In this first post in our series about the economy, we analyze how the overall economic impact of the pandemic on individuals in the United States. While unemployment benefits and government enacted legislation have been extremely beneficial to those in need during COVID-19, we must realize that this government aid won’t last forever. When it comes to criminal cases, theft and embezzlement are on the rise as unemployment benefits taper off. Likewise, in family law situations, we are seeing some impact due to rapidly changing financial situations.
Back in January of 2020, nobody knew the significant impact COVID-19 would have on not only our lives but also our economy. The lockdowns in mid-2020 prompted debate about how these mandated stay-at-home orders were affecting the economy. Should we have kept lockdowns in place at the expense of our economy but for the benefit of our health, or should we have pushed through the lockdowns and returned to normal while knowingly putting people at risk of contracting COVID-19? Although this issue is behind us somewhat, the economic consequences of enduring a global pandemic haven’t left us at all. In fact, as our economy slowly bounces back after the devastating hit of the last two years, we can’t help but wonder how our economy has been impacted by the pandemic, and how it will continue to affect us through this year and into 2022.
This Isn’t the First Time
For many younger generations, COVID-19 is the first big pandemic they’ve lived through. It’s hard to imagine something as intense as this pandemic has happened before. However, it was just over 100 years ago that the Spanish Flu ravaged the world and killed more than 50 million people, about 675,000 of those originating from the U.S. The economy and small businesses suffered greatly back then as well. The economic boom resulting from WWI quickly subsided, and America was hit hard by the Spanish Flu as it spread during 1918 and 1919. During this time, there was a short recession, which was trailed by a stronger recession from 1920 to 1921.
The “Asian Flu” also emerged in East Asia, spreading across Asia and reaching the coastal United States. This pandemic lasted from 1957-1958, followed by another flu pandemic in 1968. Both pandemics each resulted in roughly 1 million deaths worldwide and about 100,000 deaths from the U.S. alone. The latest pandemic, another flu virus, emerged in 2009 in the United States.
So, it’s clear that Americans have experienced both economic and personal hardships just over the last decade alone. However, we have been lucky in that there have been a variety of programs and legislation passed to help us through these difficult times.
2020 -The Year of Unemployment
Before COVID-19 hit, the Census had predicted that employment rates would rise. However, 2019 and 2020 saw an unpredicted, steep drop in employment levels. For some, lockdowns led to online work, and online work led to job loss or job stress. For others, they were let go right away and had to register for unemployment benefits. Luckily, the U.S. was quick to respond in a helpful manner, creating COVID-19 Unemployment Benefits. While extremely helpful and relieving to millions of Americans, many states are ending their unemployment benefits for COVID-19. This announcement was followed by the creation of the American Rescue Plan Act of 2021, which temporarily allowed:
- “An extension for people already receiving unemployment benefits
- Automatic, additional payments of $300 per week to everyone qualified for unemployment benefits
- Extension of the Pandemic Unemployment Assistance (PUA) program for self-employed or gig workers”
On a more federal and more well-known level, the CARES Act was signed into law on March 27, 2020. The Coronavirus Aid Relief and Economic Security Act was an economic stimulus bill created shortly after COVID-19 erupted in the U.S., with a cap of $2.2 trillion. Originally, it was supposed to expire on July 30th of 2021; however, it was extended to March 14th, 2021, with reduced benefits, then extended again through September 6th, 2021 with the MEUC program. This program, Mixed Earner Unemployment Compensation, is targeted towards freelance and gig economy workers.
Stimulus Measures and Their Economic Impact
These stimulus measures, COVID-19 Unemployment Benefits, the American Rescue Plan Act of 2021, and so forth, have helped the economy to rebound after such a long period of hardship. This positive shift began in late 2020, and has only increased now that more people are becoming vaccinated and businesses are opening up again.
In reality, every industry felt the blow of COVID-19 on one way or another. While travel, hospitality, and restaurants felt the greatest economic impact, other industries like manufacturers and the clothing market took a hit as well. As people’s spending money disappeared and the stress of job loss rose at the height of COVID-19, the American people’s desire to buy more plummeted. Even oil companies were affected as the streets became desolate during the stay-at-home orders. Given that our clients come from all walks of life, we’ve felt the impact here at Colorado Lawyer Team, too. Sure, some people used their stimulus check to splurge on something they otherwise never would have gotten, but most people just used it to get by in uncertain times.
Unemployment, Demand, and Their Economic Impact
In April of 2020, the U.S. unemployment rate rose as high as 14.8%, eventually declining to 6.8% in February, 2021, and even lower to 5.4% in July of this year. The greatest causes for a rise in unemployment rates was the mandated lockdown orders and the drop in demand for goods and services. However, as previously discussed, now that vaccinations have steadily risen and the demand for a normal life is growing, we have seen more businesses opening up and more places hiring. Walking down the street, many people will see local grocery stores hiring as well as the places that were the most impacted.
Although it’s been a long and difficult road, it seems like if we keep up the demands on goods, services, and hiring, the U.S. will be just fine in no time. Industries that once felt the greatest economic impact from COVID-19, like bars, shopping, and restaurants, have began to recover as more people return to living normal lives.
Curious about how COVID-19 is also affecting working moms as they return to the workforce? Check out our article about it here.
Need Legal Help?
If you are in need of criminal defense or family law help (and yeah, we do some animal law things outside of criminal defense and family law, too) consider reaching out to Colorado Lawyer Team for a free 30-minute consultation. Find more information at https://CoLawTeam.com or call 970.670.0378.
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