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US start-ups grow amidst the Covid crisis – leading macroeconomic influencers - pharmaceutical-technology.com

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In the US entrepreneurship has expanded during the Covid pandemic, with retail and warehouse businesses reporting phenomenal growth.

Adam Posen

Adam Posen, an economist and President of the Peterson Institute for International Economics, retweeted an article on the Covid recession being the first in the last 50 years where the supply of money is larger than before the crisis. According to Simeon Djankov, a Bulgarian economist, Americans started 4.4 million businesses in 2020, a 24% increase from the pre-pandemic year, the biggest increase on record.

Most of the growth during the coronavirus pandemic appeared to be in the retail and warehouse businesses, perhaps indicating a boom in the ecommerce industry. The US economy had been enduring decades of slump in business formation before the Covid-19 outbreak. However, Peterson Institute for International Economics (PIIE) researchers found that 2020 was a year of growth for businesses and a surge in start-ups in the US.

The 2020 boom stands in direct contrast to the last recession, when start-up activity fell, partly because the financial crisis made it difficult for businesses to get the required funding. The US has also coped better than other rich countries, where start-up activity either fell or rose only slightly in 2020. Experts claim that this could have been the result of the injection of trillions of dollars to support households and businesses.

Some businesses even sprang up because of side projects started by people stuck at home during the lockdowns in order to thrive. The Census Bureau further revealed that start-up hiring rose by 15.5% during the pandemic.

Teresa Ghilarducci

Teresa Ghilarducci, a labour economist, shared an article on how in the last six months the Covid-induced recession caused approximately 1.1 million older workers, aged 55 and above) to give up looking for a job, or leave the labour force. Citing Teresa’s report on the participation of the older workers in the labour force, author and columnist Kerry Hannon’s article details racial disparities and tips for Covid job hunting for workers aged above 50 years of age.

Teresa’s report highlights the need for aggressive anti-age discrimination enforcement and expanded unemployment benefits to facilitate older workers’ return to jobs during the Covid crisis. She also stressed lowering the Medicare eligibility age to 50 years and make the programme ‘first payer’ to lower the cost of hiring older workers.

Analysis further revealed that the decline in older workers’ unemployment rate in January, was a result of unemployed workers leaving the labour force rather than finding jobs. In addition, the fall in employment for Asian, Black, and Hispanic older workers was more than double that of white older workers during the last few months of the pandemic since October 2020.

Ghilarducci believes that the pandemic recession is a game-changer for older workers, especially for older people of colour. She argues that they have been forced out of the labour market because of the Covid crisis, and it is likely they will never recover from it.

Konstantina Beleli

Konstantina Beleli, an economist, re-tweeted an article on how Amazon UK sales rose 51% to approximately $27.94bn during the coronavirus pandemic, but agency workers state that it was earned on the back of ‘slave labour’. Workers had been left to struggle and work on zero-hour contracts, with abrupt end in shifts and workers left unpaid.

According to reports, Amazon used 25,000 seasonal workers during the coronavirus pandemic, and broke its own promises on zero-hour contracts. For example, agency workers claiming that they were paid far less than promised for 20 hours of work.

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US start-ups grow amidst the Covid crisis – leading macroeconomic influencers - pharmaceutical-technology.com
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