How Covid-19 Effected the Economy: Unprecedented Impact on Jobs

School: Baltimore City Community College - Course: ACCT 221 - Subject: Accounting

How Covid-19 Effected the Economy At the beginning of 2020, Covid took the world by storm. It came without warning and without a date of demise. The outbreak resulted in over 6 million deaths globally, according to Hannah Ritchie, Edouard Mathieu, Lucas Rodes, Cameron Appel, Charlies Giattino, Esteban Ortiz-Ospina, Joe Hasell, Bobbie Macdonald, Saloni Dattani and Max Roser, researchers from Our World in Data; and to stop the continuance of this rapid flowing outbreak, countries around the world mandated shutdowns. This marked the beginning of an unprecedented line of events which included unemployment skyrocketing, with the erasing "the equivalent of 255 million jobs in 2020 and consumer purchasing plummeting (UNCTAD)." The world witnessed and experienced a dramatic change in lifestyle. It started out with temporary shutdowns which left millions of people out of work, which lead employers to respond by making work accessible from home, and the government responded by aided those who lost their job due to temporary shutdowns with funding to cover hardships such as rent, food, gas, lights, medical expenses, etc. The global shut down also meant less consumer purchasing. With less consumption, industrial production and trade declined drastically. With a two-year fight to gain control over the pandemic, the GDP fell to 3.3 percent in 2020. Today, society is slowly becoming "normal" again after two years uncertainty; however, the business sector and the financial state of the world will be adjusting to the impact of covid for years to come. Before the pandemic, global trade and industrial production were increases at a relatively equal speed; however, due to reducing economic growth and trade tensions at the end of 2019, Figure 1 Volume of World Trade and 2 trade was already moving slowly. Add the weight of the pandemic, there was a drastic dip in both sectors. Trade restrictions and fiscal lockdowns negatively increased the drop in goods, but economic policies that were passed to help personal earnings in advanced countries help combat the drop. For example, trade bans on medical resources such as medicine, gloves, and surgical masks were by different countries contributed to 90 percent of trade limitations (Congressional Research Service). The V shapes in the CPB graph indicates the severe decline in 2020 and the recovery in 2021. Research from the OECD (Organization for Economic Co-operation and Development) shows pre-pandemic volume of industrial production and world trade from 2010 to present using the CPB World Trade Monitor. Fortunately, the bans have decreased, and travel is increasing. Trade is now "15 percent higher than before the Covid-19 pandemic hit. (UNCTAD)," but it trades services did not have the same recovery.