As of April 9th 2020, more than 16 million Americans have now lost their jobs in less than 3 weeks due to the COVID-19 Virus spread. In comparison to the 151 million Americans on payrolls before the virus started to spread, this shows that the USA has lost over 10% of the working economy in a month. The great recession was calculated to have a total of 8.7 million job losses and due to this rare occasion of a virus outbreak, the numbers have already spiked up massively to 6.9 million, causing numerous economic problems such as the country’s GDP or the finances required by civilians to have a sustainable living. So should the people who are lacking jobs be prioritized over other virus-related issues in the USA right now?
According to the article, the unemployment insurance amount filed last month was $2.2 trillion dollars, the highest unemployment has ever been and the Federal Reserve plans to inject another $2.3 trillion into businesses to try and keep the economy running - struggling business’ such as restaurants or bars where people are not permitted to go to during quarantine. Food banks have also been funded to provide food to people who cannot afford it during these times. Advantages to this are that the people are still being provided with their needs such as food and their monthly unemployment income. Furthermore, by injecting more money into the economy, there is a higher probability that the economy can stay afloat and minimize the business’ having to shut down forever - especially the small business which make up a large section of the market for tourists and locals.
However, there will be an opportunity cost in doing so. With the Federal Reserve spending lots of money on supporting the unemployed, fewer funds may be received in hospitals or care centres with the outbreak of COVID-19. Necessary supplies like masks or check-up centres for the public to help prevent the spread of the virus could decrease leading to more people becoming infected. If the disease continues to spread rapidly through the USA, this would imply more people losing their jobs and becoming unemployed as businesses’ are still forced to stay closed with no income. More funds would have to be called for food banks and unemployment insurance which can further drop the country’s output in the for foreseeable future.
Conclusively, the COVID-19 outbreak has undoubtedly created various economical issues for not just the USA but the world; businesses that cannot receive income are forced to make employees redundant as seen in the USA. In my opinion, the current issue is a difficult problem to solve as the number of cases with COVID-19 has been increasing drastically so funds should be injected into healthcare and prevention; however, in the long term, the stock market and businesses’ market share would be impacted massively in a negative outcome as we once saw in the Wallstreet crash in 1929.
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