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The virus that shut down the world: Economic meltdown – UN News

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The early warning signs


UNCTAD/Jan Hoffmann

UNCTAD has estimated global economic losses of $1 trillion in 2020.

Even before the virus had officially been declared a pandemic, it was clear that the shutdowns, travel bans and other restrictions on movement would be serious.

Back in March, the UN trade agency, UNCTAD, was forecasting that around $1 trillion would be lost to the global economy over the year, and the International Monetary Fund (IMF) and World Bank arranged for a multi-billion dollar injection of UN-back global funds to be made available to low-income and emerging markets.

Despite this assistance, the outlook, especially for some six billion people living in developing countries, was grim, with UNCTAD warning of a “looming financial tsunami.

Young and lower-skilled workers bear the brunt


ILO/Feri Latief

A woman follows health protocols by wearing a face mask at work in a restaurant in Indonesia.

In May, the UN Department of Economic and Social Affairs (DESA) forecast that the global economy would shrink by almost 3.2 per cent in 2020, equivalent to some

$8.5 trillion in losses, and the International Labour Organisation (ILO) warned that nearly half of the global workforce could see their livelihoods destroyed due to the continued decline in working hours brought on by lockdowns. The following month, the World Bank confirmed that the world was in the middle of the worst recession since World War Two.

Lower-skilled workers were hard hit, in wealthier as well as developing economies. Mass lay-offs took place in the service sector, particularly industries that involve personal interactions such as tourism, retail, leisure and hospitality, recreation and transportation services. The ILO followed up in December, with a report showing that wage increases are slowing, or even reversing, hitting women workers and the low-paid hardest: this trend is expected to continue even with the rollout of vaccines. Young people were also particularly affected: more than one in six had stopped working by May and those who were still in work saw their hours cut by almost 23 per cent.

Is universal basic income the answer?


World Bank/Jonathan Ernst

Providing a universal basic income could be a central part of fiscal stimulus packages.

Confronted by this flood of negative data, the idea of universal basic income (where governments give a minimum sum of money to all citizens, regardless of work status or income) began to gain traction within the UN.

In May, A report by the Economic Commission for Latin America and the Caribbean (ECLAC) proposed that governments ensure immediate temporary cash transfers to help millions of people struggling to meet basic needs, as the massive fallout from COVID-19 rippled across the region’s economies.

When UN News interviewed a senior official at UNDP, Kanni Wignaraja, she said that the pandemic had upended economies so severely, that bolder ideas were now needed.

“At the UN, we’re saying that, if there isn’t a minimum income floor to fall back on when this kind of massive shock hits, people literally have no options. Without the means to sustain themselves, they are far more likely to succumb to hunger or other diseases, well before COVID-19 gets to them. This is why, for UNDP, it is so essential to bring back a conversation about universal basic income, and to make it a central part of the fiscal stimulus packages that countries are planning for”.

 By Summer, a UN Development Programme (UNDP) report was recommending a temporary universal basic income, for the world’s poorest people, as a way to slow the surge in COVID-19 and enable close to three billion people to stay at home.  The study showed that workers who lack any kind of social safety net have no choice but to venture outdoors, putting themselves and their families at risk. 

Contacted in December by UN News, UNDP elaborated on some of the way that temporary basic income has helped to slow the spread of COVID-19, and provide a safety net for people in need.

For example, this year saw several UN agencies working together to help the Government of Cambodia roll out their first digital cash transfer system for people living below the poverty line, a system which is, says UNDP, now the backbone of the Government’s COVID-19 cash transfer program for the poor. The Governments of Bangladesh, Indonesia, Malaysia, the Philippines, Viet Nam and other countries have introduced similar cash transfer systems.

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RELEASE: 10 Recommendations That Will Improve Maine's Economy and Democracy – Center For American Progress

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RELEASE: 10 Recommendations That Will Improve Maine’s Economy and Democracy – Center for American Progress


Washington, D.C. — In Maine, more than 12 percent of residents live below the poverty line, and more than 1 in 3 families do not earn enough to pay for basic expenses. A new report from the Center for American Progress explains how strengthening worker power is key to reducing poverty and economic inequality in the state and how it would help to raise wages, close racial and gender pay gaps, and make the state’s democracy more responsive to the public.

While there are many steps the state could take to address these issues—including improving workplace health and safety standards, enforcing anti-discrimination rules, and reducing the influence of money in politics—ensuring that workers have a collective voice is crucial. Union membership in Maine has plummeted over the past 50 years. Today, only 5.5 percent of private sector workers belong to a union, despite the fact that research shows that unions help Mainers earn higher wages and benefits. Declining union membership has been accompanied by rising income equality in the state.

The report provides a blueprint for Maine policymakers to build worker power in their state, including these 10 policy recommendations:

  1. Provide workers a voice in setting and enforcing public health standards.
  2. Ensure that government spending creates good jobs.
  3. Improve workforce training by more fully involving worker organizations.
  4. Create workers’ boards to provide workers a voice in determining minimum industrywide pay and benefits.
  5. Partner with worker organizations and provide workers with a private right to action to ensure that workplace standards are enforced.
  6. Involve worker organizations in unemployment insurance modernization.
  7. Strengthen public sector unions.
  8. Use business permitting and licensing standards to support high-road businesses.
  9. Close loopholes that allow employers to skirt legal responsibilities and undermine worker power.
  10. Implement broad anti-retaliation protections.

