Politics and the Economy
May 19, 2020
A crisis as extensive and damaging as the COVID-19 pandemic should never be taken lightly, especially when it can and will directly affect the economy. The financial details surrounding the COVID-19 pandemic are some of the most important effects that the crisis is having on everyday lives. Hundreds of thousands of jobs have been eliminated or furloughed, all while unemployment numbers have skyrocketed in the US. Solutions to these various problems, along with reopening the economy, are all being made as we go by President Trump and the White House Coronavirus Task Force, led by Vice President Mike Pence. All of the various actions taken since the COVID-19 crisis was declared a national emergency have rippled not only local change, but national change to our daily lives.
The concerns surrounding the job market are high, since so many Americans have already lost their jobs due to this pandemic. The statewide stay-at-home orders issued by most states’ governors have resulted in thousands of business closures. For instance, the Walt Disney Company has closed all of its resorts, theme parks, cruise lines, and stores indefinitely, resulting in 43,000 jobs being furloughed. Another company that has had major downsizing is Macy’s department stores, which furloughed 125,000 employees as of March 30. These companies, like many other retail stores and theme parks, are legally obligated to be closed. All of the employees that would normally be doing on-site work like landscaping, construction, or stocking cannot work until these locations are allowed to reopen. The longer the stay-at-home orders are issued, the more likely these furloughs will become permanent layoffs due to these companies’ extreme loss of revenue. Small businesses are suffering similar consequences. Local businesses such as KidsCommons in downtown Columbus must keep their doors closed until further notice, which has resulted in many employees making zero income. If small businesses like KidsCommons stay closed for too long, they may go out of business permanently since they cannot provide contactless services like restaurants or bakeries.
These closures and furloughs have a direct impact on the economy as a whole. The Walt Disney Company’s loss of revenue has significantly impacted the value of its stocks, along with many other companies like Under Armour, Macy’s, and General Electric. The stock market suffered extreme losses in March 2020, and had some of its worst days in history. Since then, it has recovered some, but not enough to make up for the losses it faced earlier this year. Similar to the other issues being brought up, the longer these closures go on, the worse these conditions will get. Along with the stock market’s trouble, international business has faced similar concerns. For many businesses, goods are made in China and shipped to the US for sale. However, with borders being closed and safety concerns for items being shipped from places like Italy and China, those goods cannot be shipped. So for many companies or small businesses, they are left with no choice but to close up shop until they can get their products again. This also is the case for movie and entertainment franchises. Theaters like AMC, or local ones like Yes Cinema, are required to be closed for public health concerns across the nation. Therefore, no new movies can hit the theaters and produce revenue. For instance, Disney/Pixar’s Onward was released March 6 in theaters, directly before all of the closures were instated. Once the theaters were required to close, Disney moved Onward onto its streaming service (Disney+), taking a major loss on the movie’s theater opening. Many other movies’ release dates have been pushed back to the end of the year such as Black Widow, Mulan, and No Time to Die. Many of these films still do not have a set release date, since the uncertainty of the COVID-19 situation has left an end date up in the air.
While many things still remain closed, the White House Coronavirus Task Force has recently announced a plan for reopening the economy in the coming weeks. On April 16, President Trump announced his three phase process for reopening the United States economy. The plan is designed for states that were hit less hard by the COVID-19 pandemic than states like New York or Washington. The first phase is basically what Americans are doing; social distancing. People are encouraged to avoid close contact with others, refrain from unnecessary travel, and avoid gatherings of more than 10 people. Phase two involves practicing social distancing when possible, but resuming small gatherings. Travel can resume and gatherings of more than 50 people are discouraged. Finally, phase three is when Americans can return to “everyday life.” Isolation of any new infections will be necessary, and practicing good hygiene and moderate social distancing is encouraged. This plan, as laid out by President Trump and the task force, is said to have most Americans returning to normalcy soon. Large gatherings like sporting events are “going to happen and it’s going to be relatively quick” according to President Trump. Many governors are encouraging the plan. Gov. John Carney says the plan “seems to make sense.”
As far as politics of these decisions go, there is plenty of backlash from both sides of the spectrum. President Trump’s financial aid packages for small businesses, along with the relief checks given to most Americans have been controversial. However, the financial relief plans have been relatively successful so far. In total, there has been two trillion dollars used for relief packages and financial aid. According to the White House, $100 billion has been given to healthcare providers and hospitals, $27 billion has gone to medical research for testing and vaccine production, and $45 billion has gone to the Federal Emergency Management Agency Disaster Relief Fund. This does not include the money that has been given to American families or the small business relief package, which is relative to their average income. The bill passed relatively quickly through congress, considering the efficiency of the House and Senate is not always up to par. The COVID-19 crisis has presented itself to be something that, while political, is capable of bringing people together through hardship.