The Economic Effect of the Pandemic

by The Cowl Editor on October 24, 2021


The Economic Effect of the Pandemic

COVID-19 Continues to Cause Economic Problems

by Christina Charie ’25

Eighty cargo ships sitting idle in the Pacific Ocean. An incessant line of “Now Hiring” signs displayed in the grocery store. With a vaccine, diminishing unemployment benefits, and in-person school restarting, the excuses for economic disruption seem irrelevant. However, while the COVID-19 vaccine is commonly distributed in the United States, certain countries that are hubs of manufacturing, such as India and China, continue to experience outbreaks of COVID-19. For instance, Vietnamese textile factories have recently shut down due to outbreaks. 

Due to continuing COVID-19 concerns, factories still do not operate at full capacity. Even when all the workers themselves remain healthy, quarantine is still a possibility for workers whose families or friends may fall ill. 

With factories still limiting operations, the number of workers involved in good transportation is decreasing. Crewmembers trapped on a cargo ship for months may decide to utilize their time in a more fulfilling manner when the ship must wait until an understaffed port can unload cargo. As a result, goods may have no way of getting to consumers. When truck drivers were laid off after stores closed their doors for months, many found new positions of employment. As a result, fewer people are working to move goods from ports to various locations across the country. 

The pandemic may have also caused individuals to realize the value of their time. Minimum wage might not provide sufficient income for a family if childcare costs must also be accounted for. For many families, staying home with children is more cost-effective than working and paying for childcare. Companies, in response, may offer higher wages to compensate. The increased cost of labor will fall upon the consumer in the form of higher prices. 

While additional unemployment benefits may have reduced the number of individuals in the labor force, if no substantial change in unemployment rates is observed within the coming months, one must consider other causes.

 Additionally, many average workers may not want to increase their exposure or put vulnerable families at risk. This fear will remain in the minds of workforce members until COVID-19 is eradicated. 

The connective nature of the economy results in several issues at once, especially after major disruptions such as the novel coronavirus.  

These factors have contributed to the strain on the consumer in recent months. An example of this consumer strain can be found in the Southwest Airlines flight cancellations over Indigenous People’s Day weekend. If air travel is at normal demand levels, Southwest does not have the workers it originally laid off because many had to find new jobs for survival. 

A vaccine mandate still might not be the root factor contributing to the employment shortage. Making the assertion that working to end the pandemic undermines the economy is not completely true in all cases. If people are afraid to physically go to work, shop, or travel, the economy will suffer.  

The economy is in a transition as the world frees itself from the clutches of COVID-19. Companies need time to react and manage the new levels of demand for products and services. Demand has risen quickly to elevated levels after much of the pandemic. This outcome is unexpected, which  has caused manufacturers to halt expansion under the assumption of a long road to economic recovery. 

The modern economy is more fragile than many will admit. Once the market balances and finds a new equilibrium, inflation will fall. 

Economic recovery is within reach; however, consumers should expect to experience difficulties until the economy is able to stabilize itself.