The Impact of COVID-19 on the American Economy

The Impact of COVID-19 on the American Economy

The Covid-19 pandemic created both economic and public health crises in the United States. The pandemic has claimed an enormous number of lives, slowed down the economy, and pushed the healthcare systems to their capacity. For the longest time, the economy of the United States has been blossoming significantly. However, the Covid-19 pandemic has halted this economic expansion and growth as the pandemic has led to a sharp decline in the GDP and high unemployment rates (CEPAL, 2020). The future is still uncertain, and gauging the impacts that the pandemic may impose on the American economy in the coming days is difficult. This is because the impacts of the Covid-10 pandemic on the economy of America are continuous and conclusive insights cannot be confidently made as the future is still uncertain. This paper argues that the Covid-19 pandemic has negatively affected the American economy. Best essays writing services.

Background

The Covid-19 pandemic has presented a global economic shock involving rampant disruptions to the demand and supply chain in the highly interconnected global economy. In terms of supply, the pandemic has led to reductions in labor productivity and supply, social distancing, business closures, and lockdowns, all of which result in disruptions in the supply chain (Vinelli et al., 2020). On the side of demand, rampant layoffs and loss of income as a result of business closures and unemployment has led to reduced investments by companies and lower household consumption, leading to overall disruptions in demand (Vinelli et al., 2020). Just like all other regions, the United States has also experienced the detrimental effects that have been brought forth by the Covid-19 pandemic. The region has witnessed high levels of unemployment, a decline in the GDP, disruptions of the supply chain, closure of businesses, and a decline in financial markets (Vinelli et al., 2020). These could be attributed to the long periods of lockdowns, restrictions on movement, and measures such as social distancing, which were put in place at the start of the pandemic to prevent and slow down the spread of Covid-19.

Evidence/Grounds

Covid-19 has led to massive job loss and unemployment in the United States. For many decades, the United States has invested in job creation for its population. When the pandemic started, there was an instant loss of about 870,000 jobs in the first month of the pandemic (CEPAL, 2020). One month later, that is, in April 2020, approximately 21 million jobs in the entire United States economy were lost (CEPAL, 2020). This presented the most significant drop in employment ever recorded in the United States, as it was more than double the total loss of jobs recorded during the 2008-2009 financial crisis. As CEPAL (2020) puts it, “the collapse in employment is of an unprecedented magnitude and seems likely to rival or exceed that of any recession in the last 150 years.” In other words, the pandemic has resulted in the highest number of layoffs and unemployment recorded in the history of the United States. The pandemic has also disrupted supply chains, demands, and financial markets. Vinelli et al. (2020) say that “disruptions to global supply chains are one of the clearest effects of the coronavirus .”Vinelli et al. (2020) also note that “the virus will not only affect supply, but some sectors of the U.S. economy may also experience declines in demand—and big reductions in revenue—because of the overall effects on the economy.”

A study conducted by Chen et al. (2021) investigating the economic and epidemiological impacts of the Covid-19 in the United States revealed that the pandemic has led to a sharp decline in the GDP and high rates of unemployment. In summary, the research combined the American economy model with the Covid-19 disease model to determine the direct effects of the shock in labor supply to various sectors, which arise from the interdependence between sectors, lockdowns, mortality, and morbidity (Chen et al., 2021). Various pieces of literature were analyzed and synthesized. The study found that the pandemic had led to high rates of unemployment, especially in sectors such as hospitality and travel (Chen et al., 2021). In addition, results show that measures like lockdowns and mandatory closures have detrimental effects on the economy as they reduce demand for goods and services and the overall productivity of workers, but at the same time, lockdowns can help prevent about 115 million infections and save more than 100,000 lives (Chen et al., 2021). Chen et al., 2021 state that “mandatory closures do have a severe impact on the world economy and employment, and in particular the production of non-essential goods and services.”

Analysis/Backing

As the evidence outlined above suggests, the Covid-19 pandemic has affected the American economy negatively. The pandemic has led to massive layoffs and unemployment, disruptions in the supply chain and demand, and a general decline in the growth of the United States’ economy. The thesis statement of the paper was that the pandemic has negatively affected the American economy. The evidence provided seeks to analyze the effects of Covid-19 on the economy of the United States; thus, it is logical to conclude that the evidence supports the thesis statement.

