News
Socio-Economic Impacts of COVID-19
Socio-Economic Impacts of COVID-19
Posted by: Alexandria Beatty
Model United Nations, NMSU
May 5,2020
The pandemic of COVID-19 has created worldwide socio-economic impacts causing the United Nations (UN) to respond on March 31, 2020. “Globally the speed and scale of the outbreak, the severity of cases, and the economic disruption is reported as a shared responsibility,” stated by Secretary- General Antonio Guterres. The UN responded by providing the following three impact measures:
Global actions must include a stimulus package reaching double-digit percentage points of the world’s GDP, with explicit actions to boost the economies of developing countries.
Regional mobilization must examine impacts, monetary coordination, fiscal and social measures, while engaging with private financial sector to support businesses and addressing structural challenges.
National solidarity needs to prioritize social cohesion and provide fiscal stimulus for the most vulnerable along with support to small- and medium-sized enterprises, decent work and education. (“UN launches COVID-19 plan,” 2020)
Internationally, the response to these measures has been diverse and inadequate to stabilize the economy or the people. Spain, a hot spot for COVID -19, passed a €200 billion aid package of economic and social measures to assist those affected. The measures include suspension of all evictions for six months, and an offer of zero interest loans to help those whom have become unemployed. Spain also declared a six-month holiday on social security payments for small businesses and the self – employed. Aiding the people further, Spain stopped utility companies from cutting clients off.
Sweden created an emergency package of $31 billion dollars to cover sick leave costs, to retain the employed pay to 90% allowing employees to cut pay in half temporarily. The measures that are included will allow employees to take sick leave for 2 months and the cost will be divided between employer and the state. Sweden also allowed employers to defer Social Security payments and tax on salaries up to a year. This helps the businesses remain able to pay salaries without the extra stress. The $31 billion will also go to the Public Health Agency of Sweden, the National Board of Health and Welfare, and the Swedish Medical Products Agency to purchase medical supplies such as protective equipment and coronavirus kits. Sweden has not closed down businesses so there are no measures in place to aid homeowners but to help businesses support the employees.
Canada passed an aid package of C$52 billion on March 25 to financially support individuals and businesses. Canada also passed a C$55 billion in tax deferrals. Individual measures added to the aid package include a boost to Canada Child Benefit, money for those out of work and a six-month freeze on student loans.
The United States passed a $2 trillion Coronavirus Aid Package (CARES Act). The aid package provides an estimated $300 billion to individuals in cash payments from $1200 per adult with an additional $500 per child up to three children. Unemployment benefits have a $260 billion cost and this amount is changing due to the number of unemployment claims filed. The legislation will add 13 weeks of unemployment insurance, allowing for extensions depending on state. The package also requires private insurance companies to cover all COVID-19 tests and treatments if needed. Emergency grants are provided for businesses and loan forgiveness for small businesses. The United States included $100 billion to go to hospitals for responding to the virus as well as $16 billion to Strategic National Stockpile to increase equipment need and employment, as well as developing a vaccine and faster diagnostics. Globally, the need for financial help and economic stability is a necessity to keep people alive and afloat.
Considering, the size of each package and the population of each country here is what the amount equals out per person:
Spain = $461
Sweden= $3100
Canada= $976
United States= $6079
The amount is intriguing. However, we know that all that money is not going to the person but to the businesses, hospitals, unemployment, and other areas in need. The perspective on the different amounts gives us an idea regarding how much each country has spent to help their economy. Globally, countries are seeing a drop in revenue during the Coronavirus closure. The debt in each county is rising as the world moves into what can only be seen as another great recession.
Will we be able to dig ourselves out of the ever-growing financial debt locally and globally?
