The Economic Impacts of Covid-19: A Global Perspective

On Lives and Livelihoods

By April of 2020, unemployment fell by over 20.5 million jobs. Over 7 million people died,  and the average life expectancy decreased by 1.6 years. The United States lost over 16 trillion dollars, 90% of their GDP. Panic spread throughout the world when they heard about an expensive new disease: Covid-19.

Origins and Early Spread

Covid-19, a disease caused by the virus SARS-CoV-2, was first seen in a large cluster in Wuhan, China, in December of 2019. It spread throughout the world and was officially declared a pandemic on March 11, 2020, by the World Health Organization. There are 7 coronaviruses, the first one being found in 1965, that can affect humans; Covid-19 being one of them. While the origin we do not know, we do know how dangerous this disease is.

Ripple Effect on Jobs

Many workers couldn’t go to their jobs anymore because of safety reasons. Covid also impacted people from looking for new jobs, and some didn’t have the opportunity to be able to work from home, so unemployment rates increased and nearly tripled. Unemployment is bad for an economy in general because it decreases consumer spending and can slow down economic growth.

Supply Chain Chaos

Furthermore, after the pandemic began, manufacturing fell at a 43% annual rate, and hours worked fell at a 38% rate. These were the largest declines in manufacturing since World War II. Early in the pandemic, there was a shortage of many goods, ranging from surgical masks and canned goods to toilet paper. Because suppliers couldn’t meet the demand of some items, prices were drastically raised.

Government Spending

Finally, the spread of Covid-19 caused the national debt in many countries to increase. The United State’s federal government spent over 5 trillion dollars in pandemic response spending. China’s national debt has also been increasing steadily since 2020. Currently, The United States of America’s national debt is expected to increase to 121% of GDP, while China’s is only 90.1%.

The Path Forward

Currently, the Global Economy is recovering, but many countries are still facing challenges caused by Covid. The U.S. economy has shown steady growth since 2021, and groups that had experienced the largest losses are beginning to gain a share of those back. Although the economy isn’t the same as it was before Covid, it is steadily recovering and not anything to worry about too much.