As the world counts Covid-19 casualties and new cases of people infected, it is becoming evident that the worst is actually ahead of us. The inevitable global recession is going to alter our daily lives and it is going to be unlike anything we have seen before.
Economists expected that something like this would happen as soon as it became clear that the virus won’t be confined to Wuhan and China. However, no one could have predicted that the global pandemic would be as devastating to the economy as this infographic now clearly demonstrates.
Unfortunately, all the numbers show that this will likely stay with us for a while, wreaking havoc on the economy in the process. To expect that our way of life will be spared would be foolish to say the least.
Unemployment Rates Will Skyrocket
One of the very first things to have happened in every global recession thus far is people losing their jobs. This is going to be especially true for the services sector as it has been hit the worst by the pandemic.
Restaurant owners, hotel managers, reception clerks and bartenders have all felt an immediate impact on their livelihoods as soon as people started staying at home. If that wasn’t enough, most governments ordered restaurants, hotels and resorts to shut down shop. As a result, they were forced to endure the storm whichever way they knew and could.
Fortunately, the reductions of restrictions which happened recently yielded some positive results. This prompted business owners to believe that there might be some light at the end of the tunnel. At times like these, any little ray of hope is welcome.
Tourism Will Suffer like Never Before
Staying away from other people never goes hand-in-hand with crowded beaches. This means that 2020 is already as good as lost to tourist agencies, hotels, resorts, restaurateurs and private landlords.
Whatever windfall these companies and people might get will be from domestic tourists only. What’s more, it may be considered as socially irresponsible if someone tried to resume work as a tour guide for example.
Restarting this line of business would mean large groups of people staying close to each other for a very long time. And this would happen in the peak of a pandemic. What could possibly go wrong, right?
Food Shortages May Become Common
People have been spoiled with how readily available food is these days. However, this could all change if the food supply chain really starts to break down. Economists have long argued that the food production and delivery systems people have put in place are far from perfect.
For example, it is estimated that most of the US gets its meat from three or four large meat processing corporations. Should the supply or production chain in one of these companies break down, a large percentage of meat-loving Americans will have to start looking at alternatives.
The big problem here though, is that they are not likely to find them. This is because the solution is to produce locally grown and distributed food. However, it’s probably 50 years or more since growing food locally was something that people did.
If this pandemic happened back then, it can be argued that people would have weathered it better. These days however, it is very likely that most countries will have to work around the food shortages they face sooner or later.
People Will Have to Retire at a Later Age
When the economy came to a complete stop, most third-world and developing countries were forced to get further indebted. This was done so that they could fund public officials’ salaries and replenish dwindling pension funds.
However, getting further in debt was the last thing these countries needed. Even before this pandemic stroke most of them were finding it hard to make ends meet. After the pandemic paralyzed these weak economies, it was evident that the only way out was yet another international loan.
This is likely to result in countries finding it harder than ever to repay credit installments, interest rates, as well as to pay administrative salaries and retirement money. The only way out of this scenario has usually been to extend active employment for several more years. Unfortunately, the current situation seems headed for that direction.