As the impact of Covid-19 pandemic has brought the world wide economy to a halt, millions and millions of employees have been fired, furloughed or are informed that they might lose their jobs due to the Covid-19.
The burden of the crisis has fallen heavily across the globe, workers and businesses are facing catastrophe in both developed and developing countries. The number is jaw dropping – more than 1.6 billion are affected by full or partial workplace closures.
A huge plunge in consumer spending power can be seen as they are staying at home and are avoiding shopping, traveling or gatherings in public places as the virus has left the economy sinking. Industries and companies are facing the markdowns because of the clear economic damage the virus is doing.
Restaurants, clubs, cinema halls, malls, airlines, hotels and other businesses were shut down at the start of the year and remained closed for months which has impacted in huge losses and have increased the rate of unemployment as they were unable to afford to pay to their workers. Around 2 billion people across the globe work in the informal sector and are particularly at risk.
In just over a month’s time, from March to April in 2020, unemployment rates have drastically increased. In the US the unemployment rate increased from 4.4% to 14.7%. In Australia, the rates increased from 5.4% to 11.7%. Whereas in India, the unemployment rate in March 2020 was recorded 8.8% which climbed straight to 23.5% in April 2020 while 21.7% was recorded in May 2020.
However, the government in many countries is helping many businesses under the furlough scheme to keep their staff on by helping to pay their wages. Under this scheme millions of jobs have been protected since the pandemic began.
The unemployment situation is so serious that developed nation like USA is extending the Corona virus Aid Relief, and economic Security (CARES) Act are providing unemployment benefits to self-employed and part-time workers through Pandemic Emergency Unemployment Assistance.
If the unemployment results for a prolonged period then it can lead to erosion of skills, basically robbing the economy of useful talents. Not just this, prolonged unemployment will hamper the savings of an individual’s which can force families to deny educational opportunities of their children which will result in depriving the economy of those future skills. The pandemic will eventually go away, but the consequences across the globe will be felt for many years to come.