The ‘Downward Spiral’ and the Coronavirus

Before I start, all my education work via Geogramblings is done all in my spare time, at my own cost and is free to access and enjoy. If you can spare a few pence, I’d be delighted if you could show your thanks by ‘buying me a coffee‘. Thank you! 🙂

It’s been just over four weeks since my last video blog exploring the geography of the spread of the coronavirus. Back then, I was just about to head over to San Francisco for a visit, and outside of China, the numbers of confirmed cases were mostly in the single digits. Well, things certainly escalated quickly!

My scheduled blog entry for March was meant to be an ‘on-location’ video about my trip to San Francisco, looking at examples of sustainability – but that’s been pushed back due to us all now living through a bit of geographical history. So, without access to the green screen set-up at work, I rigged up a basic set-up in my solar-powered garden office to explore how the coronavirus has sparked a ‘downward spiral’ in local economies, and give some thoughts about what communities can do about it.

 

While I will mostly be focusing on the local and regional scale, let’s start off looking at the bigger picture.

The economic context

The last true ‘global pandemic’ is arguably the 1918 Spanish Flu (which, in fact, originated from the United States). I don’t need to go into much detail at all about how different the world was over 100 years ago. Today, in 2020, we’re more interconnected and interdependent than ever. Globalisation has meant it very much is a small world after all, with a high level of circulation of goods, services and people across national boundaries. In terms of economics, ever heard the saying that if the United States (or China) sneezes then the whole world catches a cold? This alludes to how global economic superpowers have a huge influence on the world’s economy.

This interconnectivity helped the spread of the COVID-19 coronavirus, as I explored in my previous video blog, and it’s also is the Achilles heel when it comes to the economic impacts of the pandemic. Check out the BBC’s “Coronavirus: Visual guide to the economic impact” if you would like to explore more about the economic impact on a global scale.

I find it absolutely fascinating as a geographer that such a global issue is having clear and tangible local impacts. So let’s zoom into the economic impacts at a local scale, as that’s where we are feeling and seeing the impacts of the pandemic on a day-to-day basis right now.

Geographical concept: the downward spiral (negative multiplier effect)

Almost every Geography and Economics course will have its students study the ‘multiplier effect’ (or ‘cumulative causation’), where investment and economic growth in an area could self-perpetuate. But this can happen in reverse, and this is commonly termed the ‘downward spiral’ or ‘negative multiplier effect’, as illustrated below.

Examples of the downward spiral taking hold would be the decline of areas of the UK that were once reliant on the coal and steel industries, and the ‘Rust Belt’ in the United States due to the decline of the car manufacturing industry.

But how might a ‘downward spiral’ manifest itself as a result of the lockdowns and responses in order to stem the spread of the coronavirus? Below is one possible and simplified example. Indeed you can spawn off further impacts from any one of the aspects that feature in this spiral.

Even before the stay at home ‘order’ was issued here in the UK on 23rd March, the recommendations to stay away from places to gather such as bars, theatres, clubs etc already started local economies sliding down the spiral.

As people stayed away from shops and businesses, they began to lose custom. Those with tight margins quickly found that they were not getting enough people through the door to serve their threshold population. The lack of revenue coming in means they will fall into difficulty with paying for rent for their business property and paying the wages of their staff. As individuals and businesses fall into greater debt this feeds back into the spiral as people try to conserve whatever money they have in reserve, leading to less spending and so forth. The banking system and government support will be under pressure to prevent individuals and businesses from increasing debt and even bankruptcy. So the cycle of debt continues. The BBC article “UK businesses feel impact of latest measures” provides specific examples and figures that you can apply to the ‘downward spiral’ theory.

What can we as individuals and our communities do to slow or stop the ‘downward spiral’ in our local economy?

I was already thinking about what we could do to support our local economies in this difficult time, but had difficulty how to exactly put my thoughts across. Then I heard Martin Lewis on his weekly phone-in on the Emma Barnett Show (BBC Radio 5 Live), and for me, he hit the nail on the head. He said, “We all need forbearance right now”. Acknowledging that this is a little change in tone for a consumer rights champion, forbearance is key – the understanding, compassion and congeniality to simply put things off, waive or defer payments or calls for refunds.

Combining Martin Lewis’ advice and my thoughts, and giving the key disclaimer that these ideas are for those who are financially able and have the means to without putting themselves in financial difficulty, here are some things people can do:

• For up-front payments for services or experiences that you are now not going to get because they have been cancelled, postponed etc – while it is your consumer right to pursue a refund, treat the payment as a charitable donation.
• Enquire if a service or the goods can be deferred. Some businesses, especially in the food and drink industry, have started offering vouchers that can be traded in once things get back to normal. Of course, a business you have a voucher for may still go on to collapse, but it may be enough to keep their cash-flow going.
• Consider the local independent business as well as the big chains. That is definitely not to stay don’t shop at, or order from, chain stores – they still have workers that need to be paid, but perhaps alternate your shop with the local grocery store, butchers, etc. Those businesses are often family or community-run whose margins are very tight meaning they are at higher risk of collapsing.

For me, the acts of altruism above are not only ways that can slow down the spiral and attempt to prevent businesses from going under. But also think of post-crisis, when this coronavirus issue passes over because it will. We will all want to go back to the local theatre, shop at the local shops, use our favourite childminder etc again – but if they go out of business, they won’t be around when we want things to go back to normal. In essences, things won’t be normal if we allow our local economies to collapse.

What other community-based acts can we do?

If you don’t have the financial means or really need to pull your purse strings tight (or any other reason), then there are still some things you can do. Offering to do a shop-run for an elderly, vulnerable or poorly neighbour or family member, scheduling online chats (although take care with privacy).

Get involved with ‘micro-volunteering‘ using your computer. Some good examples are Missing Maps, Rainfall Rescue and eBird. While these aren’t ‘local’, they are good ways to put your time and computing power to good humanitarian use.

**Added 10th April** Dan Raven-Ellison is calling for volunteers to help create a network of walking routes from settlement to settlement. Find out more about ‘Slow Ways’ via Dan’s twitter post:

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All my education work via Geogramblings is done all in my spare time, at my own cost and is free for you. If you can spare a few pence, I’d be delighted if you could show your thanks by ‘buying me a coffee‘.

Stay safe, stay healthy, stay home x