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Unemployment crisis due to covid 19 having a unique impact

 

Rayhan Ahmed Topader:

 

 

More than one in six young people have stopped working since the onset of the coronavirus pandemic while those who remain employed have seen their working hours cut by 23 percent, according to the latest International Labor Organization (ILO) data.

The Covid-19 economic crisis is hitting young people harder and faster than any other group. Young people have to face many hard situations including disruption to education and training, employment and income losses, and greater difficulties in finding a job. The ILO also uses the term “lockdown generation” to describe young people facing multiple shocks from the Covid-19 crisis, including increased vulnerability to anxiety or depression.The world is confused and frightened. Covid-19 infections are on the rise across the U.S. and around the world, even in countries that once thought they had contained the virus. The outlook for the next year is at best uncertain; countries are rushing to produce and distribute vaccines at breakneck speeds, some opting to bypass critical phase trials. Meanwhile, unemployment numbers remain dizzyingly high, even as the U.S. stock market continues to defy gravity. We’re headed into a global depression a period of economic misery that few living people have experienced. Most governments today accept a deep economic interdependence among nations created by decades of trade and investment globalization.

But those expecting a so-called V-shaped economic recovery, a scenario in which vaccinemakers conquer Covid-19 and everybody goes straight back to work, or even a smooth and steady longer-term bounce-back like the one that followed the global financial crisis a decade ago, are going to be disappointed. There is no commonly accepted definition of the term. That’s not surprising, given how rarely we experience catastrophes of this magnitude. But there are three factors that separate a true economic depression from a mere recession. First, the impact is global. Second, it cuts deeper into livelihoods than any recession we’ve faced in our lifetimes. Third, its bad effects will linger longer. A depression is not a period of uninterrupted economic contraction. There can be periods of temporary progress within it that create the appearance of recovery. The Great Depression of the 1930s began with the stock-market crash of October 1929 and continued into the early 1940s, when World War II created the basis for new growth. That period included two separate economic drops: first from 1929 to 1933, and then again from May 1937 into 1938. As in the 1930s, we’re likely to see moments of expansion in this period of depression. Depressions don’t just generate ugly stats and send buyers and sellers into hibernation.They change the way we live.

The Great Recession created very little lasting change. Some elected leaders around the world now speak more often about wealth inequality, but few have done much to address it. Large segments of society, particularly people who weren’t already on the verge of retirement, were able to hunker down and later return to the same approach to saving and investing they practiced before the crisis. They were rewarded with a period of solid, long-lasting recovery. That’s very different from the current crisis. Covid-19 fears will bring lasting changes to public attitudes toward all activities that involve crowds of people and how we work on a daily basis; it will also permanently change America’s competitive position in the world and raise profound uncertainty about U.S.-China relations going forward. Bureau of Labor Statistics, National Bureau of Economic Statistics, Eurasia Group

In addition, political dysfunction-in the U.S. and around the world-is more severe than in 2008–2009. As the financial crisis took hold, there was no debate among Democrats and Republicans about whether the emergency was real. In 2020, there is little consensus on what to do and how to do it. Most postwar U.S. recessions have limited their worst effects to the domestic economy. But most were the result of domestic inflation or a tightening of national credit markets. That is not the case with Covid-19 and the current global slowdown.

This is a synchronized crisis, and just as the relentless rise of China over the past four decades has lifted many boats in richer and poorer countries alike, so slowdowns in China, the U.S. and Europe will have global impact on our globalized world. The Covid-19 has caused tremendous negative consequences in the economy through threatening millions of livelihoods and damaging the earning sources of around 50 million people in the informal sector in Bangladesh. The aim of the study is to provide a comprehensive and demonstrative review on the observed data and the potential impact of massive unemployment that will arise in future after lock-down.The study based on secondary sources of information, since it is very tough to find any quantitative study on the extent of the widening toll on unemployment in the consequences of Corona virus in Bangladesh. Tension is growing fast in the economy due to the rapid-spread stage of outbreak of Covid-19 in Bangladesh. The study finds that massive job losses will happen in both formal and informal sectors, as all of the sectors in Bangladesh e.g. RMG, Remittance, export and import, transportation, tourism, banking and insurance, education are in vulnerable position because of the devastating effect of Corona virus.

The finding of the study shows that all of the sectors in Bangladesh e.g. RMG, Remittance, exports and import, transportation, tourism, banking and insurance, education are in vulnerable position because of the devastating effect. Small and medium readymade garments and apparel industries are going to shut their operation due to the regular cancellation of orders from retailers and foreign buyers. As a result, those who are dependent on this sector are jobless now. Thousands of migrant workers are jobless and compelled to return from abroad. Returned workers are creating extra pressure on the economy, though the existing unemployed people are around 3 millions. Country’s earnings from apparel and other sectors have been dropped because of the devastating effect of Corona virus. Private commercial banks are facing liquidity crisis due to falling earnings from RMG and  Remittance.There is a higher probability of collapsing the numbers of private commercial banks and insurance sector if this situation continues for longer period. The dreams of around 2 million graduates are in despair, as there is no available job in the market due to the economic meltdown. Both inbound and outbound tour operators are facing losses because foreign and local visitors are canceling their booking in the period of pandemic.

What could world leaders do to shorten this global depression? They could resist the urge to tell their people that brighter days are just around the corner. People need leaders to take responsibility for tough decisions. From a practical standpoint, governments could do more to coordinate virus-containment plans. But they could also prepare for the need to help the poorest and hardest-hit countries avoid the worst of the virus and the economic contraction by investing the sums needed to keep these countries on their feet. State reopenings, however, have had a marginal impact on workers returning to their jobs, economists say. About 13 million jobs still remain lost during the coronavirus recession, and permanent layoffs have grown after struggling businesses were forced to lay off workers for a second time. Oxford Economics estimates that the August unemployment report would leave the level of employment more than 8% below its pre-recession level and the economy still short of 11 million jobs compared with February. Today’s lack of international leadership makes matters worse. If Covid-19 can teach world leaders the value of working together to avoid common catastrophes, future global emergencies will be that much easier to manage for the good of all. Unfortunately, that’s not the path we’re on.

Writer and Columnist

raihan567@yahoo.com