Since the beginning of this unprecedented crisis of a pandemic, unemployment rates have increased due to recessions. With the onset of these recessions, businesses are receiving increased costs, falling revenue, and increased debts. Workers have been on a layoff in order to pay the prices of one’s business. These negative effects caused many workers across the industry to increase unemployment rates like crazy! The newly unemployed workers have found it difficult to locate new jobs since this spike.

According to a CNN video, “Unemployed single mom: The economy is not booming for everybody,” a female named Nicole and her family use a 100-year old crawfish bisque recipe in order to survive and provide for their family. Eventually, it had turned out to be a use for a small business as survival helping to pay bills for a year of loss. After the loss of her uncle due to COVID-19, unemployment benefits for Nicole also began to decrease. CNN states that “Louisiana is ending the $300 a week in federal unemployment benefit early at the end of this month.” This has caused her family’s small business to fall on labor shortage and lead to an end. Corresponding to this cause, Nicole replies that despite the labor shortages she has applied to over 150 jobs during the winter. Many people unemployed are trying to do the same thing which delays the responses of the others attempting to do so. This staggering amount of unemployment rate clearly defines the true difficulty of locating a new job.

Video address – https://www.cnn.com/videos/business/2021/07/29/unemployment-women-economy.cnnbusiness/video/playlists/business-economy/

Price Inflation

Correlating back to increased costs, in another video from CNN, Biden’s hometown of Pennsylvania is feeling the impact of inflation. The economic engine is spiking again, causing consumer prices to increase. Consumer prices increased 5.4%, which is one of the highest annual inflation in the last thirteen years. The main cause of inflation is the rise of prices due to an increase in production costs, such as raw materials and wages. Demand for products and services can cause inflation making consumers willing to pay more for the prices. This increase in costs makes it more difficult for businesses to bring revenues in line since they’re not receiving so much. Most businesses were forced to cut this cost in order to remain profitable and attract customers. The value of money shrinkage while jobs were being lost created a correlation between inflation and unemployment. As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases.

How does COVID-19 increase unemployment and decrease economic growth?

As we already know, COVID-19 has created a huge crisis such as the pandemic, forcing us into our homes and having to work remotely. Businesses are forced to shut down due to the enormous numbers of COVID cases as they continue to rise. Certain businesses and local shops such as liquor stores, grocery stores, and office businesses have been shut down because they’re in industries such as accommodations, food service, and educational services. These aspects are affected by changes in customer behavior, especially socially distancing and statutory policy, lowering the capacity of customers to go in. But some other businesses had been potentially shut down because they were already at the stake in a financial crisis.

Turns out that only 35% of small businesses were wealthy at the end of 2019 and others that were less wealthy were forced to shut down because they had been in a revenue shock. Small businesses have a major impact on COVID-19 related challenges. If they’re more affected by COVID-19 they have a higher chance of financial risk than other businesses with a lesser impact of this virus.