6 Economic Impacts of COVID-19 in the U.S.
A person can’t listen to a news broadcast for more than a few minutes these days without hearing coverage of COVID-19 economic impacts in the United States. Here are six examples of how the virus affected — and continues to harm — the U.S. economy.
1. Businesses face prolonged downturns
Many businesses and industries got the go-ahead to reopen. That doesn’t mean people are necessarily ready to give them money, however. A recent poll investigated travel preferences after COVID-19, and only 17% of respondents reported starting to research travel destinations. When asked about the first trip they’d take when permitted, a mere 4% wanted to go to a theme park, and 3% picked embarking on cruises. Most prioritized visiting family members first.
Another poll found that 4 in 10 Americans would avoid concerts and sporting events until researchers develop a vaccine. Another 40% said they would hold off even if creating a vaccination took more than a year. Others remained unsure about their futures of attending such gatherings, and some said they would not go to them again.
These findings show that restarting the U.S. economy is not as simple as opening enterprises. People may not spend their money on experiences that make them feel unsafe. In that case, organizers of conferences, festivals, and performances may need to look at virtual events for longer than anticipated.
2. Organizations implemented hiring freezes or reductions
People who hope to get jobs after the pandemic eases may find significant reductions in open positions. Research found that 42% of organizations polled in North America had reduced or ceased their hiring efforts. A further 28% of respondents said they would or might do the same.
Those impacts affected the hiring of seasonal workers at 18% of businesses, with 35% saying they planned or considered to hire fewer or no seasonal workers. These changes may mean that people who are lucky enough to find companies willing to hire have to work especially hard to prove their value as potential employees.
3. Small businesses are under threat
One study reached out to nearly 6,000 small businesses in the United States to determine the COVID-19 economic impacts on their operations. Financial fragility was a common theme, with three-quarters of those polled saying they only had enough cash to cover two months of expenses or less. A much smaller percentage — 1.8% — said the pandemic made them close permanently.
Those statistics underscore how important it is for small businesses to proactively adopt new methods to stay resilient during the coronavirus pandemic. For example, they could use social media and branded text messages to inform customers of their changed business hours and invest in floor graphics to help people social distance. Offering new services like delivery or curbside pickup could keep income flowing, too.
4. Unemployment hit more than 20 million Americans in April
Economic data shows 20,687,000 U.S. job losses in April alone. May brought some good news with the return of about 2.5 million positions. It remains apparent, though, that the unemployment issue is not going away anytime soon.
Analysts say that the recent reduction in unemployment may have merely happened because the individuals that have jobs again were the easiest ones for their employers to bring back to work. Staying tuned to the unemployment numbers for several months will give economists a clearer idea of the job market outlook.
5. Black Americans are at an increased risk for economic challenges
The recent protests surrounding police brutality and the impacts on black Americans reminded many white Americans of their privilege. Analysts from NPR also broadcast coverage of the COVID-19 economic impacts affecting black Americans more than other groups. They pointed out how COVID-19 illuminated challenges that black Americans faced before the pandemic.
For example, one expert said how black Americans make up 13% of the U.S. population, but hold less than 3% of its wealth. Moreover, this group of residents is most likely to work in essential roles. Many have to choose between keeping their jobs and protecting their health. The lack of financial wealth among African Americans means that those who lose their jobs, get sick, or experience other obstacles during the COVID-19 crisis may face extra hardships while trying to recover.
6. Some metropolitan areas went through early and particularly severe impacts
Researchers analyzed 191 metropolitan areas in February and March 2020. They found that the impact of the coronavirus on the U.S. economy was particularly severe in certain regions. The data showed that 10 hard-hit metro areas accounted for more than half of the total job losses across all the cities studied.
The team found that some of the destinations burdened with early and substantial increases in unemployment emerged as some of the pandemic’s epicenters, such as New York City and Los Angeles. The timeframes for government bodies acting to control the spread also played a role in the effects.
No universal fix for the U.S. economy
These examples show that dealing with the COVID-19 economic impacts will not be simple. Many places, people, and sectors are more or less affected than others. Authorities must take that information into account when suggesting solutions.