Post-COVID Economy

By Whitman ONeill | Sep 19, 2021

This past year, the world has endured the various tribulations caused by the Covid-19 global pandemic such as changes in the global and national economies. When discussing the success of an economy, unemployment rates and their impact on society are key indicating factors. This is because the availability of jobs highlights certain sectors within the economy that are suffering due to external or internal factors.

In this situation, the external factor that affected a large chunk of businesses around the world was the Covid-19 pandemic. An analysis of the overall global economy would be difficult to quantify because of the large amounts of information, so this article shall focus on the post-covid economy of the United States.

According to a report published by the Congressional Research Service on May 20 2021, it was shown that the unemployment rate reached 14.8% - the highest rate observed since data collection began in 1948. This influx in unemployment was a direct cause of the forced closure of various sectors due to fear of covid infection rates growing.

Following this fall in employment rates, the global economy lost more than 500bn dollars, as was reported by the Institute for Government in November 2020. Upon initial analysis, it is evident that business owners suffered financially; however, what is not as apparent is the internal effects that these loses had on the economy.

According to a source at T Rowe Price, an investment company based out of London, England, when Covid-19 caused the closure of large businesses it indirectly affected smaller businesses. For example, due to the digitalisation of businesses because of restrictions, the demand in sectors such as clothing retail, janitorial services, food service, public transportation and additional staff have been impacted. Thus, these smaller businesses with not as much cash flow were forced to shut down which only increased unemployment rates.

Looking forward, employment rates are expected to rise due to the easing of restrictions and various government support systems such as President Biden’s Covid Relief plan which committed more than 1.2 billion dollars to the economy. This major form of financial support will serve as a groundwork for the economy to rebound to its former strength.