The risks associated with COVID-19 are more than just to our health. The world economy sustained a terrible blow this year, and while it’s not down for the count, it is definitely on the ropes. In the U.S., unemployment stands at 14.7%, and as we begin to reopen states forced into lockdown, those numbers may fluctuate as service workers go back to work.
The problem is that we don’t have a vaccine yet, so many of these workers are literally putting their lives on the line to restart their personal finances. It’s a grim situation, and business leaders must tread cautiously to avoid the continued slide into another Great Depression. Here are some ways to strengthen the economy and avoid an economic knockout punch from the coronavirus crisis.
Grim Statistics Spell Trouble for Business Leadership
The April job report came out from the Bureau of Labor Statistics, and the news is very grim indeed. The current unemployment rate is “the highest rate in the history of the statistic, going back to 1948,” according to The Atlantic. They report the crisis was both sudden and huge; in one month alone, 20.5 million people lost their jobs. Leisure and hospitality were hit the worst, of course, but The Atlantic predicts the next American jobs report, for the first time in recorded history, will show that a majority of citizens in this country are not employed.
Small businesses have been hit particularly hard, whose numbers are heavily invested in restaurant and foodservice. The Atlantic suggests we are facing the decline of small businesses that could signal “a first-order economic tragedy, but it would also be a social calamity.” While the news is terrible right now, there are potentially some ways we can fight back against what seems to be the inevitable outcome from an extended global pandemic crisis.
Fighting Back Against Economic Uncertainty
While a vaccine isn’t available yet to stop the virus, business leadership should take counsel from a variety of sources that advise on the tactics necessary to survive the economic fallout of COVID-19.
Predictions show we may reach more than half of Americans facing unemployment.
The World Economic Forum (WEF) suggests a gradual lifting of lockdown requirements led by our public health experts. If we don’t reopen, it will trigger more economic and even mental health crises that will cripple our societies, perhaps for years.
To reopen properly, the WEF suggests two strategies, both medical in nature. First, serological testing that looks for COVID-antibodies in the general population. This will help us track people who have been near the virus and may have immunity. Second, rapid antigen tests are critical to cull out the infected and isolate them to prevent a second wave of the virus. Contact tracing is key to this process, and app technology can help speed it up.
The WEF concludes these suggestions with the idea that governments will need to “make fundamental changes to our economic system.” Governments must infuse cash into systems to secure business continuity and to prevent further economic collapse. The Atlantic agrees, suggesting zero-interest long-term loans to refinance existing debt, make capital purchases, and give businesses the cash they need to survive.
The coming months are critical for business leadership at all levels. How we respond this summer will make or break the global economy—perhaps for years to come.