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February 15, 2022

Macro view: Most Americans gained economically in the pandemic

Some economists believe that most Americans are ahead economically in the pandemic, despite the rise in prices.

Arindrajit Dube

Arindrajit Dube, a professor of economics at the University of Massachusetts Amherst, retweeted an article shared by John Hardwood, a White House correspondent for the CNN, on two-thirds of the Americans seeing their wages rise faster than inflation since the beginning of the Covid-19 pandemic. Consequently, wages of one-third of the working Americans exceeded inflation over the last year.

Economists state that despite the Covid-battered economy and high inflationary prices, there is a growing demand for labour, implying lower-income workers are now in a position to demand higher wages that should outpace the rising prices. In addition, even middle-income workers are in a position to switch their jobs for higher wages.

America recorded its highest inflation in four decades by reaching 7.5% on an annual basis, according to official data. However, the country also reported the highest economic growth in four decades accompanied with an unemployment rate of just 4%. The University of California-Berkeley economists estimate that the disposable income for Americans have increased by 5.3% after inflation from December 2019 to December 2021. As a result, considering the effects of both Covid relief payments and labour income, the bottom 50% of earners saw their disposable income rise by 10.9%, compared with 3.8% for the middle 40% of the earners, and 4.4% for the top 10% of the earners.

Khanh Vu

Khanh Vu, a Reuters news Hanoi journalist, shared an article on high Covid-19 vaccinations allowing Vietnam to keep its factories open and continue production amid a record rise in Covid-19 infections, thereby reversing a policy of extensive lockdowns implemented nine months ago that hit the supply chains for Western retailers.

Vietnam is a key exporter of clothing, shoes, smartphones, and electronics. The country recorded more than 26,000 new Covid-19 cases on Sunday, or double the peak last year, with factories of leading brands such as Nike, Zara, Samsung, and Apple shutting down for months.

According to the government, nine months ago much of the population was not vaccinated against Covid-19 when the Delta variant was circulating across the world. However, this time round the population is fully vaccinated to endure the rapidly spreading Omicron variant and causing less severity, hospitalisations, and deaths.

Health ministry data suggests that more than 76% of Vietnam’s population is fully vaccinated, with two doses of the vaccine, up from the 3.3% reported in September last year. The country has gradually begun relaxing its restrictions in recent months, and also re-opened its schools. The government also announced that it would be lifting rules on international passengers flights as well.

Wojtek Kopczuk

Wojtek Kopczuk, a professor of economics and of international and public affairs, department of economics at the Columbia University, tweeted on an interesting piece on Covid Kremlinology. He stated that President Putin’s harsh or irrational decisions related to Covid restrictions may go against popular sentiment, even among the oligarchy, but poses huge risks for him. Kopczuk tweeted that the problem lies in him not talking to economists and relying on a small group of security advisors that share a KGB background and beliefs of a deep-rooted skepticism of the west that borders on the conspiratorial.

According to close associates, Putin’s forceful stance is partly due to the fact that he takes extensive efforts to avoid falling sick with Covid. As per the Kremlin’s quarantine protocols, all Russian visitors are required to self-isolate for two weeks before meeting him. The President has also made few international trips since the start of the pandemic, with all cabinet meetings held via video, and reduced appearances at events.  

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