What Are the Obstacles to Economic Recovery?
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While the economy is close to recovering, it is still only at 93 percent of where it was in March of 2020. It has bounced back relatively quickly considering that the COVID-19 pandemic is still upon us, but there are plenty of reasons that the economy lags behind. Work needs to be done to not just get to where it was when the first lockdowns were mandated. The economy needs to continue to grow beyond that in order to provide the posterity necessary to make through this difficult time. So, what are the obstacles to economic recovery and how can we overcome them?
Unemployment
One of the main reasons that the economy continues to recover is that there are still over two million people unemployed. Since two-thirds of the people who filed for unemployment were making more money on their benefits than they were at the jobs, millions of people have chosen to ride the unemployment checks out before finding a new occupation or going back to their old position. This won’t last forever. Many of the unemployment claims expire in September and it will be a while before everyone is employed again. When unemployment runs out, it will greatly help the economy overall.
New Workers
While there have been millions of people unemployed, thousands of newly graduated college students who are now looking for their first career occupations. In May of 2021, about half of the students who graduated in 2020 were still looking for work. Now the 2021 graduates have joined them. This will create a lot of competition in the job market. With millions of people unemployed and thousands graduating and looking for a start to their career, as the months go on it will be increasingly difficult to find a job—possibly prolonging the numbers of unemployment and full economic recovery. If you’re looking for a job, it may help to remember that companies have a lot of candidates and are using methods like employee background check services to narrow down their options.
Business Obstacles
The obstacles that businesses are facing will be difficult to summarize in a single section because they are so multifaceted and complex. People have lost their small businesses all over the country. Companies both large and small are dealing with vacancies and shortages of employees. They’ve had to cut back on essential services such as accounting, advertising, and marketing. Whatever field a business is in there have been setbacks, unless you are in one of the few industries that thrived under pandemic conditions. There has been less money to go around so people are buying less products. Unfortunately the obstacles businesses are facing won’t be overcome until the economy has fully recovered and exceeded the growth in March of 2020.
Transfer of Wealth to the Wealthy
During the pandemic, there has been a giant transfer of wealth from the lower and middle classes to the upper classes. US billionaires have become 62 percent richer during the pandemic, their wealth up $1.8 trillion. Elon Musk alone gained over 600 percent. You can also see this transfer of wealth in the stock market. The DOW Jones Industrial Average tanked in March of 2020 but made a surging comeback, even reaching record highs. Rich people are still investing, which is another reason why the wealth has moved further to the top. A healthy middle class is essential for a healthy economy. For our situation to improve collectively, the middle class will need to grow and gain new opportunities for prosperity. With a shrinking middle class and a bloated wage gap, the greater good doesn’t benefit.
It doesn’t matter what side of the political aisle you’re on, economic recovery is necessary to avoid larger disasters. People need to go back to work. Companies need to have enough employees, assets, and resources. Small businesses need to be subsidized and invested in. The middle class needs to grow and people need to have more money in their pockets and bank accounts to spend. While the recovery has been slow, there is a clear path forward. It will take longer than we’d like, it’s pivotal to stay steadfast and work towards economic progress and growth.
