Speculation abounds about the type of economic recovery that will take place as societies adjust to COVID-19. Many descriptive images related to a graph representing the economy are used to try to convey the possibilities.
Some say the recovery will be "V-recovery," meaning that once economic activity resumes without restriction, economic improvement will be rapid. Others talk about a "U-shaped" recovery, with improvement coming more slowly. Both descriptors are overly simplistic and are usually focused on broad statistical considerations, such as growth in gross domestic product, the stock market, and unemployment numbers.
While each of those important metrics are invaluable when trying to paint of picture of overall economic conditions, they are far from the only ones available.
They even each have their own inherent disadvantages and tend to gloss over problems that may have geographic or demographic components. Its been the norm for a while now that those statistical markers, taken as a whole and looking back nearly a decade, look good to the casual observer. Until the onset of the pandemic, the U.S. had low unemployment, a soaring stock market, and just barely sufficient increases in our gross domestic product. Everything is going well then, right?
Not really. People were working, but not being properly compensated. The stock market directly affects such a small sliver of the population that it is not much of a barometer for anything. Gross domestic product is a measurement so generalized that it also masks many of the practical implications of economic conditions on most people's lives. Even if gross domestic product growth could use some improvement, overall, three of the most used economic benchmarks have been pointed in the right direction for years now. Yet there are still people having difficulty finding work after graduating with a college degree. There are seniors working during their "retirement" years, not because they want to, but because they must, to make ends meet.
The pandemic has simultaneously revealed and exacerbated these problems. Suddenly, there seems to be an awareness of the importance of the worker. The unfortunate part of that realization seems to be it is focused on the workers' productivity rather than their health or well-being, even though the two are inextricably linked. There is a lot more talk about the significance of consumers now that they aren't out spending money on the goods produced by the corporations that most recently have been the recipients of the goodwill in the policy-making arena.
How do you get people back to work so they become the consumers whose spending is the largest and most important part of the economy?
How do you get that "V-recovery" rather than that "U-shaped" one - or worse? Beyond what ought to be the simple recognition that actions taken to promote and protect public health are also beneficial to the economy, we need to take this opportunity to understand how vulnerable the average person's financial situation really was, what their struggles have been, and the extent to which their prosperity has been subordinated to the pursuit of good topline numbers like the unemployment rate, quarterly GDP growth, and the NASDAQ.
If we do not start emphasizing statistics more directly related to individuals - like wage growth, purchasing power, and average income - then whatever recovery we have may defy any kind of alphabetic description. But if we take this opportunity to truly examine some of the structural defects of our economy, and act to correct them, the "V-recovery" could become a checkmark-shaped one.
Jason Nichols is District 2 Democratic Party chair, an instructor of political science at Northeastern State University.