Billions of dollars lost. Unemployment rates at a record high. Cities once filled with activity now still and empty as stores and businesses shut down. In an effort to slow the spread of COVID-19, businesses are closing and workers are staying at home, causing global economic activity to crash and affecting millions of people around the world. 

On March 9, the global stock market began to plummet as investors feared the COVID-19 virus would cause an economic decline. According to BBC, stock markets are “where shares in companies are bought and sold, [and] can affect many investments in pensions or individual savings accounts.” 

As of April 17, Nikkei, Dow Jones and FTSE 100, three major indexes that represent the stock markets of Japan, U.S. and U.K., reported declines of 22.2%, 24.1% and 28.8% in the stock exchanges, respectively. To put this into perspective, prices on shares of stock go up and down by a single percentage point on a typical day. 

For the U.S., economists say the near future is grim. According to CNN, Goldman Sachs economists predict a negative 34% gross domestic product, the sum of prices of all goods and services, growth in the second quarter and a 15% jobless rate by the middle of the year. The Associated Press reported on April 2 that 6.6 million, on top of the previous week’s 3.3 million, Americans have applied for unemployment benefits as businesses begin laying off employees.

“My company has put into effect a systemwide 70% pullback. They have asked any employees who can afford to take temporary unpaid leaves from work to do so in order to aid the company in saving money and avoiding involuntary furloughs/layoffs of any employees,” Delta flight attendant Stephanie Kim wrote to the Talon. 

The travel industry is one of the most impacted industries due to COVID-19. The restriction of travel for business and leisure, consequently diminishing tourism revenue, will cause countries to lose billions of dollars. According to the U.S. Travel Association, the U.S. travel industry will lose $400 billion due to slumps in travel rates, translating to a $910 billion loss in total economic output — “7 times the impact of 9/11.”

“I had a flight the other day with only three passengers on it — we were on an aircraft that can seat up to 199 people,” Kim said. “Every empty seat is worth hundreds to thousands in profit loss.”

While people who work for airline companies, hotels and other businesses related to travel are directly affected, the restriction of travel has indirect economic consequences for other jobs as well. In addition to the estimated 4.6 million travel jobs at risk, shutting down traveling could pose a threat to 15.8 million American jobs. According to Forbes, this means “employment for one in every 10 Americans” rely on the travel industry, and therefore restricting travel could contribute to the growing unemployment rate during this time.

In an attempt to mitigate the negative economic impacts of the pandemic, President Donald Trump signed the CARES Act on March 27. This act, a massive bi-partisan effort, is a package of $2.2 trillion distributed to individuals, businesses and state and local governments, tax relief for eligible businesses and improvements in treatments for affected patients. It is the “largest emergency appropriations package in United States history,” according to the Library of Congress.

Similar to the U.S., the European Commission proposed a €100 billion or $109 billion relief initiative on April 2. The money will be given to companies to encourage them from laying off employees.

The purchasing manager’s index, or the PMI, is an index to measure economic trends. In the eurozone, the PMI dropped from 49.2 points in February to 44.8 points in March for manufacturing. Investopedia states that any number below 50 indicates that businesses have seen a decline in economic activity. Outside of the eurozone, U.K.’s PMI showed numbers dropping from 51.7 in February to 47.8 in March.

“In this coronavirus crisis, only the strongest of responses will do,” Commission President Ursula von der Leyen said in a statement, according to CNN. “Every available euro in the EU budget will be redirected to address it.”

As governments and major companies shut down manufacturing sites and limit their employees’ travel, production rates are significantly affected in Asia as well.

China, who makes up 1/3 of manufacturing globally and is the world’s largest exporter of goods, issued a lockdown for the Hubei province, as well as restricting business and travel across the country. As a result, Chinese industrial production fell by 13.5% in January and February, and unemployment rates plunged by 6.2% in February. On March 26, China’s foreign ministry took further measures to halt the virus’s spread and declared that foreigners will no longer be able to enter the country.

The World Bank predicts that the growth of Asian economies will slow to 2.1% from an estimated 5.8% in 2019. In South Korea, where there have been 10,661 confirmed cases of COVID-19 as of April 19, the auto industry is largely impacted as restrictions due to the pandemic create supply chain disruptions in China and spreads to the industrial regions Daegu and North Gyeongsang.

“In terms of production, many of the factories including ones in the U.S., Russia, Europe and India have been temporarily closed,” Jaeho Lee wrote to the Talon. Lee is Deputy General Manager in the marketing department of Hyundai, an automotive company based in South Korea. “Factories in China resumed production after the COVID-19 issue in China recently reached a period of stabilization.”

Economic difficulties also stem from global quarantine measures, in which many people are advised to practice social distancing and avoid going outside. For the auto industry, this means customers cannot visit dealerships if owners are not already restricted from opening their stores for sales.

“Regarding marketing activities, as it is nearly impossible for the company to proceed with any offline events, our company is also currently focused on expanding digital/SNS services for customers rather than events requiring face to face interaction,” Lee wrote.

As the world continues to battle COVID-19, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, advises to stay updated on the issue and practice safety measures for both health and economic purposes.

“There is a discussion and a delicate balance about what’s the overall impact of shutting everything down completely for an indefinite period of time,” Fauci said to Science Magazine. “If you knock down the economy completely and disrupt infrastructure, you may be causing health issues, unintended consequences, for people who need to be able to get to places and can’t. You do the best you can.”