Tale of Two Cities -- The Varying Economic Impact of the Pandemic

Who knew when reading Charles Dickens’s Tale of Two Cities in high school or college that parts of this classic text were prophetic regarding the impact of the 2020 COVID pandemic? Just as with the Tale of Two Cities, some people are better off (economically speaking) while others are financially devasted.

“It was the best of times, it was the worst of times, It was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity. It was the season of Light, it was the season of Darkness. It was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way….” The opening lines of A Tale of Two Cities, by Charles Dickens

The U.S. lost more than 22.3 million jobs at the onset of the pandemic in March and April 2020, the greatest two-month job decline in history and has yet to recover more than 9.8 million lost incomes. Not every household, however, felt the economic pain of this historic economic and medical catastrophe. Unemployment, though down from a massive 14.8 percent in April, fell to 6.3 percent in January. While good news, compared to the 3.5 percent seen in February 2020, the current 6.3 percent level is almost double the pre-pandemic level. The negative economic impacts of the pandemic are dismal – and these do not include the human and personal toll of the virus and related deaths:

While more than 10-million people remain unemployed, those that did not lose their jobs or hours worked fared comparatively well. This is evidenced by numerous metrics:

Within population cohorts, the drop in year-long average credit balances from 2019 to 2020 was in double digits for all groups except in Gen Z with a 6.1 percent decline. People that have lost their jobs or had their hours cut typically have increasing credit card balances or maxed-out credit

The comparisons from the most economically devastated to the those that gained economically are dramatic. It also shows the obvious disagreement regarding the next stimulus. No doubt, while millions of households and businesses are on the brink, others have enhanced economic foundations than prior to Coronavirus. For some their glass is overflowing, others one-half full, and, unfortunately, for those that have lost their jobs the glass is empty or shattered.

The Tale of Two Cities continues to be a prophetic work.