Economic contractions and pandemics go 'hand in hand' — just look at the Black Plague

A lot has changed in 700 years, and while this impact won't be as drastic as the Black Death, pandemics are often accompanied by contractions.
After the Black Deathcontraction ended, wages and consumerism actually rose in the UK, but that was fromless workers tending a finite amount of land.
The pre-coronavirus economic landscapeprobably means differentresults automation may increase, and hourly jobs are rapidly disappearing.
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The UK's economy could contract by 6.5% in 2020 more than 2009, but less than the aftermath of the Black Death , Jamie Powell of the Financial Times' Alphaville reports , citing a new report by Deutsche Bank's Jim Reid.

The Deutsche Bank report looked at the UK's economic contractions going back as far as1271. The second largest was by 23.5% in 1349, after the outbreak of the Black Death. While the coronavirus isn't projected to hammer the UK economy that hard, a look at the UK economy since 1900 places its impact only behind 1921 and 1919.

"The mortality rate as a result of the bubonic plague outbreak then was far in excess of today's pandemic, with the Bank of England dataset showing that the English population fell from 4.81m in 1348 to just 2.60m in 1351, a reduction of over 40% in the space of 3 years. But it goes to show that pandemics have gone hand-in-hand with major economic contractions through history," according to Reid.

The Black Death's aftermath radically altered Europe's economic landscape particularly for workers.

Indeed, Andy Mukherjee at Bloomberg points out that once the contraction was over, that outbreak actually led to increased productivity and wages; there were far less workers to tend to finite amounts of land, which was the primary capital good in that economy. And new behaviors sprung up from the trauma of mass loss: there was an increased desire for mass consumption, and the spending to match it.

But, as Mukherjee notes, the Black Plague is not analogous to our current viral and economic predicament. This era's rapid shift to digital technologies and automation could further displace hourly workers. Companies like YouTube have already "temporarily" shifted to machine learning automation to moderate content. And, while Americans are receiving stimulus checks from the government, that may only salvage the economy for a few months before more intervention is required.

And businesses like the restaurant industry which once employed 15.6 million people, according to the National Restaurant Association , including many hourly workers may not come out of thispandemic looking the same.

About 30,000 restaurants have closed for good , and 110,000 more are expected to close in the next month. Many restaurant workers likely made up the record 3.3 million unemployment claims for the week ended March 21, the first report after many cities shut down non-delivery service for restaurants.

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