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How the COVID-19 economic crisis is impacting Australians

Short of mentioning the “R” word for present circumstances, it is clear that the COVID-19 pandemic has been shaking up the Australian Economy in a manner reflective of the 1991 Recession.

Australians born following this period are facing an economic crisis that is unprecedented for their generation. The once celebrated “sick day” has become a mandatory implementation, and young Australians, formerly posting about their vibrant social lives, are now turning to social media for collective mourning about the uncertain times that face the commonly regarded “Lucky Country”.

How are Australians coping with the economic downturn? And how will they fare on the other side of the pandemic?

Budding Block-Heads

For fans of popular renovation programs such as “The Block”, the mandatory lockdown has presented Australians with an opportunity to try their hand at DIY home makeovers.

In some States, police have been issuing fines to those who venture outside without a valid reason. However, retail businesses such as Bunnings have continued to welcome customers despite supposedly strict rules around social isolation.[1]

The retail giant has reported record sales since lockdowns began, with staff voicing concern over the lack of social distancing practised at the buzzing locations.[2]

However, not all budding Block-Heads possess the skills or assistance rendered to realty television contestants, and many face the risk of lowering their house value over failed project attempts, or shoddy workmanship.

The perpetual sick day

Thousands of Australians have found themselves unemployed in the economic downturn. For many, they are now in a situation they never thought they would be in, navigating the Centrelink process.[3]

The Federal Government estimates at least one million people could be made unemployed as the economic effect of coronavirus sets in.  People have been lined up at Centrelink offices across the country to try and seek access to welfare payments, namely, the $550 fortnightly Coronavirus Supplement payment. The demand for help was so high on Monday, 23 March 2020 that it crashed Centrelink's website.[4]

Younger workers are overrepresented in occupations that have been directly impacted by the early economic fallout of the pandemic, with around 40 percent of younger workers in Australia working in retail or hospitality.

Prior to the economic fallout, young Australians were already “doing it tough”, according to Callam Pickering, economist at jobs site Indeed.

The 1991 recession suggests that the impact of the pandemic will stick with younger Australians for the balance of the upcoming decade.[5] During the last recession, the youth unemployment rate peaked above 20 per cent in 1992.[6] As the current situation is relatively novel and subject to constant change, the current unemployment rate of young Australians is yet to be definitively measured.

24/7 Cocktail Hour

The recent trend of panic buying alcohol suggests a propensity towards Australians anesthetising reality amid the pandemic.  According to the Commonwealth Bank of Australia’s card data, spending on alcohol surged during March 2020, jumping to 86% for alcoholic goods (i.e. at bottle shops).[7]

The novelty of increased alcohol consumption has a sobering effect, when considering the fact that alcohol-related injuries take up an enormous amount of resources in Australia’s already strained health system, according to West Australian Premier Mark McGowan.[8]

Furthermore, increased intoxication inevitably leads to an increased risk of conflict or violence with domestic co-inhabitants. While quarantines are an effective measure of infection control, they can lead to significant social, economic and psychological consequences.[9] The inability to work has immediate economic repercussions and deprives many individuals of essential livelihoods and health care benefits.[10] Social distancing fosters isolation; exposes personal and collective vulnerabilities while limiting accessible and familiar support options.[11]

For those that are becoming habitual drinkers during the pandemic, integrating back into society without a chemical crutch may prove to be difficult. As it stands, short term alcohol consumption for young people can have a tendency to lower immunity, which is a less than desirable side-effect in these times.[12]

Going Viral

While social media has been an outlet for grief and frustration for young Australians and a means to connect during the pandemic, psychological studies suggest that general media exposure during the 24/7 news cycle can increase perceptions of threat and activate the "fight or flight response," which can lead to subsequent physical and mental health problems.[13]

Several studies conducted after previous collective traumas, such as mass violence events or natural disasters, have demonstrated that both the type and amount of media exposure play important roles when understanding psychological and physical responses in the aftermath.[14]

For example, several hours of daily television consumption in the days after 9/11 was associated with increased post-traumatic stress and new-onset physical health problems two to three years later. High stress responses post-9/11 were associated with more cardiovascular ailments over the three years following the attacks, especially for people who were worried about future terrorism.[15] Similarly, researchers have found that when people were exposed to several hours of daily media during the Ebola outbreak in 2014, they were more likely to experience increased distress and worry, as well as poorer functioning over time compared with people who consumed less media.[16]

