Companies Raising Prices During the Pandemic

Companies+Raising+Prices+During+the+Pandemic

Serene Baddar

    It is no lie that companies have been raising their prices during these past few months. As the Covid-19 pandemic is interfering with businesses, company owners are in search of a way to continue their businesses. 

    Because of the 2020 Coronavirus pandemic, companies have faced a decrease in sales, and have no other choice than to raise their prices in order to keep their companies going. But will customers be able to afford these new prices?

    The Coronavirus started spreading in late December of 2019, although it started becoming a serious issue in March of 2020. Because of this unexpected event, the unemployment rate has risen more than ever since 1948. 

    In April of 2020, every state reached unemployment rates greater than their highest rates during the Great Recession, and the unemployment was specifically concentrated in industries that provide in-person services. 

    Part-time workers experienced an unemployment rate of 24.5% in April, and workers without a college degree experienced worse unemployment rates, while the workers with a Bachelor’s degree or higher had a much lower unemployment rate. The gap between educated and less educated workers still remains.  

    And companies have also been at loss due to this pandemic. Across the entertainment industry, ticket sales for concerts, movies, and other events are falling rapidly due to cancellations or postponements. 

    Five billion dollars in the global film industry could be lost due to the pandemic. The worldwide airline revenue is estimated to fall by as much as $113 billion by the end of this year. 

    Due to the Coronavirus pandemic, companies are making a lot less money due to the shutdown of the country and global economy. The U.S. stock market has already dropped in value, and it became time for companies to innovate. Their way of coming back on their feet was by raising their prices. Companies believed that raising their prices would help them fill in that gap of lost revenue. 

    How will North Creek High School be affected by this change? Students would normally go back to school shopping to buy new clothes, as well as school supplies. But since school has started and remained online, there has been no need to go out and buy new things, especially since many parents have been unemployed. 

    As of right now, the North Creek students have not been greatly affected by companies raising prices, but many students have lost their jobs too. 

    Over the summer, many have been stuck at home without going to work everyday. Only a few months ago students were safely able to go back to work, but concerning companies’ new strategies, there seems to be no harsh effect on North Creek students. 

    Yes, companies have lost a lot of money in these past few months, but on the other hand, many people have lost their jobs, and can barely afford to pay their rent. 

    Companies are having difficulty trying to grasp that idea. They don’t understand that their customers will have trouble paying for regular prices, and yet companies raise their prices. A lot of people fortunately still have stable jobs, and can afford to pay for raised prices, but most of the country cannot. 

    Now the main question is, will this new strategy of raising prices fill in that gap of lost revenue? If the only people that are able to afford these new prices will be the few percentages of the country, then is this strategy the way to go? 

     We don’t know how many years it will take for the country’s economy to get back to normal, but at a time like this, companies should be thinking of better ways to earn more money, rather than just raising their prices. Ways that can not only help them, but that can also help their customers.