The economic crisis caused by the measures to tackle the pandemic in the developed and developing economies of the world have their consequences and implications for the whole microeconomic and macroeconomic life of the societies of the planet.<\/p>\n
The imposed measures of lockdown and social distance have caused major structural changes in the labor market and employment in general. More specifically, they caused:<\/p>\n
By Thanos S. Chonthrogiannis<\/strong><\/p>\n \u00a9<\/em>The law of intellectual property is prohibited in any way unlawful use\/appropriation of this article, with heavy civil and criminal penalties for the infringer.<\/em><\/p>\n The affected areas of these changes are:<\/p>\n This economic crisis is hitting both demand and supply in the economy.<\/p>\n The effects on employment<\/strong><\/p>\n Forty years ago, if these measures had been implemented to prevent the spread of a pandemic, there would have been tens of millions of unemployed people around the world with a high probability of the collapse of entire countries and economies.<\/p>\n The main factor that prevented this from happening today, i.e. the mass transition to unemployment of large populations of workers in this pandemic, is the technology and its rapid growth that allowed a large percentage of workers to continue their work from home without interruption.<\/p>\n Of course, there is a difference in the size of this percentage of employees working from home depending on the profession, the fields of employment and the countries where they work.<\/p>\n Developed countries have reduced their economic activity in areas of service that require the physical presence of a professional to perform their work such as retail, catering (restaurants, hotels), entertainment and artistic activities.<\/p>\n Advanced technology and communications countries have seen an increase in the number of workers offering their jobs from home. At the same time, however, the employee who chooses to work from home greatly increases the chances not only of having limited employment rights but also of losing his job in the future.<\/p>\n Another major source of government support for employment, which has played a key role in differentiating and the impact of employment, is on flexible working hours.<\/p>\n The Furlough system implemented in both the US and the UK and in the Anglo-Saxon countries in general has caused freezing or even zero working hours. In contrast, the Kurzarbeit system implemented in Germany and France (EU) has given absolute flexibility in working hours.<\/p>\n The results of these two systems from above are shown by the fact that in the US and the UK, a percentage of 18% of households lost their jobs. While the corresponding percentage in Germany reached only 5%.<\/p>\n Women are more likely to lose their jobs because of the more time they spend with their children if they choose to work from home.<\/p>\n The distribution of income and wealth<\/strong><\/p>\n The index that is widely used and indicates an increase or decrease in income inequality is the Gini coefficient or Gini index. A Gini index zero (0) indicates perfect equality where all values are the same (i.e. when each citizen has the same income).<\/p>\n A Gini index one (1) (i.e. 100%) expresses maximum inequality between values (one person has all the disposable income to consume and the rest of the citizens do not have).<\/p>\n This indicator, after a survey by the IMF, showed that those who suffered the largest loss of income from work in the US were the youngest with lower incomes and wealth, even after deducting taxes and allowances.<\/p>\n The impact on Consumer, Loan and Savings Behavior<\/strong><\/p>\n In the United States, there has been an average reduction in household spending near $1,000 per month during anti-pandemic measures. Apparently, the costs for travel, transportation, entertainment, expenditures for home and clothing purchases respectively have dropped dramatically.<\/p>\n Households cut demand for new loans, unlike businesses. Households in the United States, freezing their spending and accepting reductions in their income from work during their social exclusion, have liquidated money from shares they held and transferred it to their deposits.<\/p>\n Households that are low-income and have no stock to liquidate have suspended or reduced their loan repayments, worsening their creditworthiness by entering a future vicious red loan repayment cycle.<\/p>\n 50% of US households expect to face higher debts by the end of this year, and to cover their declining income from work, they plan overtime at work and postpone their planned retirement.<\/p>\n The first Conclusions<\/strong><\/p>\n The pandemic and its treatment have created new goals:<\/p>\n 1.<\/strong>\u00a0 Further development of technology will give ever-increasing potential working remotely in more and more economic sectors. This dynamic will reduce unemployment and any negative developments in income and consumption to date.<\/p>\n 2.<\/strong>\u00a0 Multinational companies and businesses in general should be involved worldwide, without this meaning that other smaller companies cannot implement it, and adopt full flexibility working hours fluctuation systems.<\/p>\n 3.\u00a0<\/strong> The social protection network for the unemployed and especially the young should be increased unemployed by extending unemployment benefits and increasing the size of these benefits to finance the personal consumption of the unemployed in food, payment of rent, bills, and debts equally.<\/p>\n When we refer to consumption in this case, the definition of consumption after the end of the pandemic includes primarily consumption of food, rent, bill payments, loan repayment, i.e. consumption of so-called non-permanent goods.<\/p>\n We therefore conclude that the resources provided by the governments of the countries should be distributed on the basis of the above data and since the design of effective policy-strategies is now based on indicators that emerge through impartial methodologies and data- \u201cevidence-based policies\/ strategies \u201d.<\/p>\n In this way, the economic inequalities that arose from the pandemic and with such a policy that will convince the economically vulnerable citizens of the government’s intentions will be more successfully addressed.<\/p>\n The success of such a policy is to create access to normalcy for all those affected, restoring a smooth economic behavior without financially straining the weakest economic classes, avoiding governments giving ground to the development of populism and the isolation of their societies and countries.<\/p>\n","protected":false},"excerpt":{"rendered":" The economic crisis caused by the measures to tackle the pandemic in the developed and developing economies of the world have their consequences and implications for the whole microeconomic and macroeconomic life of the societies of the planet. 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