As such, it is essential to go behind the headlines, as often “clickbait" headlines are crafted to spark emotion. But, it is crucial to understand the context of a news story, not just the headlines.[17]

Misinformation from media outlets has spread more rapidly than the virus itself. As COVID-19 turns into a full-fledged public health crisis, multiple theories regarding the origin of the have taken hold of the internet. [18]

It is vital that Australians properly distinguish the facts from the fiction, as basic information on how to reduce transmission and exposure to the virus has been muddled by uncredited sources.[19]

Moving forward

Amid the pandemic, Australia is still very much the Lucky Country. Though the economic crisis is shaping more into the “R” word as the days pass, Australians are known for their resilience, comradery and larrikinism even in the face of adversity.

We must keep in mind, that like the 1991 Recession, this too shall pass.

Words: 1163

*Clare Venema

Solicitor

Oakbridge Lawyers

E: CVenema@oakbridgelawyers.com.au

T: 61 8 7078 0377

 

 

Sources:

  • Tom Cowie, The Age (Online), https://www.theage.com.au/national/victoria/can-i-go-to-bunnings-diy-run-gets-tick-under-stay-at-home-rules-20200407-p54hwf.html, 7 April 2020
  • Goya Dmytryshchak, The Sydney Morning Herald (Online), https://www.smh.com.au/national/bunnings-packed-despite-coronavirus-warnings-20200328-p54eud.html, 28 March 2020
  • Emily Sakzewski, ABC News (Online), https://www.abc.net.au/news/2020-03-28/coronavirus-thousands-of-australians-unemployed-on-centrelink/12084438, 29 March 2020
  • Stephanie Chalmers, ABC News (online), https://www.abc.net.au/news/2020-04-16/history-suggests-youth-unemployment-will-surge-coronavirus/12151668, 16 April 2020 
  • James Carmody, ABC News (online), https://www.abc.net.au/news/2020-03-31/alcohol-limits-introduced-during-coronavirus-outbreak/12106182, 1 April 2020
  •  N. van Gelder, A. Peterman, A Potts, M O’Donnell, K Thompson, N Shah et al, “COVID-19: Reducing the risk of infection might increase the risk of intimate partner violence”, The Lancet, https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(20)30092-4/fulltext, 13 April 2020.
  • Headspace, https://headspace.org.au/young-people/how-does-alcohol-affect-mental-health, 9 August 2018.
  • Garfin, D. R., Silver, R. C., & Holman, E. A, “The novel coronavirus (COVID-2019) outbreak: Amplification of public health consequences by media exposure”, American Psychological Association, 25 March 2020.
  • Michael L. Birnbaum, M.D, Psychology Today (online), https://www.psychologytoday.com/au/blog/the-health-our-youth/202003/navigating-the-coronavirus-and-social-media, 13 March 2020
  •  Areeb Mian & Shujhat Khan, “Coronavirus: the spread of misinformation”, BMC Medicine, https://bmcmedicine.biomedcentral.com/articles/10.1186/s12916-020-01556-3, 18 March 2020.


[2] Goya Dmytryshchak, The Sydney Morning Herald (Online), https://www.smh.com.au/national/bunnings-packed-despite-coronavirus-warnings-20200328-p54eud.html, 28 March 2020

[4] Ibid.

[6] Ibid

[8] Ibid.

[9] N. van Gelder, A. Peterman, A Potts, M O’Donnell, K Thompson, N Shah et al, “COVID-19: Reducing the risk of infection might increase the risk of intimate partner violence”, The Lancet, https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(20)30092-4/fulltext, 13 April 2020.

[10] Ibid

[11] Ibid

[13] Garfin, D. R., Silver, R. C., & Holman, E. A, “The novel coronavirus (COVID-2019) outbreak: Amplification of public health consequences by media exposure”, American Psychological Association, 25 March 2020.

[14] Ibid.

[15] Ibid.

[16] Ibid.

[18] Areeb Mian & Shujhat Khan, “Coronavirus: the spread of misinformation”, BMC Medicine, https://bmcmedicine.biomedcentral.com/articles/10.1186/s12916-020-01556-3, 18 March 2020.

[19] Ibid.