It’s not all doom and gloom! Well… it is mostly. But with all the negative economic news in the last few weeks, here is a more positive story to tell.
With the coronavirus now a global pandemic, countries all over the world have gone into lockdown, with schools closed, businesses shut, and millions of people working from home. With people staying indoors, this has caused a huge increase in demand for online shopping platforms.
In China, a country of over a billion people, the last seven weeks of quarantine has not actually been that difficult, at least in terms of doing your shopping. In recent years, the country has invested heavily in internet technology, and now boasts one of the most advanced online shopping and delivery networks in the world.
The two largest platforms, TaoBao (淘宝) and JingDong (京东), have had a major role to play in keeping people content in their homes, bringing them new toys to play with and food for their bellies. With warehouses all over the country, and hundreds of thousands of delivery drivers scootering around cities, both companies pride themselves on the speed at which goods arrive at your door.
With the virus now subsiding in China, but spreading at a rapid rate across the US and Europe, it will be companies like Amazon who ensure that people can survive in their homes. In order to meet the unprecedented demand which is surely to come their way, the American tech giant, and western leader in online shopping and delivery, has announced a huge recruitment drive.
Not only has Amazon announced that they will be creating over 100,000 new jobs in the US, they are also going to be investing more than US$350 million to increase wages for those working in warehouse distribution. The company are hoping that an hourly wage of around US$17 dollars will act as a suitable incentive to encourage those who are able to get to work.
In the UK, similar announcements have been made. Morrisons, one of the largest supermarket chains in the country, has promised to create 3500 new jobs in an effort to boost their home delivery service.
These jobs will provide vital employment for the thousands of people who currently work part-time or are in-between jobs. It is a very welcome boost to our economies as everything else is seemingly crumbling around us!
THINK LIKE AN ECONOMIST!
Q1. If people are ‘in-between jobs’, what type of unemployment does this refer to?
Q2. Use a diagram to show how the increase in the demand for labour affects the equilibrium wage rate and quantity of workers.
Q3. Despite the increased wages, why might people not want to take these jobs?
Q4. Besides online delivery companies, can you think of any other types of businesses that could actually benefit from the coronavirus?
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