The impact of coronavirus is being felt across the global economy
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It’s been a month since China announced the death of the first victim of the new coronavirus. The outbreak has since infected more than 44,000 people and spread far beyond China.
Federal Reserve Chairman Jay Powell told lawmakers on Capitol Hill this week that he’ll be watching for the virus’s impact on the U.S. economy.
Santosh Rao, head of research at Manhattan Venture Partners, said coronavirus has the potential to disrupt the electronics supply chain.
“It’s everything: consoles, laptops, phones,” he said.
Already, we’ve seen delays in Apple’s iPhone production. TV manufacturers are also expected to slow down their assembly lines.
Some video game releases have been set back due to the outbreak. Analyst Ken Rumph at Jefferies pointed out that China supplies a lot of video game development.
“Intangible things, like doing the artwork, doing the programming that’s required, also have a supply chain,” he said.
Tourism is taking hit as fewer Chinese citizens travel abroad. And some watchmakers have pulled out of a trade show in Basel, Switzerland, because of concerns about the virus. Big automakers like GM and Toyota have yet to restart operations in China.
According to Dale Rogers, a professor of supply chain management at Arizona State University, China has grown more vital to global manufacturing in recent years.
“You know, it’s many times more important to global supply chains than it was at the beginning of the millennium,” he said.
It’s still hard to quantify exactly how much the virus has cost the American economy. Professor Menzie Chinn at the University of Wisconsin said until more recent data are published that “we’ll be relying on anecdotal evidence, informal surveys, and alternative indicators.”
A report out this week from shipping research company Sea Intelligence found that delays related to the coronavirus cost shipping companies $350 million a week in lost volume.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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