Page 10 - Zenith 2023-웹용

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Zenith 2023 ↘ 2) Global Issues 10

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Post-COVID-19 Economics

How will Covid-19 shape our economic future? The IMF estimates that around 28 trillion dollars has
been lost due to the virus. We’ve all heard about how damaging the virus has been on the economy
and people’s livelihoods. The pandemic is by far one of the most severe crisis mankind has ever been
through. Undergoing the pandemic has changed our society forever. Now is the time to develop more
inspiring collective visions of what we want our economies to look like.

A recession typically looks like one of three shapes. The V shape signifies a sharp, brief economic
decline followed by a rebound. The W shape represents a double dip recession. The L is a plunge that
stays down low for a long period of time. Fortunately, the recession following the outbreak of Covid-19
had no resemblance to an L shape dip in economy. Without the level of government spending, the
economy would’ve been much worse than it is now. However, it’s not safe to consider this good news.
The recession doesn’t look like a V or W shape either. Instead, it took the appearance of a K shape
shift in the economy. Imagine a K shape line graph. Get the point? One side of the economy is going
down while the other going upwards, recovering its status quo. This brings about many problems. The
hollowing of the middle class, the concentration of workers in low skilled, low paid jobs and then a
concentration of workers in high skilled, high paid jobs. This trend is accelerating, being the key issue
between the poor and rich after the crisis.

What about the record amounts of spending by governments all around the world? Would the poor
and lower class be able to benefit from this? Not really. Government spending only contributes to
unequal distributions of wealth. Due to the pandemic, more people work from home, leading to
more options for the highly trained and educated. There is also a push to digitalization which again
favors highly educated individuals. From this shift, this change in the economic structure, you can
predict that people who were having a hard time before the pandemic will be in an even harder
situation. Economist Daniel Stelter claims that the main driver of inequality during the past 40 years
was easy credit, more money created, and lower interest rates, all of which were strictly beneficial
to the wealthy. He asserts that to get the economy back on its track, governments and the central