Rating the Post-COVID Economy

Art by Angel Du.

An inundation of sourdough, celebrities singing Imagine, and Thursday nights ending with a seven-person booking at PJ O’Reilly’s. Two years ago, my friend and colleague Marlow Meares wrote the Post-Covid Economy for Woroni, a thought experiment on how the 2020 COVID recession would affect the Australian economy. Two years on, I see how well his prediction matches reality. Some things came true, some didn’t, and some are still to be determined.

 

Firstly, the title of Marlow’s piece had an unexpected mistake. In August 2020, we had an idea of there being two clearly defined periods: the pandemic and post-pandemic periods. The vaccine would arrive, and COVID-19 would become a near-eradicated disease, like Polio. Variants of the virus, named after the Greek alphabet, blurred this distinction. With the COVID-19 disaster payments ending on 30 September 2021 and the end of widespread lockdowns, Australia’s current economy is structurally running the same. Yet, any small business owner or first responder would tell you otherwise. 2.25 percent of all workers are absent from work because of illness – substantially higher than the 1.5 percent five-year average. This means business and services, essential services, are expected to produce business-as-usual results with a depleted workforce. Go figure.

 

Work absentees reflect a broader picture of how unprecedented Australia’s low unemployment rate truly is. Far from the 10 percent unemployment Marlow predicted would occur due to Australia’s “worst recession since the Great Depression,” COVID-19-era unemployment peaked at 6.46 percent in 2020. As of June 2022, the unemployment rate is a mere 3.5 percent, the lowest since 1974. Yet the flip side of low unemployment is low wages. In 2020 Marlow implored that the wage stagnation Australia experienced pre-COVID-19 needed to be addressed. Now, the minimum wage maintaining level with the rising cost of living is a political issue rather than a given. The government spending which alleviated the recession during the peak of COVID-19 – like the gigantic Jobseeker and Jobkeeper payments – has pushed inflation to new heights. As for the other causes of inflation – even Marlow could not have predicted a war in Ukraine.

 

Marlow hoped for an economy that served equality and the climate – and here is when the Australian economy finds itself on the precipice. He argued that Australia would have to accept regular budget debts to do this. As national debt threatens to zoom past the trillion dollar figure (as Marlow predicted), accepting government debt has become less of a choice and more of an inevitability. While we will not know for sure until the October federal budget, the Labor government promised, in the most recent election, more money for aged care and childcare. The previous Coalition government introduced an increase in parental leave of up to 20 weeks for both parents. This ought to decrease the effects of maternal leave on the gender pay gap (although this would only be a start).

 

It also looks like Australia will have an emission reduction target rate of at least 43 percent by 2030, enshrined in law. In other words, the choices the federal government makes in October will determine how much they are willing to spend on an inclusive and sustainable economy. We will have to wait.

 

This murky ‘post’-COVID-19 Australian economy is filled with uncertainties and differing potentials. What is to come of the ‘care economy’ when aged care and hospitals are understaffed and in crisis remains to be seen. It may be too early to say whether Marlow’s hopes for the post-COVID-19 economy will come true. If COVID-19 taught Australia one lesson, it is that when all else fails, prosperity can be found in a fresh slice of sourdough bread.

 

Think your name would look good in print? Woroni is always open for submissions. Email write@woroni.com.au with a pitch or draft. You can find more info on submitting here.

 

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