(Newswire.net — November 2, 2020) — The impact and effects of the pandemic that we find ourselves in midst of are being felt right across the world. From world governments down, including economies, businesses, and individuals. Millions of people are feeling the financial pressure through either loss of livelihood, the threat of lost livelihood or reduced income.
COVID-19 is not only a global pandemic and public health crisis, of course. It has also severely affected the global economy and financial markets and the damage in economic terms is already there for everyone to see. Even after we come through the other side of this whole affair, the effects on jobs and finances are still going to be felt for some time.
In countries around the world, a sharp rise in job losses and disruptions such as those in manufacturing, transport are just a few of the results of the measures being taken in an attempt to mitigate the virus. It has become abundantly clear that the majority of governments have greatly underestimated the speed at which the virus could spread. Because of this, steps that were taken were reactive rather than proactive.
Wherever the blame is placed, there is no disguising the fact that Covid-19 has wreaked havoc on the world economy.
Moving jobs away from the office and to the home
There has been a steady shift in the number of people working from home, as opposed to heading into the office, in recent years. A crisis such as the one we find ourselves in has only accelerated that movement of personnel. As a way to slow the spread of a virus, any virus, while also helping an economy to limp along and possibly even grow, then home working is a solid solution.
Of course, there are some sectors that this cannot work in – you cannot outsource nursing or manufacturing, for example. That being said, moves like this keep people employed even as more people look for short-term loans to help with day to day expenses.
Being able to work from home and, crucially, keep earning helps the individual and the overall well-being of that household, and the organisation they work for, but it also benefits the local and wider economy. For those reasons, it is in the best interests of all involved (local and national government, employers, trade unions etc.) to do everything that they can to make homeworking a viable option.
Can fiscal policy offset the downturn?
Normally is there is a decline in the demand side of the ‘supply and demand’ equation, the authorities can cut interest rates to help boost demand. This works, where financing options are concerned, because the final price is very often lower thus helping a consumer decide that maybe that high ticket item is now affordable.
That’s a basic example, but it essentially how it works. Additionally, a consumer may be more tempted to invest in physical products when they see they are not gaining as much interest on their savings.
The problem is that, within a pandemic, both sides of the equation are impacted. If staff cannot get into work because they have fallen sick, or they are worried about getting sick if they go to work, then a demand-side financial policy is not going to work.
Sadly, there is no quick fix to any of this. This situation requires collective, international action. This virus is not going anywhere, not any time soon, and so the sooner a vaccine is developed and distributed the better. Collaborating in this way will save lives and collective economies in the future.