“The COVID-19 crisis has exacerbated inequalities and shone a light on unsafe conditions in many Maine workplaces,” said David Madland, senior fellow at CAP and co-author of the report. “Weak worker protections and low rates of union membership have made it harder for workers to speak out and ensure that they are compensated fairly for their work. State policymakers can ensure a safer and more equitable economy for all Mainers by enacting reforms that strengthen workers’ voices on the job and in the economy.”

Read the report: “Strategies To Build Worker Power in Maine: 10 Recommendations That Will Improve Maine’s Economy and Democracy” by David Madland and Malkie Wall

For more information or to speak with an expert, contact Julia Cusick at .


The Center for American Progress is an independent nonpartisan
policy institute that is dedicated to improving the lives of all
Americans, through bold, progressive ideas, as well as strong
leadership and concerted action. Our aim is not just to change
the conversation, but to change the country.

© 2021 – Center for American Progress

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Biden's rescue plan will give U.S. economy significant boost: Reuters poll – The Telegram

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By Indradip Ghosh and Richa Rebello

BENGALURU (Reuters) – U.S. President Joe Biden’s proposed fiscal package will boost the coronavirus-hit economy significantly, according to a majority of economists in a Reuters poll, and they expect it to return to its pre-COVID-19 size within a year.

Biden has outlined a $1.9 trillion stimulus package proposal to jump-start the world’s largest economy, which has been at the epicenter of the COVID-19 pandemic having lost over 400,000 lives, fueling optimism and sending Wall Street stocks to record highs on Thursday.

Hopes for an upswing in U.S. economic growth, helped by the huge stimulus plan, was reflected in the Jan. 19-22 Reuters poll of more 100 economists.

In response to an additional question, over 90%, or 42 of 46 economists, said the planned fiscal stimulus would boost the economy significantly.

“There are crosswinds to begin 2021 as fiscal stimulus helps to offset the virus and targeted lockdowns. The vaccine rollout will neutralize the latter over the course of the year,” said Michelle Meyer, U.S. economist at Bank of America Securities.

“And upside risks to our…growth forecast are building if the Democrat-controlled government can pass additional stimulus. The high level of virus cases is extremely disheartening but the more that the virus weighs on growth, the more likely that stimulus will be passed.”

For a Reuters poll graphic on the U.S. economic outlook:

https://fingfx.thomsonreuters.com/gfx/polling/oakveynqovr/Reuters%20Poll%20-%20U.S.%20economy%20outlook.png

The U.S. economy, which recovered at an annualized pace of 33.4% in the third quarter last year from a record slump of 31.4% in the second, grew 4.4% in the final three months of the year, the poll suggested.

Growth was expected to slow to 2.3% in the current quarter – marking the weakest prediction for the period since a poll in February 2020 – amid renewed restrictions.

But it was then expected to accelerate to 4.3%, 5.1%, 4.0% in the subsequent three quarters, a solid upgrade from 3.8%, 3.9% and 3.4% predicted for those periods last month.

On an annual basis, the economy – after likely contracting 3.5% last year – was expected to grow 4.0% this year and 3.3% in 2022, an upgrade from last month.

For a graphic on Reuters Poll – U.S. economy and Fed monetary policy – January 2021:

https://fingfx.thomsonreuters.com/gfx/polling/azgpoljbkvd/U.S.%20economy.PNG

Nearly 90%, or 49 of 56 economists, who expressed a view said that the U.S. economy would reach its pre-COVID-19 levels within a year, including 16 who expected it to do so within six months.

“Even without the stimulus package, we had already thought the economy would get back to pre-COVID levels by the middle of this year,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets.

“With the new stimulus package there will be more direct money in people’s pockets, easily boosting the economy, provided a vaccine rollout progresses in a constructive manner.”

But unemployment was not predicted to fall below its pre-pandemic levels of around 3.5% until 2024 at least.

When asked what was more likely for inflation this year, only one said it would ease. The other 40 economists were almost evenly split between “a significant pickup” and price pressures remaining “about the same as last year.”

Still, the core Personal Consumption Expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – was forecast to average below the target of 2% on an annual basis until 2024 at least, prompting the central bank to keep interest rates unchanged near zero over the forecast horizon.

“I don’t think it will be an increase in underlying (inflation) trend, it is sort of a rebound in prices that have been depressed during the pandemic,” said Scott Brown, chief economist at Raymond James.

(For other stories from the Reuters global long-term economic outlook polls package:)

(Reporting by Indradip Ghosh and Richa Rebello; Additional reporting by Manjul Paul; Polling by Mumal Rathore; Editing by Rahul Karunakar and Hugh Lawson)

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How Biden's Pandemic Plan Could Affect The Economy – NPR

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President Biden has outlined an aggressive plan to gain control over the coronavirus pandemic, which continues to weigh heavily on the U.S. economy.

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