Written by: Sakura Koner
Edited by: Susie Rooney
It was easy to neglect, almost disregard, the outset of the COVID pandemic. It was easy to claim, “that will never reach us”. But it did, it reached everyone, everywhere. Plunged into the COVID pandemic, humanity did not know what to do, how to tackle it, and how to respond to it. We had never seen anything so tiny but mighty bring us to the brink of certain destruction! However, in March 2020, we were living through something completely foreign to us and diseases have a way of showing us how alarmingly vulnerable we are. For centuries, disease and pandemics have both shattered and strengthened economies, compelling societies to transform and adapt in order to survive future crises and propel the evolution of our economic systems.
The global COVID-19 pandemic had severe negative impacts on the global economy. During 2020, the world’s collective gross domestic product (GDP) fell by 3.4 percent. To put this number in perspective, global GDP reached 84.9 trillion U.S. dollars in 2020 – meaning that a 3.4 percent drop in economic growth results in over two trillion U.S. dollars of lost economic output. Global stock markets also suffered dramatic falls after the coronavirus outbreak, although they were able to recover from the losses quite quickly. The Dow Jones reported its largest-ever single-day loss of almost 3,000 points on March 16, 2020 – beating its previous record of 2,300 points that was set only four days earlier.
However, the effects are not confined to the short term; they often extend far into the future, impacting people and the economy in the long run. In the United States, the proportion of people out of work hit a yearly total of 8.9%, according to the International Monetary Fund (IMF), signalling an end to a decade of job expansion. Further, millions of workers in areas of the economy that have been particularly affected by the pandemic, such as hospitality and tourism, have been placed on government-supported job retention schemes due to their industries nearing a standstill. New job opportunities remain scarce in many countries. While Australia’s job vacancies have rebounded to their 2019 levels, France, Spain, the UK, and several other nations continue to lag behind.
Interestingly, societies tend to face pandemics in a similar manner. Over the centuries, people have not really changed, neither have the priorities that humans hold dear. At the heart of the economic decline is the loss of a workforce. With people being ill and suffering, the sudden and huge loss of employees results in losses suffered by companies and employers, eventually filtering into large-scale monetary losses.
The Black Plague, for example, had large-scale social and economic effects. The economy underwent abrupt and extreme inflation. Since it was so difficult (and dangerous) to procure goods through trade and to produce them, the prices of both goods produced locally and those imported from afar skyrocketed. Because of illness and death, workers became exceedingly scarce, so even peasants felt the effects of the new rise in wages. The demand for people to work the land was so high that it threatened the manorial holdings. Serfs were no longer tied to one master; if one left the land, another lord would employ them immediately. To retain their workforce, lords were forced to adopt reforms that benefited the peasants. As a result, wages outpaced prices and the overall standard of living improved.
Similar effects were experienced, although on a more local scale, during the cholera epidemic of 1832 in New York City. Already a city of great commerce and business, cholera brought New York to its knees. Commercial trade was abandoned and many were forced to flee, leaving their businesses behind. On the flip side, thirty miles outside New York City, country hotels and boarding houses filled to capacity. In the city, doctors increased their fees while pedlars made profits by selling dubious cures.
The one positive effect of repeating histories is that we learn from previous incidents. When the COVID-19 pandemic began to take hold in the U.S., it sent the economy into a downward spiral. The economy quickly shed more than 20 million jobs. Amid intense fear and hardship, federal policymakers responded, enacting five relief bills in 2020 that provided an estimated $3.3 trillion of relief and the American Rescue Plan in 2021, which added another $1.8 trillion. This robust policy response helped make the COVID recession the shortest on record and helped fuel an economic recovery that has brought the unemployment rate, which peaked at 14.8 percent in April 2020, down to below 4 percent since January 2022 and to a low of 3.4 percent in January 2023. Rather than rising as typically happens during recessions, one measure of annual poverty fell by 10 million people in 2020 — the largest amount on record in data back to 1967 — and fell again in 2021.
Many say history repeats itself, but I disagree—people repeat themselves. Ironically, despite ongoing advancement in medical research, we continue to demonstrate widespread neglect towards the microbes of the world. Maybe history would not repeat itself if we are able to change certain annals of humanity. Too many deaths, diseases and destruction have been ignored. Let’s hope COVID-19 can be a wake-up call for all. History repeats itself—maybe we should not accept it as our immutable destiny.
References:
Image Source: Tech. Sgt. Kasey Phipps, https://ok.ng.mil/News/Article/2326925/responding-to-covid-19-the-past-present-and-future-of-oklahoma-national-guard-o/
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