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.