Economists believe that the Covid-19 pandemic has disproportionately impacted poor households and families in the US, with continued disruptions being experienced across small businesses, housing, and even childcare services.
William Rogers, professor and chief economist at the Heldrich Centre, Bloustein School of Planning and Public Policy, Rutgers University, and a senior research affiliate of the National Poverty Centre at the University of Michigan, shared an article on how the Covid-19 pandemic continues to affect low-to-moderate-income (LMI) individuals and communities in 2022 and beyond.
An Institute for Economic Equity analysis looking at the US Fed’s latest Community Impact Survey conducted in August 2021 highlights that a higher concentration of employment in pandemic-disrupted service industries, such as leisure and hospitality and a lack of savings among workers and families have resulted in more acute suffering and slower recovery.
Additionally, American Indian or Alaska Natives, Hispanic or Latino and Black people have been disproportionately impacted by the Covid-19 pandemic and its economic and health effects. For instance, the pandemic has unfavourably impacted their financial security to housing stability, with organisations having to face ongoing challenges related to high demand and maintaining staffing levels. In addition, these challenges exacerbated with the emergence of the Delta and Omicron variant beyond the surveyed period.
About 78% of respondents stated that conditions related to income loss and stability were still worse than they were before the pandemic. Similarly, about 81% noted that the disruptions to small businesses, including closures, reduced demand, and supply chain blockages were worse than before the pandemic.
Bernard Yaros, an economist at Moody Analytics, retweeted an article shared by Sharon Parrott, president of the Centre on Budget and Policy Priorities, on what could have happened to the US economy, workers, and families without robust Covid-19 relief measures. Economists state that there would have been slower economic growth, and sustained high unemployment especially for low-paid workers.
The US and other economies have surprisingly recovered quite quickly from the Covid-19 pandemic, say experts. The strong performance and recovery have been attributed to the robust vaccination programmes in large part across countries, accompanied with efforts to fight the virus, but also the quick and massive global monetary and fiscal response.
Economists state that the macroeconomic costs of governments failing to help their economies during the pandemic would have been upsetting. The global real GDP would have fallen twice as much in 2020, and growth would have been half of what it actually was even while the world economy would have started to recover in 2021.
In addition, no fiscal or monetary support would have led to massive unemployment levels, with 40 million additional unemployed workers in 2021 and persistently high joblessness thereafter. As a result, the global economy would have further contracted, never fully able to recover the output lost during the pandemic.
Gregory Daco, chief economist at EY-Pantheon and former chief US economist at Oxford Economists, retweeted data shared by Frederik Ducrozet, a global macro strategist at Pictet , on the final euro area January Harmonised Index of Consumer Prices (HICP) report that looked even worse, as inflationary pressures appeared to be further broadening out amid Covid flare-ups.
Ducrozet tweeted that the cleanest measure maybe core inflation over two years at an annual rate given the pandemic-related distortions. As a result, the euro area was close to, and about to exceed its 2% inflation target.