friends (hopefully not literally in touch). Though there isn't much we can do as students other than maintaining social distancing protocols, it is still crucial to stay informed in regard to the different aspects of this pandemic, whether societal, political or economical.
Unsurprisingly, the global economy took a hit when the virus swept through the globe, but to what extent, precisely? Take a second to imagine how much your spending has decreased because of the pandemic. Perhaps you were planning to go to the movies with your friends, eat out at a fancy restaurant, or go bowling, but now, all of the money that would have been spent remains in your bank account. That same money goes towards employing people, who in turn, utilize their earnings to support their family. In multiplying the amount of money left unused due to the pandemic by the population of your city, you would obtain a rough approximation of the loss of your local businesses.
The decrease in consumer confidence and our propensity to purchase goods? it has caused a ripple effect creating more major economic crashes we are witnessing during this disaster. Workers are being laid off at astronomical rates as businesses can no longer afford to pay workers. Unable to work, more and more people are applying for government welfare programs. The lack of consumer confidence caused a lot of stock prices to plummet, resulting in companies running into deficits and people losing their savings.
In order to support workers and families that struggle financially during the pandemic, the solution that governments provide is the implementation of different welfare programs. Though it seems like this can in some way help the economy as people are receiving money on a monthly basis, it’s only available to individuals who have lost their jobs. Many contract workers, part-time workers and seniors did not qualify for the program, putting them at financial risks. At the end of the day, the welfare system isn’t solving the root of the problem, being the lack of consumer confidence, instead the money given only enough for an unemployed worker to support for themselves, not to mention that many other groups of people that are struggling to provide for themselves because of the pandemic are being neglected.
At the end of the day, although there are many flaws to the welfare programs that the governments are establishing, there are no good way to fix the current economic crisis unless people are asked to go back to work to enhance production, which is what most governments are considering to do if the curve starts to flatten more.
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