Qualifier

Although the Covid-19 has brought many negative impacts on the economy of the United States, it is not entirely true that these are the only effects that the pandemic has imposed on the economy. Various studies show that the pandemic has also brought positive effects on the economy as well. One positivity that has been brought in the economic sector is increased innovations and discoveries, especially in the medical, industrial, and environmental sectors. People have been challenged to create more efficient means of production and establish novel ideological constructions. Businesses have also been offered new opportunities for diversification and exploration of new markets as the Covid-19 pandemic has changed consumer behavior and market needs and preferences (Karunathilake, 2021). This has led to the formation of new supply chain and production networks. In addition, the pandemic has necessitated the invention of Covid-19 vaccines, which have opened up a new opportunity for innovative businesses. These positive effects suggest that it is not entirely true that the Covid-19 pandemic has led to adverse effects on the United States’ economy.

Counter Claims

The pandemic has also brought several positive impacts on the American economy. The pandemic came along with many restrictions like social distancing and lockdowns, which challenged the physical operations of many businesses. This pushed the affected businesses to digitalize their operations like connecting with customers, managing supplies, and coordinating internal communications. In addition, many companies allowed their employees to work remotely to reduce the spread of Covid-19. This increased more utilization of digital devices and the internet, leading to the spontaneous growth of businesses dealing with technology and the provision of internet services (Karunathilake, 2021). Consequently, the telecommunication industry has expanded massively due to the pandemic. Moreover, the pandemic has necessitated the need for innovation, especially in the medical fields, as the demand for Covid-19 vaccines increases. This has brought new market opportunities and a general increase in revenue generation in the healthcare sector (Karunathilake, 2021). As such, the Covid-19 pandemic has not just affected the economy negatively; instead, the pandemic has equally created new opportunities and avenues for innovation, which some businesses have found highly lucrative and profitable.

Rebuttal/Refutation

The paper’s central claim is that the Covid-19 pandemic has negatively affected the economy of the United States because it has led to rampant unemployment, disruptions in the supply chain and demand, and halted economic growth. The counterclaim against this argument is that the pandemic has also brought positive impacts on the economy as businesses have embraced innovation and digitalization, which has led to enormous revenue generation for various businesses. Both the claim and counterclaim have been critically discussed in the previous sections.

In conclusion, the Covid-19 pandemic has affected the United States’ economy in multiple ways. The pandemic has led to unemployment, reduced economic growth, and disrupted demand and supply chains. The pandemic has resulted in the highest number of layoffs and unemployment recorded in the history of the United States. These effects can be attributed to various measures like lockdowns, business closures, travel restrictions, and social distancing. Despite these negative impacts, the pandemic has also brought new opportunities for innovation. The pandemic has increased the utilization of digital devices and the internet, leading to the spontaneous growth of businesses dealing with technology and the provision of internet services. As such, the Covid-19 pandemic is a double-edged sword that cuts both the negative and positive implications on the American economy. However, the future is still uncertain as the pandemic is still in place, and the effects continue to change each day. Therefore, it is critical that more research should be dedicated to this area so that all possible effects of the pandemic can be understood critically.

References

CEPAL, N. (2020). Impact of COVID-19 on the United States economy and the policy response. https://repositorio.cepal.org/bitstream/handle/11362/45984/1/S2000540_en.pdf

Chen, J., Vullikanti, A., Santos, J., Venkatramanan, S., Hoops, S., Mortveit, H., … & Marathe, A. (2021). Epidemiological and Economic Impact of COVID-19 in the US. Scientific reports, 11(1), 1-12.

Karunathilake, K. (2021). Positive and negative impacts of COVID-19, an analysis with special reference to challenges on the supply chain in South Asian countries. Journal of social and economic development, 23(3), 568-581.

Vinelli, A., Weller, C. E., & Vijay, D. (2020). The Economic Impact of Coronavirus in the US and Possible Economic Policy Responses. The Center for American Progress. https://www.americanprogress.org/article/economic-impact-coronavirus-united-states-possible-economic-policy-responses/