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5 charts on how the global economy changed in 2020

Jessica Yun
·3-min read
Life has resumed around the world, including in India (top left), Prague (top right), Melbourne (bottom left), but Covid-19 has left a lasting mark. (Source: Getty)
Life has resumed around the world, including in India (top left), Prague (top right), Melbourne (bottom left), but Covid-19 has left a lasting mark. (Source: Getty)

The year 2020 has been defined by dramatic change.

Millions have lost their jobs, with women-dominated industries disproportionately more affected. Meanwhile, household costs are rising, and the world has continued on its path of global warming.

But it hasn’t all been bad news, either: a new focus on health could be a good thing for the world. Management consultancy firm McKinsey & Co has distilled some of their research highlights on these major trends into the following charts:

Global warming comes with socioeconomic consequences

(Source: McKinsey Global Institute, Climate risk and response: Physical hazards and socioeconomic impacts)
(Source: McKinsey Global Institute, Climate risk and response: Physical hazards and socioeconomic impacts)

While some politicians deny the reality of climate change, the world is continuing to heat up. Under McKinsey’s projections, global average temperatures could rise anywhere between 1.5 and 5 degrees celsius by 2050 compared to today.

“As average temperatures rise, acute hazards such as heat waves and floods grow in frequency and severity, and chronic hazards such as drought and rising sea levels intensify,” McKinsey said.

“The impact of these hazards is non-linear and can have severe knock-on effects.”

24 million jobs under threat from both Covid-19 and automation

(Source: McKinsey Global Institute, The future of work in Europe: Automation, workforce transitions, and the shifting geography of employment)
(Source: McKinsey Global Institute, The future of work in Europe: Automation, workforce transitions, and the shifting geography of employment)

Millions of workers around the world were displaced after Covid-19 saw industries and businesses shut down en masse.

But before the pandemic hit, 51 millions of jobs were already under threat of digitisation and automation. About half of these have also been hit hard by the pandemic – 24 million, to be exact.

“There is a large overlap between jobs at risk due to Covid-19 in the short term and jobs displaced by automation in the longer term,” said McKinsey.

And this is just in Europe.

Some things cost more, while others cost less

(Source: McKinsey Global Institute, The social contract in the 21st century)
(Source: McKinsey Global Institute, The social contract in the 21st century)

In the 21st century, more people were in jobs – but over the last 20 years, wages have stagnated, and in the meantime, the cost of housing, healthcare and education have risen.

Meanwhile, the cost of discretionary goods, like clothing and recreation, have fallen.

“Housing accounts for about 24 per cent of household consumption and its cost has risen faster than general consumer prices.”

Covid-19 made gender equality go backwards

(Source: McKinsey Global Institute, COVID-19 and gender equality: Countering the regressive effects)
(Source: McKinsey Global Institute, COVID-19 and gender equality: Countering the regressive effects)

Around the world, women have a lower share of global jobs than men, at 39 per cent – but they’re disproportionately represented in the industries that have been adversely affected by Covid-19, making up 54 per cent of overall job losses.

“Our analysis showed that women’s jobs were 1.8 times more vulnerable to this crisis than men’s jobs,” stated McKinsey.

“One reason: the virus significantly increased the burden of unpaid care, which is disproportionately carried by women.”

New health focus could add US $12 trillion to global GDP

(Source: McKinsey Global Institute, Prioritising health: A prescription for prosperity)
(Source: McKinsey Global Institute, Prioritising health: A prescription for prosperity)

One of the few highlights to come from the Covid-19 pandemic is a new focus on health.

And while the global economy is still recovering from the recession, new advancements in medicine and biological science could mean fewer early deaths; more participation in the labour force; and higher productivity.

“Improved health could be a shot in the arm for the global economy over the next two decades, boosting global GDP by $12 trillion to 2040.”

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