Coronavirus Recession Looms

With this pandemic in full speed, many people are concerned about a recession. Economists say a recession is inevitable due to everything that has happened and continues to happen. The biggest worry is the unemployment rate that is expected to spike to a possible 20% in the future with more and more people continuing to be laid off. The economy is expected to be down by 24% this year, and it is difficult to tell how long it will take to recover. The biggest concern appears to be in the small businesses that do not have enough cash nor credit in order to survive past this pandemic and will most likely suffer the most. It seemed like manufacturers were shielded from the blow but now even manufacturers are being asked to halt production. It is also predicted that the GDP in 2020 will be reduced by 8.4% ($1.8 trillion). The overall takeaway is that the severity of economic slow down depends on the seriousness and the length of the pandemic.

How long do you think this may last? Do you think the calculations are accurate or will they, in reality, be less or more?

https://www.nytimes.com/2020/03/21/business/economy/coronavirus-recession.html?auth=login-google

Shutdown Spotlights Economic Cost of Saving Lives

Is the tremendous economic cost worth saving a life? This is not the first time this question has been asked. The coronavirus has surfaced this moral question as the efforts to slow down the virus have essentially halted economic activity. Can you put a number amount next to the life of someone? Economists have long struggled with the trade-off between economic well-being and the health of a society. Few economists are willing to step forward and answer this controversial question. The priority of the Trump administration during the coronavirus crisis has been to keep Americans safe and healthy. However, there is a point where shutting down the economy is more damaging to Americans in the long run than trying to stop the spread of this disease. Millions of people are out of work and do not have the funds to survive off of. Economist from Vanderbilt University Kip Viscusi stated, "making people poorer has health consequences too." Do you believe there is a point where efforts to stop the coronavirus by an economic shutdown are more harmful than helpful? 

https://www.nytimes.com/2020/03/24/business/economy/coronavirus-economy.html?searchResultPosition=2

‘Our Situation is Apocalyptic’: Bangladesh Garment Workers Face Ruin

https://www.nytimes.com/2020/03/31/fashion/coronavirus-bangladesh.html?action=click&module=RelatedLinks&pgtype=Article

Bangladesh is the second largest exporter of garments to most of the clothing and retail industries in the West. With the onset of lockdown of non essential businesses, most of the retail businesses including Primark, H&M, ZARA, and so on halted the orders, earlier placed by them. This impacts greatly to Bangladesh's economy, as it earns around $40.5 billion from garments exports. Most of the factory owners are facing financial losses, and are in no position to pay salaries to their workers. In addition, with the nationwide lockdown in Bangladesh, most workers are sent home, with little hope of receiving any wages. 

The latest sign the economic downturn is intensifying: White-collar workers are being laid off now

During the last economic crisis similar to the one we are currently facing, the recession of 2008-9, we saw many companies that hire largely blue collar workers file for bankruptcy and close their doors. As the means of production have began to change and become more advanced over the years, with much less of a need for actual physical human labor, blue collar factory jobs have been seen as an occupation with little job security anyway, at least compared to the more sough-after white collar jobs. Now, with white collar workers making up a larger portion of the workforce than ever before, the economic downturn brought about by the coronavirus outbreak has led to many white collar companies laying off employees at a rate that is minimal now, but will surely increase over the next month or 2.

This will affect us (college students approaching graduation) a lot more than we think. The graduating class of 2020 was supposed to be entering one of the hottest job markets we have had in this country for years. Now because of the recent economic downturn that does not look to be slowing down, that changes for a lot of us.

https://www.washingtonpost.com/business/2020/03/28/white-collar-coronavirus-recession/

Ignore the bankers – the Trump economy is not worth more coronavirus deaths

CEOs of notable companies like Goldman Sachs and Wells Fargo recommend that those who are at "lower risk" should gradually be making their way back to work as April approaches. They believe that the damage of closing of the economy is worse than losing more lives, and U.S president Donald Trump agrees. However, medical officials like Dr. Anthony Fauci state that the economy needs to shut down further, creating more room for social distancing. At present, the United States is leading in the number of cases of Covid-19 patients, and Dr Fauci believes that the peak of the virus in the country has not yet been reached.

The White House advisors fail to understand that the economy is made up of human lives, and losing those will inevitably result in further economic downturn. Hence, opening up the economy now would not be viable by any means. Many justify this based on the coronavirus bill passed for $2.2 trillion, however it is no justification to re-open the economy and risk more lives. 

https://www.theguardian.com/commentisfree/2020/mar/29/bankers-trump-economy-coronavirus-deaths

Trump Signs $2 Trillion Bill as U.S. Virus Cases Pass 100,000

https://www.nytimes.com/2020/03/27/world/coronavirus-live-news-updates.html


On Friday, President Trump signed a $2 trillion bill. The bill will provide a $1,200 check to millions of Americans. The stimulus check is meant to give Americans some spending money, so when retail and restaurants open back up, people have ab incentive to go spend money and stimulate the market. I think this boost will play a vital role in America's recovery from the corona virus.

Companies benefiting from COVID-19 Outbreak

Millions are out of work and applying for unemployment while many companies are earning larger revenue. Restaurants and bars are losing the worst, while medical companies and online technologies continue to grow. Airlines have not experienced the worst of what is to come, but are expecting incredibly large losses 3M and other medical technology developers continue making these masks which are supposed to protect against COVID-19, but has been criticized as ruled ineffective. The disease is air born, meaning it can touch any surface and as soon as that it touched by any part of the body, it can be spread through mouth, nose and eyes. It is recommended that if contaminated it is safer to use a mask in case of exposure to healthy patients. 3M and others will need to find other business strategies to boost sales for the next quarter, if conditions change. The disease is air born, meaning it can touch any surface and as soon as that it touched by any part of the body, it can be spread through mouth, nose and eyes. In fact the masks have small enough holes where small enough particles can slip through. These companies have been profiting so much in fact that there is a shortage. 500,000 masks have already been sold and used in the United States alone. In fact, only one customer is allowed to purchase one mask due to high demand. 500,000 more masks are on the way, and people will continue to purchase until Corona-virus is gone.


