Coláiste Dhúlaigh Series: Covid’s unspoken recession, it could be worse.
2nd April 2021
This series is in collaboration with first-year Investigate Journalism students in Coláiste Dhúlaigh CFE
Despite being in Dublin, the town of Rush has all the qualities of a typical Irish country village. Traffic jams are caused mainly by the fleet of tractors running in between fields and dropping slabs of mud in treasure trail fashion up and down the main street. Residents are spoiled for choice when it comes to where to pop in for a pint and what take away will fuel the walk home after a night full of ‘just the one”, after all, taxi’s in rush are rare. Old buildings lining the street lay dilapidated hidden behind kitschy stickers that make the boarded up windows and doors look just as convincingly authentic as Carrigstown. Despite its dreary small town quirks, occasionally Rush gets a rare dose of excitement in the form of a ‘Coming Soon’ sign.
March 2020 saw the arrival of Café Verde on Rush main street. Renovations began on one of the towns oldest and most central buildings for the Polish owned coffee shop. For owner Aneta Laska the grand opening couldn’t come quick enough so she decided to open the coffee shop on St. Patricks day for 2 hours to hand out free coffee to the town. The freebies went down a treat, heightening the anticipation for opening day. Nobody could have predicted what would come next for Aneta, Café Verde and the entire country.
The grand opening was March 23rd, and just two days later the then Taoiseach Leo Varadkar addressed the nation from a podium outside Leinster House to announce the official lockdown beginning midnight that night. For new business owners like Aneta this was particularly devastating. “I remember just sitting here staring at the wall, not knowing what was going to happen, the shutters were still half way down and people were still knocking and looking for coffee but I didn’t know what I could do.” Aneta was not alone.
Businesses all over the country were forced to close. The worrying sight of streets lined with closed shutters was reminiscent of 2008. The most concerning thing at that point was health. Our health, our family’s health, the neighbours and for some reason celebrities (Tom Hanks and Idris Elba taking prominence in my thoughts.) We had our priorities laid out clearly for us to follow without opportunity for misinterpretation, “WE’RE IN THIS TOGETHER!” We are, but for a lot longer than we think.
Our economy contracted by 6.1% in the second quarter, breaking the record of 4.7% in 2008 signalling the arrival of the recession. The revelation of the impending recession didn’t take long to manifest itself in daily conversation, however the assumption that the recession wouldn’t hit until the aftermath of the pandemic was naive. Ireland is doing better than most, Britain for example has seen a collapse of 20.4% so far. With numbers like these you would think they would be all over the news, not taking priority over the Covid headlines, but somewhere in there surely?
One of the first people to look at the pandemic from an economic standpoint was financial advisor Eddie Hobbs. Looking not only nationally, but globally, Hobbs said “Throughout the world we are seeing the same effect, a very substantial fall in economic activity in quarters two and three with some recovery going on now. We know now from the current data that by the end 2021 the United States should be back roughly to where it was at the end of 2019, that being its most optimistic outcome.” He then went on to say “Europe will be slower, I think it will have lost 5% of its economic activity, it will take till nearly 2023 or 2024 to recover”
Recessions are self fulfilling prophecies. A looming recession causes panic, panic that motivates us pull back on our spending and investments. This is devastating considering how close it falls in respect to 2008. Society learns from every recession and carries that knowledge forward helping us better cope, unfortunately this is useless to us this time. This time we don’t have the banks or the builders to blame, this is simply a force majeure, an unforeseen, uncontrollable and overpowering event.
“Unemployment rates during the pandemic have been rising at a very steady rate”
The biggest difference is in its most affected industries. From 2008 onwards our economy was in a sorry state, but at least we had the hospitality industry. The majority of the hospitalities workforce is comprised by 15-24 year olds. What effect is this going to have on this generation, the second generation in a row to go through an economic crash during their teens and early twenties? Having a few pints with friends playing pool and talking about who was next on the long haul flight to Australia was the standard for the night down the local back in ’08. We aren’t used to this isolation, and for the first time in history we can’t mass emigrate. We are all here, at home in our country, closer than ever, yet never so alone.
Unemployment rates during the pandemic have been rising at a very steady rate, definitely nothing compared to what we expected them to be. During my own investigation however, I discovered that all citizens receiving the PUP are still classed as employed. The logic behind that makes sense but at the same time seems questionable. Without support from the government, a lot of businesses who have closed their doors will never reopen. The PUP is useless if there is no job to go back to, and we are sure to see a migration of PUP recipients over to the Jobseekers within the year.
In small rural towns we are seeing a rejuvenation of commerce. Footfall has landed in local businesses due in no small part to residents working from home. I spoke to Sinn Fein’s Louise O’Reilly about the future of working from home and what benefits it could have for towns. “One thing that I am pushing for at the moment is to establish [digital] hubs in the main streets. Not everybody wants to work at home but they also don’t want to go into [Dublin] Town” The prospect of not having to commute into the city centre is exciting to say the least. Not only is it beneficial to workers who have up to this point spent three or more hours commuting per day, but for local enterprises too.
“People may not be able to work from home, if you are living in a shared accommodation or somewhere with bad wifi or where there’s simply no space, you can’t work from home. You need somewhere to go but you don’t want to go back into the office full time.” This is where local hubs come in. Having a workforce operating remotely rejuvenates the locality and is the driving force for economic development. In a world where amazon prime takes the hassle out of shopping because there’s no time to run to the shops, it also takes the business from SME’s that are crucial to our economy.
Shopping local has never been so important. In recent years we have seen non Irish online stores heighten their operations in Ireland offering cheap deliveries and high discounts. Amazon in particular is operating at a high rate despite the closest distribution centre being in the UK. SME’s in particular are in danger of closure, where a number of them can operate through online sales not all of them can. In these uncertain times with our economy hanging in the balance it is paramount that we do our best to pump our money into our own economy and shop Irish where possible. Waving the green jersey and posting “SHOP LOCAL, SHOP IRISH” online while importing goods from overseas will only do damage in the long run.
The European Central Bank had initially forecasted that the economy would bounce back by the end of 2021, however they are now predicting that it will be closer to 2023. In the second ECB biannual financial stability review of the year they state “Professional forecasters now expect that the euro area economy will not exceed pre-pandemic GDP levels until 2023.” This is due largely in part to the second wave of covid. The easing of restrictions at the beginning of the summer period seen a rebound in economic activity which made us feel a little more comfortable. The second wave however put an abrupt end to that possibility.
With the rollout of the vaccine making its move, it looks like the end of this nightmare is in sight. We will be moving forward in life with the new normal and that’s not be a bad thing. And although the circumstances behind this recession are entirely different, there is still a lot that we learned in 2008 that we can carry forward into today. We have survived before, we can survive again.
When I spoke with Aneta I asked her what her plans were for the future and if she had any worries about moving forward, to which she responded with a light hearted “Whatever happens, happens. When I was opening this place I had big plans for it, but maybe for right now it’s just not meant to be.” Let me clarify, Aneta didn’t mean that her plans would never happen, just that they are on pause for a while. It’s important that we go into the future with that same attitude, it’s not forever, just for now.