How COVID 19 has impacted the American economy

The recent COVID- pandemic has illustrated how devastating and disruptive health concerns can be for the overall economy. The pandemic has caused unprecedented economic disruption and loss of life throughout the world. Unfortunately, no country was immune to the adverse consequences presented by the pandemic. In America alone, over 500,000 individuals have died from the virus with millions of other Americans becoming sick. Third world countries, where access to resources and medical care are limited, faced very dire circumstances as their countries were ravaged by the virus. Worldwide, roughly 118 million people have been infected by the virus with nearly 3 million dying from it. It is during these periods that Christian values an ethics are at their greatest. Christians from around the world gather in solidarity to administer add to ailing victims around the world. Christians donated millions of dollars to supply protective equipment for vulnerable populations including the elderly, healthcare workers, teachers, and other front-line employees. Many churches organized food drives to help mitigate the impacts of job loss on victims of the virus. Still others ministered to the sick while they battled the virus for survival. All these activities showcase the power of not only American ingenuity and grit, but also the resolve of the Christian population. It is these activities that allow people to continue through, what many consider, the toughest economic circumstances since the great depression. As Isiah 58:10 reads, “If you pour yourself out for the hungry and satisfy the desire of the afflicted, then shall your light rise in the darkness and your gloom be as the noonday.” It is impression how resilient the overall community is as it relates to this virus (Woodman, 2006). Although much work remains to fully combat the virus, its implications on business, society, and individuals is progressing. This proposal looks to examine the impacts of COVID-19 on American civilization, with a Christian worldview. The proposal will deter areas of concern related to industry, the implications of stimulus efforts on the economy, and the future of society once the virus is fully defeated. This analysis will be conducted with an eye on Christian perspective and how they align or do not align with current societal initiatives (Fernandes, 2020).

To begin, coronaviruses are a type of virus. There are many different strands and types of the virus that vary in their severity or attributed. One such kind of coronavirus is SARS-CoV-2, which is the primary catalyst and cause of the worldwide pandemic of respiratory illness known popularly as COVID-19. COVID-19 first appeared in December 2019, in Wuhan, China. The exact origins of the virus are current unknown, but many sources believe the cause to be from seafood or other animals within the area. Investigations are still on-going as to what the exact cause of the virus was. The virus itself is highly contagious and can be spread through droplets released in the that air. This is particularly relevant when a person coughs or sneezes. The droplets once a person sneezed occupy a surface and can remain active on the surface for days. As a result, individuals who contact an infected surface can themselves become infected. This presents interesting problems as it relates to the overall transmission of the virus as commonly used surfaces act as a transferring agent for the virus. Doorknobs, bathrooms, commonly used counter tops, shopping carts, and other commonly used items can all impact the way in which the virus is transferred. As a result, social distancing and masks are required to help mitigate the spread of the virus to unsuspecting individuals in commonly used areas. Once infected, symptoms typically include coughing, fever, chills, muscle soreness, fatigue, and diarrhea. In other cases, severe symptoms include respiratory difficulty, kidney failure and is certain instances, death. Deaths typically occur with the older population of society. There is also a higher propensity of death for individuals who have preexisting conditions. This population has contributed heavily to the death rate in the United States. As of March 5, 2021, 2,569,422 deaths have been attributed to COVID-19. However, 65,383,259 people have recovered from the illness (Baker, 2020).

The severity of the diseases, along with the ease of infection have created a worldwide pandemic. The pandemic has driven large decline in economic productivity. In America for example, Gross Domestic Product, or the value of the goods and services bought sold and produced in America, decline by 4% in 2020. The decline was particularly heavy in the travel, tourism, and retail industries. Each of these industries experience large declines due to business shutdowns and overall apprehensions related to travel. Due to the need to social distance, retail chains experienced large declines in shopper traffic. Chart 1 below indicates the overall decline in department store revenue (Kowalczyk, 2020). Although the trend is lower revenue from department stores has been occurring for the past decade, the COVID-19 pandemic exacerbated many of these trends.

Chart 1 – Department Store Revenue Decline.

Chart 2 below presents department store foot traffic which as also been trending lower over the past decade. Much like the revenue figures presented above, the trends of lower shopper traffic have been occurring for nearly a decade as consumers adopting much more efficient online shopping behaviors. This trend was also exacerbated by the COVID-19 pandemics. The combination of lower consumer traffic, shelter in place orders, economic closures, social distancing restrictions, and changing consumer purchasing behaviors all placed dire circumstances on the retail industry. As a result, many companies filed for bankruptcy in 2020 during the height of the pandemic. This list includes iconic brands such as JC Penny, Neiman Marcus, Pier 1, and Brooks Brothers. Other, smaller retail brands also filed for bankruptcy including True Religion, G-Star, Lucky Brands, GNC, and Aldo. A massive wave of bankruptcies and furloughs within the retail industry ultimately weighted heavily on the future job prospects of the American economy. To date nearly 300,000 individuals have been furloughed or laid off from the retail industry.

Chart 2 – Decline in Foot Traffic

The travel and tourism industry has not fared much better from an economic perspective. This industry was also heavily harmed due to many of the factors that contributed to the decline of retail over the last year. Unfortunately for the tourism sector, many of the influences that befell the retail industry, where exacerbated with the tourism industry. For one, the cruise and air travel industry were heavily impacted due to how the virus is transmitted. Both industries require customers to be in tight, confined spaces which are ideal for the spread of COVID-19. In addition, there is no immediate remedy to solution once the airline is in the air or the cruise ship is in the ocean. This results in a set period where the virus can easily be transmitted from individual to individual. As expected, consumers warry of contracting the virus, ultimately opted to not purchase these products. Both industries are heavily dependent on fixed costs to provide these services. Planes and cruise liners require a very large commitment on the part of the company. As they are fixed in nature, the industries incur the costs of production and maintenance irrespective of the actual volume of consumers who purchase the product. This puts both the airline and cruise industry in a very precarious position relative to their retail counterparts. For one, both airlines and cruise lines have heavy fixed cost investments that were purchased heavily with debt. The company incurs debt, interest, and fixed cost maintenance charges irrespective if the assets are used or not. As consumers stopped purchasing the products, the industries were still incurring the costs associated with these fixed costs putting further pressure on their overall solvency. As a result, the companies were threatened with potential bankruptcy resulting is still further layoffs and economic contagion. Thankfully, the government provided stimulus that ultimately allowed the companies to remain productive while the impacts of the virus subside.