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COVID-19 and the American Economy
1. Introduction
a. Story
The COVID-19 pandemic has created economic and public health in the U.S. and
across the globe.
b. Statement of the problem
The pandemic has brought the economy into a slowdown while it pushed the health
system to its capacity.
The economic impact of the pandemic is exemplified in the significant rise of
unemployment due to the closure of businesses and industries.
c. History
The economic consequences of the COVID-19 pandemic come in addition to the
overburdened healthcare sector. It has impacted income due to workplace
absenteeism, negative supply shock, and reduced productivity.
d. Thesis: The COVID-19 pandemic has indiscriminately affected economies around the
globe, leading to the dissemination of key sectors such as production and
manufacturing. While there is no clear end in sight, economies are already making
recovery plans to bounce back and make their systems more resilient and sustainable.
2. Body Section Two
a. The extent of the problem
Governments around the globe have struggled to contain the spread of the virus. The
burdened health systems in most countries made it necessary for governments to
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impose travel restrictions to prevent the spread of the virus (Primiceri & Tambalotti,
2020).
b. What happened
Most governments imposed lockdowns and curfews to restrict the movement of
people since the virus spreads through person-person contact or air and water in some
cases.
c. Why we should be concerned
The main concern of the government actions was that they had a severe impact on the
economy. Most businesses shut down because their supply chain processes were
disrupted. Similarly, the travel restrictions impacted the mobility of labor (Park et al.,
2020).
3. Body Section Three
a. What is affected
With the reduced productivity due to a limited number of workers allowed in
companies simultaneously, businesses found profits hard to come by.
b. Explanation
As a result, most businesses resorted to downsizing to minimize costs and survive the
pandemic (Maital & Barzani, 2020). The loss in income affected households and
increased the dependency rate.
c. Facts
Before the pandemic struck, the U.S economy was thriving. The unemployment rate
hit a 50-year all-time low, while the figures posted during the pandemic are
reminiscent of the Great Depression (Patton, 2020).
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4. Body Section Four
a. Cause/Effect
Because of the pandemic, companies retrenched employees to cut costs and survive
the plummeting sales and production.
Customer preferences also changed during the pandemic as they focused on
purchasing essential products rather than luxuries.
b. Repercussions of the pandemic
Most of them will shut down if the government does not give incentives to affected
businesses and economic units due to accrued debts, declining production, and
reduced market share (Bauer et al., 2020).
Similarly, the business also needs to lay down strategies that will them recover from
the pandemic's adverse economic impacts and make them more resilient to counter
future pandemics.
5. Body Section Five
a. Possible solutions
Companies need to diversify their production processes to focus on products that will
target the changing customer preferences.
There is an urgent need to reduce production costs to allow companies to lower their
commodities' prices (Walmsley et al., 2021). This strategy will impact the overall bottom
line as it is sustainable for the long term.
6. Conclusion
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a. The COVID-19 pandemic has had an unprecedented impact on the U.S. economy.
The pandemic has led to the dissemination of major economic sectors causing
massive job loss and a decline in production.
b. Customers changed their preferences and consumption patterns, favoring the purchase
of only essential products.
c. As a result, some businesses closed down their operations while others laid-off
employees to cut costs.
d. The government can provide subsidies to affected industries to support their recovery.
Companies can also prioritize reducing the production costs to impact the bottom
line.
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References
Bauer, L., Broady, K., Edelberg, W., & O’Donnell, J. (2020). Ten Facts about COVID-19 and
the U.S. Economy. Brookings. Online Version. doi.org/10.3389/fpubh.2020.00241
Maital, S., & Barzani, E. (2020). The global economic impact of COVID-19: A summary of
research. Samuel Neaman Institute for National Policy Research, 2020, 1-12.
https://www.neaman.org.il/EN/Files/Global%20Economic%20Impact%20of
%20COVID-19_20200322163553.399.pdf
Pak, A., Adegboye, O. A., Adekunle, A. I., Rahman, K. M., McBryde, E. S., & Eisen, D. P.
(2020). Economic consequences of the COVID-19 outbreak: the need for epidemic
preparedness. Frontiers in public health, 8, 241. https://deceptivescience.com/wp-
content/uploads/2020/11/FutureShutdowns_Facts_LO_Final.pdf
Patton, M. (2020). The Impact of Covid-19 on U.S. Economy and Financial Markets.
https://www.forbes.com/sites/mikepatton/2020/10/12/the-impact-of-covid-19-on-us-
economy-and-financial-markets/?sh=1d8a9fc52d20
Primiceri, G. E., & Tambalotti, A. (2020). Macroeconomic Forecasting in the Time of COVID-
19. Manuscript, Northwestern University, 1-23.
https://faculty.wcas.northwestern.edu/~gep575/PredictionCovid1-5.pdf
Walmsley, T. L., Rose, A., & Wei, D. (2021). Impacts on the U.S. macroeconomy of mandatory
business closures in response to the COVID-19 Pandemic. Applied Economics Letters,
28(15), 1293-1300. doi.org/10.1080/13504851.2020.1809626
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