Capitalism Is In Crisis: Pandemic Could Change It Forever

The Covid19 pandemic has exposed the inequalities in our society and the US economy in particular. Millions of people are out of work, and they are not able to provide basic needs for their families. Women and minority workers are the hardest hit during this situation, and their children are suffering a lot during this pandemic. Most parents from the minority group cannot afford child care and do not have enough technical resources to go in for distance learning.

Renowned economists say that the inequalities were there even before the pandemic, and this has only magnified such things in our society. Capitalism is in crisis as the society has left large groups of people jobless, and they are not in a position to come back without the support of the government. It is now the job of policymakers to fix the issue and ensure that they learn from the crisis. Analysts say that capitalism has faced such situations in the past, also when during the 1950s, the automation concept was a huge threat for jobs, and people feared losing jobs due to the industrial revolution. Similar things were seen during the financial crisis in 2008 when the corporates were exposed, and the situation sent panic waves across the world. Comparing the current pandemic to the Great Depression, economists say that such relief measures are needed in this hour to bring the economy back to track. If the future generations have to lead a sustainable lifestyle, many problems with the current economic system have to be fixed.

In this regard, economists suggest a new social safety net that will provide better relief to workers in the future. The current pandemic has already exposed several cracks in the social safety net of the US, and they need better measures to take care of the needs of workers in the future. The unemployment benefits should be designed in a better way, and affordable housing solutions should be available for the weakest members of the economy. As millions of people have lost jobs across the country during this pandemic, the unemployment benefits provided by the government are nowhere near enough to meet their needs. Most of the money they get is going towards rents, and they are left with nothing to take care of their health and other needs during this situation. Some people who are not able to pay rents on a regular basis are facing evictions, and this is leaving them in a homeless and jobless situation.

The government had to issue a mandate to stop evictions until the end of the year to control the situation. When the pandemic started in the month of March, the evictions due to non-payment of rent were stopped for about six months as the government hoped that the situation would come under control by that time. However, there were no signs of relief, and millions of Americans were on the verge of becoming homeless in July and August. During this situation, they extended the mandate until the end of the year, bringing some respite to people who have lost their jobs. Not only that, most people are not able to get affordable healthcare during this pandemic. As the pandemic has resulted in bringing a lot of changes in the way we work in society, medical spending has increased, and people without proper health cover are under greater risk during this situation. Some of them are under medical debt, and this is badly affecting their credit ratings. All these circumstances have put a magnifying glass on the current economic situation and brought forward the inequalities in the system.

Apart from that, such daily wage workers are also under greater risk of contracting the virus at the workplace as they mostly work in shipping warehouses, meat processing plants or casinos and restaurants. To manage the unemployment benefits for all these workers, the government does not have enough funds, and there is no other option but to increase taxes shortly. However, this should be so high that it can rattle businesses as they are also struggling hard to survive in this pandemic. In this situation, the government has a tightrope to walk, and they will have to take suitable measures in a timely manner to avoid huge problems in the country. The challenges for capitalism comes with globalization, and this has changed the way money moves in the system. The biggest challenge for policymakers is to deal with this situation in a way that it does not affect workers in the long run. Most companies move jobs or use automation if it saves them money, and this trend of capitalism has done a lot of damage for the workers during this situation.

While this has worked in favor of workers in certain sectors, others have suffered a lot as theory is on the wrong side of this trend. This has given rise to a lot of inequality, and it shows that going for automation may not help solve the problem in the long run. As machines continue to take over jobs in most sectors, governments have to consider different welfare measures apart from providing benefits during a crisis. This should also extend to education and healthcare, and most people who have suffered job loss are also suffering from a lack of access to quality education and health care during this pandemic. Capitalism is all about how it treats money and people in general in the country. As government spending has increased a lot during this crisis, the debt is increasing a lot, and this can go out of control in the near future if proper measures are not taken to control the situation. The US federal budget deficit is more than triple what it was during the previous year. As the country cannot continue to live in this situation for a long duration, some measures need to be taken that can change the system to suit the changing needs of society.