What have you always wondered about the economy? Tell Us

What it means to return to a “pre-pandemic” economy

Kimberly Adams Feb 2, 2021
Heard on:
HTML EMBED:
COPY
The economic fallout from the COVID-19 pandemic has been worse for women and people of color, particularly in the service sector. Sarah Silbiger/Getty Image

What it means to return to a “pre-pandemic” economy

Kimberly Adams Feb 2, 2021
Heard on:
The economic fallout from the COVID-19 pandemic has been worse for women and people of color, particularly in the service sector. Sarah Silbiger/Getty Image
HTML EMBED:
COPY

A new report from the Congressional Budget Office predicts gross domestic product could return to pre-pandemic levels as early as mid-2021, even without additional federal aid.

The CBO said the labor market will take longer to reach its pre-pandemic size — probably not until 2024.

But let’s examine that baseline concept: the idea of getting back to the “pre-pandemic” economy. Even if the numbers return to where they once were, the economy is probably going to look very different.

Even though gross domestic product can kind of be a shorthand for how an economy is doing, “GDP growth does not translate into equal growth of earnings and employment,” said Ariane Hegewisch, with the Institute for Women’s Policy Research.

She said the “before times” were kind of a perfect example of this. Unemployment was low, but often significantly higher for some groups, like Black and Latinx workers. Also, “a lot of women worked in jobs where you — even with full-time, year-round — you could not feed yourself, you still needed to have SNAP benefits, particularly if you had kids,” Hegewisch said.

Then came the pandemic, where the economic fallout was worse for women and people of color, particularly in the service sector.

Emily Nix, professor of labor economics at the University of Southern California Marshall School of Business, said all this will shape what the recovery looks like.

“If you come from a wealthier background, you bounce back a lot faster than if you come from a poor background,” she said. “And so another concern we might have is that this pandemic is going to increase income inequality.”

The same logic applies for small businesses.

“I think we need to define what is normal,” said Charisse Conanan Johnson, managing partner at the advisory firm Next Street.

“How are we going to make sure that the communities and small businesses that have been systemically left back pre-pandemic are getting the systemic changes I think that we need to make sure that they’re successful,” she said.

Conanan Johnson said for those communities, returning to pre-pandemic economic conditions might not be enough for an economic recovery.

News and information you need, from a source you trust.

In a world where it’s easier to find disinformation than real information, trustworthy journalism is critical to our democracy and our everyday lives. And you rely on Marketplace to be that objective, credible source, each and every day.

This vital work isn’t possible without you. Marketplace is sustained by our community of Investors—listeners, readers, and donors like you who believe that a free press is essential – and worth supporting.

Stand up for independent news—become a Marketplace Investor today with a donation in any amount.