Cyclic Unemployment due to Recession
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The coronavirus pandemic is the greatest challenge that the world has ever faced since World War II. Since the onset of the infection last year, the virus has greatly affected most of the world’s continents apart from Antarctica. During this tragic period, several demises are witnessed; individuals have also suffered to a great deal due to many losses because the government has intervened to control the crisis by imposing strict rules like social distancing and ban of gathering. Economically, people have primarily been affected because they could not access their work areas as most industries and businesses are closed to avoid the spread of the virus. Similarly, many countries’ economy is affected because their operations are limited, thereby slowing down their revenues. Therefore, the pandemic of COVID-19 rendered many individuals unemployed due to the closure of businesses and industries, which affected consumption, education, and spending.
The consumers are significantly affected in the pandemic period as they have low capital to spend on the goods. Due to the pandemic, it rendered many individuals to be laid off as a result of the closure of businesses, hence having less or no money to spend on goods and services. Similarly, those who were left running the business had inadequate revenues generated due to the fewer consumers in the market (Stuart, 2019). Also, the industries lowered the salaries and wages of those workers who remained in operation. Besides, the production of the sectors dropped due to the few consumers in the market.
Also, the governments are affected due to the inadequate revenue collection. Following the many individuals are rendered jobless due to the loss of their job in industries and businesses. Therefore, due to the inadequacy of revenues, it led to the slow development of most countries’ projects(Stuart, 2019). Some of the sectors that promote the economic growth of countries like education have far-reaching effects on other sectors.
Consequently, this is a pandemic case because the education sector is one of the highly affected areas. Education is vital for any economic growth because it is the human capital that drives development. According to the American, it is believed that social capital was very crucial in the rise of their economic growth( Owan, 2017). Hence, education cannot be left behind when there is a need to upgrade its production. Therefore the pandemic resulted in the closure of this vital sector of economic growth; thereby, this can have lasting effects on the countries’ economies. The recession that has resulted in this period has affected most families because the parents have lost their jobs; hence they cannot meet the parental duty of funding their children’s education. Other families are made poor as they are not generating income, and if they are obtaining any payment, it is less to the extent that it cannot meet their needs. Thus the children’s comprehension is affected because they cannot get improved nutrition for their cognitive development. Also, an achievement like health services is determined by education. Some other students are forced to leave the schools because they cannot continue having debt fees.
Additionally, the economic challenges force people to acquire credits to cater to their needs to sustain their families. Also, businesses lack alternatives and therefore find it easier to get loans from banks or friends. Consequently, they incur more debts that can be hard to pay back.
Therefore the pandemic has caused more devastating impacts on the economic growth of the sectors that promote it like revenues, education, and consumption. Hence, many individuals, businesses, and industries cannot compete globally because they have economic power. However, economic growth can be realized with every individual’s effort to take part in building it.
References
Owan, L. M. (2017). The Effects of Recessions and Market Sizes on NBA Player Salary.
https://scholarship.claremont.edu/cmc_theses/1491/
Stuart, B. A. (2019). The Long-Run Effects of Recessions on Education and Income.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3408324