Recession: Something youths must understand
FULL DISCLOSURE - Fidel Abalos (The Freeman) - July 4, 2020 - 12:00am

All eyes in the country today are on Cebu City, the only local government unit (LGU) in the country under enhanced community quarantine (ECQ). As such, all frontliners are leaving their homes and taking so much risk just so that the rest of us maybe safe.

In taking these risks, in return, they are only asking us two things. First and foremost, to stay home.  If it can’t be avoided because of some necessities, they are simply asking us to observe physical distancing rules. 

However, it is quite revolting that some of us are just so absurd and ridiculous.   Gallingly, while even the churches are asking the faithful to stay home and simply tune-in to online masses or religious services, a “dance group” in Basak, San Nicolas held its own “Sinulog” Festival.  Irritably too, while gatherings in whatever kind are prohibited, folks from Calamba were disco dancing, allegedly, as part of their fiesta celebrations.

So irresponsible. Yet we can only surmise that because they are mostly teenagers and their age group isn’t at so much risk as statistics would show, they have become so daring.  Unmindful of the fact that while doing these foolishness, there shall be spectators who could be vulnerable. 

So oblivious too, of the fact, that after they are through with their shenanigans, they still have to go home and be with their families. Some of whom are probably among the most prone to infection by this dreaded coronavirus disease 2019 (COVID-19).

Now, if these kids are really that stubborn and have strongly believed that they can be spared by this virus, here is something that they, surely, won’t be spared. One day, they will be waking up to harsh realities that as COVID-19 stays longer, our economy will suffer very badly.  If they believed that the government can save them through dole outs, they’d better think twice. 

History tells us that in a global recession, unemployment will be the worst consequence.  It seems, in fact, that it happens every decade in modern times. This COVID-19 pandemic, included. 

In modern times (after WWII), the first to hit us was the Oil Crisis Recession in November 1973-March 1975 in the decade 1970s. Lasting 16 months, it was brought about by the quadrupling of oil prices. This led to stagflation (a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high).

In decade 1980s, we had the Iran/Energy Crisis Recession (July 1981-November 1982).  It was caused by the regime change in Iran, the world’s fourth-largest producer of oil then. Iran’s production cuts forced oil prices to go up.  Consequently, both inflation and unemployment rates went up. 

In decade 1990s, we had the Gulf War Recession (July 1990-March 1991). Lasting 13 months, this resulted in the spike in oil prices as Iraq invaded Kuwait. As a result, there was a huge decline in manufacturing activities. Thus, unemployment rate rose.

In decade 2000s, the Great Recession (December 2007-June 2009) ensued. It was caused by the housing bubble in the USA which resulted to record foreclosures. Then, a financial crisis flung markets worldwide into a nosedive. This was also the time that oil prices rose to record highs in mid-2008 and then crashed towards the end of the year. As both manufacturing activities and demands for consumer goods in the USA slowed down, unemployment rate throughout the world skyrocketed.

Then, today, we are in the midst of the COVID-19 pandemic induced recession. Though the effects are felt in the 2020s, remember that it started in 2019 or in the decade 2010s. The extent is still immeasurable at this point in time.  However, the agonies are already well felt.

Whether we, Filipinos, go or not on that empirical belief that it is part of a per decade business cycle, we don’t have to deal with that for the time being. Remember, this is the first time that the world is trying to deal with a pandemic-induced recession. Therefore, everything is uncertain. What is certain though is, just like the other global recessions, some businesses will fold up while the rest shall operate way below their capacities. So that, unemployment rate will surely shoot up. 

Consequently, our country’s revenue (taxes) generation will be way off the desired target.  Hence, it will not be able to fund even the most basic needs of our countrymen. 

Worse, as this pandemic drags, more and more businesses will definitely close. Simply put, in the country alone, there could be thousands or millions more who will be rendered jobless. Some of them (rendered jobless) could be these kids’ parents, the breadwinners. If that happens, not only will these kids will be out of school, even their next meals will be a huge problem.

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