Posted by Ryan Lesmez
https://www.bloomberg.com/opinion/articles/2020-01-28/3m-face-masks-are-rare-bright-spot-as-coronavirus-fears-grow

IMF head says global economy now in recession

The head of the International Monetary Fund, IMF Managing Director Kristalina Georgia said Friday it is clear that the global economy has now entered a recession that could be as bad or worse than the 2009 downturn. Although she indicated 189-nation leading agency was forecasting a recovery in 2021, potentially leading to a “sizable rebound”, she said this would only occur if nations succeed in containing the coronavirus and limiting the economic damage.

At the news conference following a telephone conference with finance with finance officials from the 24 nations that makes up the IMF’s policy-setting panel, she said: “A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but erode the fabric of our societies.” She inserts that the IMF was updating its economic outlook now and it would be released in a few weeks, allowing the agency more time to assess the economic impacts of the virus.

Asked if the United States was now in recession, she noted that Federal Reserve Chairman Jerome Powell had said Thursday that America “may well be in a recession.” She said she believed not only the U.S. but many other advanced economies and a number of developing countries had already entered downturns.

Georgieva suggests that lower income countries were being hit hard by the spreading coronavirus, with 81 nations now seeking support from an IMF emergency financing program being used to provide aid. She repeated a pledge that the IMF stood ready to make all $1 trillion of its lending resources available to countries being hit by the virus.

“We have seen an extraordinary spike in requests for IMF emergency financing,” Georgieva said. “We are being asked by our members to do more, do it better and do it faster than ever before.”

https://apnews.com/3bb2d6810c2f141a0bdecd3e4b49b215

The Nordic Way to Economic Rescue

https://www.nytimes.com/2020/03/28/business/nordic-way-economic-rescue-virus.html

As the COVID-19 pandemic continues to put pressure on all parts of life, for nearly everyone on the planet, one of the most immediate concerns is the economy. More and more countries are placing restrictions on movement, business, and gatherings. While of all this is completely necessary to slow the spread of SARS-CoV-2, it has large-scale consequences. Many people, especially those working in non-essential retail positions or as servers, have been laid off from their jobs, leaving them little to no income to pay rent, mortgages, bills, or for living expenses like food. Countries are dealing with this in a variety of ways. Canada is sending $2,000 a month to citizens who have lost income due to the pandemic. The United States has passed a 2 trillion dollar stimulus package that includes one-time payments of $1,200 to adults under a certain income level, including $2,400 for couples, and an additional $500 for dependents under the age of 16. This article from the New York Times focuses on the responses of the Nordic countries, which are known for having much stronger social safety net programs than other countries. Denmark is covering 75 to 90% of all worker salaries over the next three months at least, and covering costs like rent for companies whose revenues fall. Other Northern European countries like the Netherlands are taking similar measures. This article makes the argument that the US should be doing something more like those countries, as a typical stimulus package will likely be ineffective given that the government is forced to suppress business to quell the spread of the virus.

IMF chief Georgieva says the world is in a recession, containment will dictate strength of recovery

Recently, the head of the International Monetary Fund, Kristalina Georgieva, stated that the global economy is in an economic recession due to Covid-19. Within this statement, she notes that  “containing the virus and having an effective, coordinated response to the crisis” will positively impact the depth and the duration of this recession. Without these measures, the article notes that it will be difficult for the economy to recover in a short period of time. The article also notes that the IMF and Georgieva have pursued extraordinary measures to help combat the current economic decline and stagnation. Specifically, the IMF has stated that it is willing to use its $1 trillion dollar lending capacity to help states that are having difficulties combating the virus and the economic recession.

https://www.cnbc.com/2020/03/27/imf-chief-georgieva-says-the-world-is-in-a-recession-containment-will-dictate-strength-of-recovery.html 

Searching for the Economic Silver Lining

    If we can all think back two months to January, the US economy was strong and gearing up for a great 2020, it would be hard to fathom what would come in just a matter of weeks. Now just two short months later, the economy has flipped upside down at the hands of the coronavirus. With a lot of sad news out there right now, I'd like to look at a positive side of things, and perhaps find the economic silver lining of this novel coronavirus pandemic.
   One positive thing coming out of this is that it has forced us to create more flexible work environments. Remote working, part time work and working during non peak hours that provide flexibility that can allow for parents to spend more time with their children, reduce transportation costs, and help the environment. Flexible work arrangements can provide more equity in the workplace through these ideas. Another thing is that we tend to feel more together when we share experiences with one another. With the global spread of this virus, we have shared a life changing experience with hundreds of millions of others domestically and globally, and perhaps that will lessen the divide in the country and the world. Perhaps this common enemy will create some sort of connection that will increase our sense of unity.
     There is no doubt that the Covid-19 outbreak will be a life-changing, devastating experience for us all, and everything going on right now appears to have severely negative connotations, but perhaps in the aftermath of this all we will emerge with some net positives for more equity in the workplace as well as a more united nation from this awful shared experience.

https://www.forbes.com/sites/rebekahbastian/2020/03/25/could-coronavirus-have-a-silver-lining-for-equity-and-belonging-in-the-workplace/#2a80b68e2b93