We're In This Together
Coronavirus is and will continue to be a consequential external driver in a global economic slowdown. Countries around the world are imposing government curfews, travel restrictions, and strict stay-at-home orders. This immediate response has brought the world economy to a near halt. The majority of us have never experienced a series of events like this and we must adapt rapidly to the ever-changing environment. So far, many of us have seen or experienced the current impact as we witness governments, communities, and corporations acclimate the current economic environment.
It is too early to tell the long-term economic impact from the COVID-19 pandemic, however, we can analyze the current impact. There has been a domino effect from an immediate economic slowdown across the globe. Large-scale demand shocks have rattled the world economy. Countless countries have closed their borders for 14-30 days and people are not traveling. Airlines have had to cancel numerous flights as its’ planes sit idle. Additionally, many factories sit unproductive impacting supply chains. Small and large businesses have been forced to lay off or furlough employees to prevent the business from going under. According to Bloomberg, more than 50 countries have cut borrowing interest rates with hope this would encourage economic investment. The world has never witnessed a rapid economic slowdown to this scale from an external cause and a lot of uncertainty remains as new data is released each day.
The United States’ government has passed the largest stimulus spending bill in hopes to curb the economic ramifications of government-imposed quarantines and a global economic slowdown. As a result of businesses unable to pay workers due to lack of business, over 3 million people filed for unemployment in a report published by the United States’ Labor Department in the 4th week of March. The stimulus sending checks worth $1,200 to individual Americans making $75,000 or less based on 2018 tax filings. The amount sent by the government will decrease in correlation with amounts earned above $75,000. Individuals will also earn an additional $500 for every child claimed as a dependent. Additionally, the spending bill will also be diversified amongst loan programs for small businesses, funding for cities and states, hospitals, and a substantial boost to unemployment insurance. The government hopes this will ignite the economy long enough to keep the momentum of a moving economy.
Corporations and businesses around the world are asking their employees to work remotely or forced to temporarily close businesses to adhere to social distancing recommendations. For large corporations, employees working remotely may not severely impact business or the income of the employees, however, for smaller businesses, that operate on slim margins and/or hourly employees, this could become a considerable issue. Luckily, the United States has seen a trend of large corporations helping its’ hourly employees and the communities in which they are based. According to a report from Axios, Microsoft, Twitter, Amazon, Google, and Facebook have committed to continue to pay its’ hourly employees regardless of their services being provided or not. In addition to this, Amazon will donate $5 million to help small businesses impacted by less business including a one-month rent subsidy to the business which operates within its’ office buildings. This leadership from large corporations reflects a positive image to its’ employees, consumers, and the communities in which they operate.
As we move forward through the unpredictable future, we should continue the support of our communities and local businesses. Economic recovery will be most successful when there is a trifecta of effort from individuals, corporations, and governments. The support of local businesses is crucial for local economies and the people they employ. We are in this together, and we must remain positive for our future and our community’s future.