Pandemics have always been one of the major factors in the world to bring devastation to the masses and change the flow in which the world was proceeding towards the path of development. One such pandemic which shook the world with grief was the pandemic due to H1N1 Influenza Virus in the 1918s, also popularly known as the Spanish Flu. This has been one of the most severe pandemics in world history affecting nearly 500million lives and killing about 50 million people.
The pandemics don’t just affect the health of people but also come with its own cost of affecting the economy to a great extent. When it comes to Influenza in specific, the fact that its spread couldn’t be contained, brought in adverse effects throughout the world, especially the US and Europe. The World War-I acted as a catalyst to worsen the situation during this pandemic.
The Spanish Flu, which hit the world nearly 100 years ago, gives us lessons about the fluctuations in the world economy due to the isolation and the mortalities which happened during that time. Though there had been lack of data for the economists to analyse the same, they came to a conclusion regarding the situation, through the newspapers which were published in the Federal Reserve districts of the US and the respective publishing medium in various regions, to create an analysis of possible economic effects over the world.
Firstly, the Spanish Flu badly affected the wage rate of the labour sector due to various reasons like immobility of labour, their mortalities and the unstable demand due to the uncertainties. So, this led to a decrease in the supply of labour in the manufacturing sector. In turn, this increased the marginal product of labour and a capital incurred per labour which further increased the real wages of the workers. This was one of the main reasons for non-equalization of wages in an open economy like the US in those days. What appeared like high income for each worker was in fact of no use due to the reduction in consumption during that period. Analysing the income growth which few places experienced, it was because of the high mortality rates, which indirectly increased the income of each person thus hiking the per capita income figures.
There was a persistent decline in the economic activities carried out throughout the world due to the Spanish Flu. While the business operating in the entertainment and service sector experienced a great fall in their revenue generated due to the isolation of the masses, the ones working in healthcare witnessed a great hike in the revenues earned.
The research studies of the World Economic Forum show that the countries and cities where the aggression of the virus wasn’t too much, as they had sensed earlier and stopped all sorts of interventions, didn’t experience a sharp economic downturn unlike other countries like the U.S. Since the consumption reduced due to the lockdown and the supply reduced as well, these countries were able to combat the economic disruption created in the world due to the Spanish Flu.
The most affected areas according to WEF are the countries which reacted late and encountered deaths in thousands and millions. These countries saw a relative decline in the manufacturing, employment, output and consumption of durable goods. The regression rate was approximately around 18% in such affected states all over the world.
From these two instances above, we can clearly understand how the fall in demand and supply can affect a country both positively and negatively. The long term effects also had terrible impacts on the future generation in terms of their income generation and the socio-economic status of an individual, and it took more than 2-3 decades to recover because of the World War-II which continued after this pandemic. So the lessons that we have to take from the history of the pandemic of Spanish Flu, to combat the crisis we will face in future due to CoVid-19, is that we have to think ahead of time and create strategies with the help of policymakers and to implement stricter containments.
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Raised in the land of idly,living in the land of kulcha,Meena is currently pursuing B.Com(Hons.) and multi-tasking at SRCC.She has a head for realism,heart full of candour and a hand to pen down her boundless thoughts and another to hold the coffee mug(always).Perky enough,she exerts to explore all her potentiality,ranging from music to research.