Pause and Effect?
With the global economy largely on pause due to the ongoing Covid-19 pandemic, what long term effects will an almost unprecedented economic standstill have on output, growth prospects and perhaps most importantly, jobs around the world?
Looking back through history, the last major worldwide pandemic of the nature we are all currently living through, was the Spanish Flu as it was commonly referred to, which lasted for nearly three years from January 1918 until December 1920.
The pandemic, which was a H1N1 virus which in very simplistic terms causes red blood cells to clump together, infected around 500 million people, which was about a third of the world’s population at the time. It is said to have killed approximately 50 million people and remains one the most deadly pandemics recorded, with the second wave proving much more deadly that the first.
The Black Death (The Plague), which is reported to have originated from Central or East Asia, is the pandemic responsible for the most number of fatalities in history, with deaths of up to 200 million people between 1347 and 1351, killing between an estimated 30-60% of Europe’s population alone. Following the end of the Black Death, it took Europe around 200 years to recover its population to pre-pandemic levels.
Today, medical science is well advanced and fast paced, which gives some hope that large scale vaccinations will become mainstream relatively quickly for Covid-19 and other strains of coronaviruses and other similar viruses, but the deadly nature of such contagious diseases has resulted in major unprecedented lockdowns across the world.
In such circumstances most people are, quite rightly, adhering to the most major cultural change in living memory in terms of the way we all communicate, socialise, shop, educate and of course work.
With the UK government supporting millions of people’s wages and at the time of writing, America reporting unemployment figures of over 26.5 million people, clearly supporting people’s incomes on this scale isn’t sustainable in the long term. The borrowing required in the UK to date already far exceeds the bailouts following the 2008 market crash, often referred to as the Credit Crunch or the Great Recession.
Many people are wondering what will the world look like when we finally emerge from lockdown and hope that a second wave doesn’t force us back in to virtual hibernation?
Clearly, the way millions of people work in 2020 is far different than it was in 1920 with most UK jobs not being reliant on factory work (although thousands do work in our great manufacturing industry of course) so lots of workers are able to remain relatively productive during this strange period in history.
The days of driving a combustion engined car 25 miles to the office only to return home again a few hours later may become less common though as people adapt to working from home, thanks to the technology available to so many of us today which simply wouldn’t have been an option during the Spanish Flu period just 100 years ago.
Social interaction and mental health play an extremely important part in the way we all function and in our productivity so it will be interesting to see the long term implications of people physically distancing and whether when the restrictions are lifted some of these measures will have become habits, which even when not necessary, may remain part of everyday life for millions of Britons and people all over the world.
Retail has been changing hugely over the last ten years in particular and looks set to continue on its path towards a more internet based business model as many predict anyway, as opposed to the traditional bricks and mortar malls. Historically, malls and shopping centres have been a place to meet and socialise and to have a coffee or lunch whilst picking up some shopping, or just browsing. How this unfolds with distancing measures becoming widespread remains to be seen but I think it’s generally accepted that looking at alternative, more relevant uses for many of our shopping centres and certain parts of the high street is inevitable.
Office space has been changing long before any of us had heard the terms “coronavirus” and “covid-19” as many small businesses realised they can work just as well from home or a cafe most of the time, perhaps with some flexible cheap desk space too and a simple mailing address, as well as many larger businesses recognising the vast cost savings by not having large, often under-utilised space, rented or owned within their business.
At the end of the day most human beings are social animals and often crave being around other people for the interaction, ideas and fun it can bring. Something which isn’t quite the same on a video call, however good and convenient this may be. I expect we will go back in part to the way we used to live and work but I doubt it will ever be exactly as it was on a number of levels. We are entering and unprecedented period which will continue to be a shock for many people as the economic impact of will be felt for many, many years and in real terms won’t be paid for for generations to come. We are very much at the beginning of this new world, as opposed to coming out of it in my opinion, as even when the health risk reduces, the lifestyle choices, habits and new economic challenges will continue to drive us toward a different way of living in many respects.
In order to make the fight back as effective as it can be, supporting micro, small, medium and large businesses is vital, as it always has been. Perhaps now more than ever though people will remember the businesses who were there when they needed them, and equally the ones who weren’t.
From hard working people in the nation’s supermarkets, people keeping the streets clean, the frontline workers in the NHS, Police, Fire Service and care workers and to all the unsung heroes in all corners of our society, including the millions of entrepreneurs who often risk everything in setting up a business in the hope of success for themselves, their families, the people they employ and the communities they directly and indirectly benefit, by working very long hours with no guaranteed wages, income, sick pay, holiday pay (and often no pay even when it does go right!), thank you for everything you do.
Together, public, private, big, small and everything in between, we will rebuild our economy and livelihoods and remain, Great Britain.