Since World War II, there has not been an economic downturn of such scope and scale. The COVID-19 pandemic has plunged the economy of the world into deep contraction. Nobody expected this. Even leaders are uncertain about what will work and how. As the policymakers wrestle with the economic and humanitarian impacts of COVID-19, they are using a battery of measures and interventions to support the crippling businesses and individuals.
I was recently reading this interview of Diana Jiang, a candidate running for Irvine City Council elections in 2020. I was drawn to her strategies to help recover from this crisis involving both public health and economic challenges. I feel this could be the time where we could witness some great influential leaders take upon the baton to change the policies and plan a way out of this suppressed financial climate.
To prepare ourselves for the revival, it is important to understand the landscape of economic interventions by leaders of our past. In this article, I will highlight some lessons that the policymakers could learn from the past to overcome this crisis. Three prominent things that emerged when I looked at some successful government responses to previous epidemics, environmental crisis, and economic downturns.
People Are The Priority
The first thing that they always did was to prioritize human welfare and human capital. Essentially, recovering from any situation depends on protecting the health of people. It also rests on pushing human capital which can be done by enabling people to retain employment or help them learn a new skill to find another job. For instance, during the Great Recession, the state workforce agencies worked to increase enrollment in government training programs. In 2009 it increased by 56 percent.
Accelerated Pre Existing Trends
During a crisis, the people who are financially weak are the most vulnerable. Because any calamity tends to accelerate already existing financial trends, the response by the government is effective only when they take that into account and plan a policy accordingly. Let’s again refer to the Great Recession. During that crisis, the bottom 10 percent of earning people suffered a loss of income of about two and a half folds worse than the richest 10 percent. The disadvantage can actually go wider than just economic disparity. So, I believe the policymakers who are now responsible for neutralizing and improving the situation must understand the existing trends and work accordingly.
History suggests that coming out of a crisis is not something of haste. Recovery often takes time and the leaders often look to pace their policies over years. It took New York almost five years to recover from the worst terrorist attack they have ever witnessed. I feel the most effective planning to recover the economy for the long term often starts early.
How Past Can Help Irvine Recover Economy
While every crisis and calamity has its own challenges, policymakers can learn a lot about approaching a situation like this with long-term solutions and resilience.
Bolstering Employment: Connecting unemployed people with talent seeking industries should be on the top of any priority list when recovering from an economic meltdown. Irvine can create a job portal that connects unemployed to short-handed businesses such as retail and grocery stores.
Small Businesses: For any economy to recover, it is important to grow small-time local businesses. Essentially, they are the backbone of the economy. This can be done by tapping into help from existing big institutions.
Relief Efforts: Tax relief and benefits could prove to be very effective for people affected by the hit. Although it is in the hand of the state, as policymakers of a city council, leaders could address this and restore the public’s confidence about their safety.
Expanding Innovative Ecosystems: Building and expanding innovative ecosystems could be key to the revival of the economy in Irvine. Those sitting on policy making chairs can try to replenish the financial growth by encouraging private and public sector innovation through a supportive ecosystem. This could be done through efforts such as increasing investment in challenge grants, competitions, education, R&D, and open networks to attract talent to Irvine.
While most of us decided to take upon a fitness regime during the COVID-19 outbreak, I decided to read about how decisions by the leaders of our past during a crisis. In all seriousness, these decisions have played an essential role not only in the survival of cities, states, and regions but also whether they were able to emerge from it stronger. So, the question is will Irvine be known for its unparalleled business environment? Will Irvine attract new talent from other cities? Will Irvine provide an environment for small and medium-sized businesses to expand and digitize? The answer to these questions will determine what will be the new normal.