Opinion | COVID-19 and capitalism

The economic system we live under has put the inequalities we live with everyday under greater scrutiny than before — and ones we must address before going back to normal.

An+outdoor+seating+area+on+the+Ped+Mall+is+seen+on+Saturday%2C+April+4%2C+2020.+Downtown+was+quiet+during+the+first+weekend+after+spring+break+as+classes+have+been+moved+online+and+the+bars+closed+due+to+coronavirus.+

Katie Goodale

An outdoor seating area on the Ped Mall is seen on Saturday, April 4, 2020. Downtown was quiet during the first weekend after spring break as classes have been moved online and the bars closed due to coronavirus.

Zeina Aboushaar, Opinions Columnist


The pandemic has shed light on the shortcomings of not only political inequalities but the inequalities that are deeply rooted in our economic and social systems. This leads me to the question of, “How will our post pandemic world function? Could the pandemic change capitalism in favor of workers and those in need?”

Capitalism is at the brink of yet another stage of reconstruction and transformation, and the pandemic is only accelerating that process. Policy makers are working toward a reset of capitalism and to make sure no groups of people get left behind in the future.

Former Barack Obama chief of staff Rahm Emanuel stated in a recent speech, “Never let a good crisis go to waste.”

However, few business leaders actually live up to that maxim. Even in the best times and circumstances, leaders have failed to fund new opportunities and staffing.

We should have learned our lesson from the 2008 financial crisis. By creating interconnected financial systems, the government only absorbed small shocks by massive government bailouts, which was systematically fragile and now leaves us in a shaky crisis as we deal with a deadly pandemic.

Talk of change began even before the COVID-19 pandemic, as inequality has risen, which has increased societal critiques of capitalism. Business leaders have also called for movements toward an inclusive, fair, and resilient economic society.

The pandemic exposed the social safety net of America which could in turn lead to policies that are more favorable toward the needs of the workers. The inequalities within the U.S. have only risen, and the unequal opportunities and outcomes through the lens of individuals as workers and consumers have become more clear than ever.

Low-wage workers who earn less than $40,000 per year are the most vulnerable to layoffs, reductions of hours and income, which results from COVID-19, according to Mckinsey Research. The pandemic has left the most vulnerable at the greatest risk of falling into impoverishment — but the system was vulnerable to begin with.

The U.S.’ main response, which is the CARES (Coronavirus Aid, Relief, and Economic Security) Act, gave a short-term solution to a long-term issue. Policymakers should work toward putting in place effective payroll supporters instead of temporary benefits. This left over 30 million workers laid off and caused the U.S. to have one of the highest rates of pandemic-related unemployment, reports foreign affairs.

The government needs to reconsider how to use investments and promote a more equitable distribution of income. Women, minorities, and low-wage workers are disproportionately affected by the pandemic, which brings light to economic inequalities.

These inequalities are both a social and economic issue, which contribute to the hindrance of educational opportunities, and intergenerational mobility, states Mckinsey. This year provides opportunities for businesses and the economy to grow. As the economy continues to heal, a number of unemployed Americans are gradually returning to their jobs. This healing process will take time though.

The pandemic has exposed the deeply rooted flaws in our system, and I hope we take these lessons and implement them in future policies. The economic system that we construct after the pandemic needs to strive for better balance and less shortsighted solutions. This pandemic has taught us that the most unexpected will sneak up on you and affect you in the most brutal ways.

COVID-19 will not be the last pandemic we face, and we’ve already seen a second wave rising as of this month. Businesses must go beyond implementing superficial reforms and instead address the internal dynamic that needs to be knocked down.


Columns reflect the opinions of the authors and are not necessarily those of the Editorial Board, The Daily Iowan, or other organizations in which the author may be involved.


 

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