Medium Blogger Response
While families have been forced to stay at home due to quarantine, many businesses have suffered because of this. With limited outdoor necessity, there is no need to spend money at any restaurants or outdoor locations. The economy has been struggling to meet demands ends and find safe ways to attract customers again.
Many businesses are trying to find ways to increase their prices to make up for the loss this past year. For those who fall into the low-income family boundaries, this has been a helpful way to avoid spending unnecessary money and receiving funding from the government when taken off from work. Medium Blogger Dwyer Gunn states “Business investment in the United States has fallen dramatically, which economists attribute to an ongoing trade war that escalated again this morning. The yield curve on Treasury bonds recently inverted, which is viewed by many as a strong sign that a recession is coming. Adding to the uneasiness is weakness in the economies of China and Europe, and some troubling geopolitical issues.” (Gunn, 1) With this sudden belief that a recession is coming, although uncertain, is progressively becoming more and more likely with the decrease in the economy.
Incase of a recession, families will react differently based on their existing financial situation. Also affecting manufacturers that provide for borrowers in our economy. The economy has created itself to be a chain where if one business gets affected, the rest also go down. She also mentions, “If we were to tilt toward a recession sooner, that would be more problematic for people at the bottom end of the income distribution.” (Gunn, 3) Typically in these instances, low-income families and minority groups are affected the greatest. It also takes longer for the recovery to make a larger impact on them.
With the pre existing issues regarding low incomes families struggling with finding decent work, a recession would largely demonstrate the country’s inability to handle this. Gunn speaks about, “The country’s debt-to-GDP ratio is at a historic high, and countries with higher debt-to-GDP ratios during recessions struggle to respond effectively to recessions, due largely to politicians’ concerns over debt, and suffer more painful recoveries than nations with less debt.” (Gunn, 3)
By strengthening supporting programs that assist in unemployment and income recovery will allow for a stronger barrier against a possible recession. While the United States does have support for these programs, making them more effective will support an easier transition. By starting with supporting these families with income and decent work issues, we can overall support our country when and if a recession hits. Even those in the top 1% now are not guaranteed wealth forever, especially under the circumstances of a recession.
Works Cited:
Gunn, D. (2019). Even a Brief Recession Would Be Dire for Minority and Low-Income Workers. Gen, (Vol 864), 3.
