Last year’s pandemic brought the world's economic system to the brink of collapse. In May of 2020, the United States Bureau of Labor Statistics reported that 20.5 million jobs were lost and the unemployment rate had jumped to a historic 14.7 percent.
While worse has seemingly passed with CDC easing the mask mandate, it’s safe to say that we are not out of the woods yet. As of writing, the unemployment rate is still 6.1%, which is almost double the pre-pandemic levels.
Many have compared the economic and social devastation caused by the pandemic to the one caused by World War II. The mass unemployment, economic downturn, and humanitarian crisis of this scale haven’t been seen in decades.
The government is intervening to put life back into the economy. However, the sheer magnitude of this crisis calls for citizens and businesses to play their role as well.
Government should support businesses who should then extend courtesy to customers. Finally, the people should back the government, creating a perfect cycle of sorts.
Doing so would foster economic growth, create a healthier and safe environment for workers and make life better once things get back to normal.
Reviving the Economy in a Post-Pandemic World
In response to the pandemic, the US government released a $2.2 trillion stimulus package for large corporations, local governments, and individual citizens.
While the package has softened the blow of the economic turmoil, a long-term renewal requires the government, business and everyday Americans to back each other.
Still, the buck stops with the government with the others coming in later.
Government Need to Back Businesses
Before any other stakeholder, it’s the responsibility of the government to create an atmosphere where businesses can quickly get back on their feet. It can do this by:
1. Protecting the Companies in Crisis
A number of companies have been driven out of business due to the pandemic. Many are still struggling to survive. The CARES Act, passed in March of last year, did help businesses for the time being but it may not be enough.
Businesses with dwindling revenues once again need generous, subsidized loans in order to survive, even though a program like this would bear losses. Small businesses owned by minorities and women who can be viable after the pandemic, in particular, deserve the government’s support.
Meanwhile, bigger companies who are failing should go through the bankruptcy procedure but they too should be assisted with debtor-in-possession financing as the private market may not have the means to support all the viable companies.
Of course, the entire process should have a supreme level of accountability and firms should be required to pay the taxpayers after they have recovered.
2. Invest in the Workforce
Back in the Great Recession, the state workforce agencies made efforts to increase enrollment in government training programs and it did increase by 56 percent in 2009 and again in 2010.
When the government invests in bolstering human capital, people are not only able to hold down their current jobs but also acquire the skills they need to find a new job. By establishing partnerships with educational institutions the program was able to offer training on short notice.
Businesses also need a skilled and trained workforce to grow. Any training programs that produce quality workers would benefit them a great deal.
3. Establish Long-Term Solutions
Another lesson the government can take from history is that there are no quick solutions to a global crisis. The unemployment level skyrocketed in the Great Recession and only dropped to the pre-recession levels in 2015.
A crisis on the scale of a pandemic is also extremely hard to predict. The unemployment rate during the Depression dropped consistently from 1933 to 1937 but increased by five points in 1938.
One of the ways to foster long-term growth is through federally funded R&D. In the United States, the bulk of funding for R&D has come from businesses that in 2017, invested $381 billion (more than three times the government spending). However, business R&D is mostly focused on gaining profit and yielding results in the short run.
The government’s funding is targeted toward keeping the country globally competitive which is extremely important post-pandemic. The business may lack the resources to conduct quality R&D that’s needed in today’s competitive world.
Businesses Need to Reach Out to Customers
Since businesses have been assisted in the pandemic. It’s also their responsibility to put people before profit.
1. Giving Discounts to Customer
Companies often reduce their list prices during an economic downturn. However, giving temporary discounts while maintaining constant list prices has proven to be a better strategy.
Limited time offers can protect the perceived value of goods and services that a company offers. It also eliminates any chance of initiating a price war that can prove to be detrimental for all companies involved in the industry.
It’s much easier for a company to reduce discount promotions when the economy recovers than raising back prices. The latter is something your customers will have a strong objection against.
But even after the pandemic is over, companies shouldn’t ignore discount promotion as an effective marketing tool. The popularity of digital coupons has grown exponentially during the outbreak and it is expected they would continue to get traction post-pandemic. Companies that don’t utilize these tools will be missing out. Firms should also go out of their way to provide discounts to customers who have stuck with them during these testing times.
2. Creating a Safe and Hygienic Environment
The pandemic has put a whole new light on hygiene in retail environments. Whether it’s maintaining a healthy space where customers feel safe and reassured.
The well-being of customers should be the utmost priority for any business, Any measures taken should be communicated at the entrance to the store. The customer’s journey should be guided so there's less chance of building up congestion.
Businesses that directly deal with their clientele need to be socially responsible and demonstrate a commitment to the community by putting their people before revenue.
3. Invest in Online Alternatives
Online shopping was threatening brick-and-mortar retail for quite some time. However, the pandemic completely shifted the balance in favor of eCommerce. Customers now expect businesses to be available online and deliver the products to their doorsteps.
If you run a business that was initially hesitant to invest in online channels but had to reconsider during the outbreak, you would now realize the true importance of online shopping.
Even when everything goes back to normal, firms should continue to expand their reach on the internet. Giving an option that customers found convenient is in many ways the duty of the business.
Consumers Should Help the Government
Faced with economic uncertainty and a risk to their health, consumers had to change their normal spending habits and adapt to the new normal. The government helped them out with stimulus checks, it’s time the citizens returned the favor.
1. Follow Health and Safety Guidelines
If COVID-19 has taught us anything it’s that when it comes to the health and safety of essential workers, the customers have a role to play as well. The internet is flooded with videos of customers who are outright refusing to wear masks or follow any and all precautions.
These individuals are not only putting themselves at risk but threatening the health of everyone else as well.
Going forward, citizens should understand their responsibility towards their country. In return for everything that the government has done for them, citizens should cooperate with the authorities when it comes to matters of public health.
2. Be Responsible With the Money
Due to the recent round of stimulus checks and the economy making a sharp recovery, Americans have as much as $1.7 billion to splurge in what’s called ‘revenge spending’.
While it may be enticing to go on a huge shopping spree after a year of social isolation, I would appeal to people’s better senses and tell them not to go crazy with their money. The pandemic has put a light on the fragility of the world’s economy.
It has shown that nothing is certain and it helps to have some money saved for the rainy days. So be responsible and don’t go overzealous while shopping as the world overcomes a huge economic crisis.
In case of another crisis, the government might not be able to help. This means citizens should put aside money for rainy days.
3. Support Small Businesses
No one felt the brunt of the pandemic more than the small businesses. A lot of promising startups went under due to the economic turmoil caused by the lockdowns. Since these businesses are the backbone of the economy, they deserve all the support they can get.
So as you prepare to responsibly spend in a post-pandemic world, make sure you prioritize small retail outlets and online stores. These companies account for half of employment and therefore are vital for the country. Some of them even miss out on government assistance.
Most large enterprises are already back to their pre-pandemic revenues, it’s the little players that need your help to survive in these times.
Without a doubt, COVID-19 has been one of the greatest challenges that humanity has ever faced. Like always, mankind will persevere and the world will once again function as it did before.
But everything that has transpired in the past year and a half should inspire us to reconsider the way we approach different things. Government should back businesses and these businesses should support customers.
The outbreak should serve as a wake-up call for everyone to be more responsible and courteous. Let’s build a better environment for all in the post-pandemic world.