Swine Flu Knock Out Punch To The Economy?

Swine flu and its economic affects and impact

Looking at the my FireFox browser, which default homepage is Yahoo, I can see clearly the the swine flu outbreak has taken over the headlines. When, I go to other other websites like MSN and even to my local area news websites like the Toronto Star, it’s always on the front page and this reminded me of the S.A.R.S incident back in 2003 where Toronto and Hong Kong was affected hard.

In 2003 the S.A.R.S flu virus which supposedly was released in southern Asia had caused social problems, where anyone who looked Asian in the subways and malls were avoided and discriminated against. This was a particular social problem in Toronto, and other places in the United states I’m sure where there is a large population of Asians.

With this latest Swine Flu virus which is supposedly originated from Mexico, I can see the same social problems happening where anyone looking Mexican or Latino in public places like subways, or malls will be discriminated against in the United States during this Swine Flu crisis. This unfortunately cannot be helped, it is the psychology of fear at play, and most people cannot see past the fear. Not all Asians had S.A.R.S just like not all Mexicans or Latino looking person will have swine flu, but fear made the public discriminate which was unjustified during the S.A.R.S episode.

The above paragraphs were about the social and psychological affects, now what about the economical effects. The United States right now is already in an economically fragile situation due to the credit crisis. Businesses are closing or cutting back and jobs are being loss by the hundreds of thousands. No one is spending money, because they’ve got none to spend.

Now add into the mix this Swine Flu, outbreak. From my personal experience of living in Toronto during the S.A.R.S incident, these are a few of the social behaviours of the population that will affect spending:

1. People will generally be less inclined to go out. They will avoid public gatherings like malls, restaurants, bars and dance clubs, therefore not spending money at these places.

2. People might avoid public transportation if they can
(close quarters with other commuters).

3. Foreigners will avoid traveling / vacationing to the Americas (Canada, United States and Mexico). This happened in 2003, where Toronto’s tourism dropped to record lows. This can very well happen to the Canada and United States. Less foreigh tourist to means less tourism dollars spent at Canadian and U.S businesses. Travel advisories has already been issued by other countries telling their citizens not to travel to the Americas.

4. Business travel to Canada and United States will stop as well.
With business travel making up the majority of travel in the world, if this slows or stops it will be a huge hit, for the airline and hotel business.

5. People will be less inclined to go to concerts, festivals which may impact the entertainment industry.

The above are just what I can think of off the top of my head. If you imagine the majority of the population (hundreds of thousands of people) engaging in those behaviours outlined above, you can imagine the dollar amount loss in spending in the economy.

This potential loss of money flow in the economies of Canada and United States due to the Swine Flu is what I mean by the “Knock Out Punch To The Economy.” Now mind you, this is all dependent on the fact that the Swine Flu outbreak worsens and is not contained.

I for one certainly hope that the Swine Flu problem will be contained quickly, because if it doesn’t I don’t think the economies of the Americas withstand another big hit. The United States has it worse with unemployment at 8.5% and climbing. Where I am in Canada, it’s quite bad here too…I can safely say that a good percentage of people I know from all walks of life are out of work and I feel for them. For myself at work it feels awfully quite, the Swine Flu in this environment would be simply adding fuel to the fire.

by Das Brain

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