The Pandemic Has Long-Term Effects on the Economy

By SAM URETSKY

If you’ve been reading “The Economic Impact of the Black Death, IIEP-WP-2020-14” from the Institute for International Economic Policy Working Paper Series (Elliott School of International Affairs The George Washington University), August 2020, you might believe “The Black Death was the largest demographic shock in European history. ... it was a plausibly exogenous shock to the European economy.” On the other hand, you might find that the Book Of Genesis 6:9-9:17 describes adverse weather conditions as a greater demographic and economic problem than bacterium Yersinia pestis. Ultimately, the study of economics is the study of response to a stimulus. The Plague, for example, was an infection that killed 30 to 50% of the population of England, France and Spain, and resulted in the end of the feudal system and the development of capitalism.

The COVID 19 epidemic was not as severe as the Black Plague, the Great Flood, or perhaps even the Dust Bowl of the 1930s, but it came at a time when technology was advancing and could adapt to change. In the United States, the growth of the great cities was related to the concomitant growth of the Internet, but also of the great cities. The growth of the cities was largely primed by well educated people wanting good jobs, and wanting to live near, not so much the jobs that they had, but the jobs that they wanted to get. While the Internet had not progressed as much as would have been desirable, there were attempts to have people work and go to school on-line. Too many people did not have fast broadband or even home computers.

A study, “Effects of remote learning during COVID-19 lockdown on children’s learning abilities and school performance: A systematic review (International Journal of Educational Development, September 2923) “reported several adverse effects of remote learning on children’s mental health have been identified, mostly related to the excessive use of electronic devices and lack of in-person contact with school classmates and teachers. These reported effects include disturbed sleep patterns, attention deficits, frustration, stress, depression, and boredom ... However, positive effects of distance learning have also been reported, such as improved competitive and motor skills. Therefore, the overall impact of school closures and remote learning remains controversial.

But, with the lockdown completed, many people preferred working from home, and resisted going back to the work, or at least going back full time. The result was an exodus from the major cities, not to rural areas, but to smaller cities, with lower costs, and shorter commutation times.

The Brookings Institution reported, “Big cities saw historic population losses while suburban growth declined during the pandemic.” San Francisco’s population fell 6.3%, New York City lost 3.5%, San Jose, Calif. lost 2.7%, and Chicago lost 1.65%. The Brookings report noted that the people leaving the cities They were well to do. The folks who fled New York represented some $21 billion in residents’ income and about one-third of the people who left moved from Manhattan with a mean annual income of $214,300.

On the other hand, San Antonio, Texas, Phoenix, Arizona, and Fort Worth, Texas, each had a net gain of more than 13,000 well off residents. While the opportunities for job advancement might be poorer than when they were closer to the corporate headquarters, the quality of life was better, and significantly less expensive. Business Insider made a list of advantages of moving to a suburb of a smaller city, or even a small town. The costs of living are distinctly lower, and the sense of community higher. Even jobs that require part time work in an office are easier to live with if it’s only two or three commutations a week. The shortage of broadband is still around, but most small cities have adequate Internet connections.

There are even benefits to the cities that are losing population. In New York City, as remote and hybrid work practices have hardened from trend to “new normal,” office occupancy rates are at an all-time low. The city has more than 95 million square feet of office space currently unoccupied –the equivalent of 30 Empire State Buildings. The goal has been to repurpose these office buildings. From the New York Times, “It’s definitely all happening, for sure,” said Eric Anton, an agent with the firm Marcus and Millichap who specializes in selling buildings. Of the seven hotels in New York he currently represents, three will likely become senior housing, one will become market-rate apartments, and the balance will stay hotels.” Another use has been widely proposed – vertical farms. As reported in Smithsonian, “office spaces already provide an ideal environment for growing food, since they are already air conditioned, heated and well ventilated. Not many modifications have to be made to the buildings themselves.” The benefits include year-round food production and alleviation of food insecurity that afflicts many urban centers. Farming is no longer the red barn farm of the past, and significantly not the economically stable occupation that it should be. The COVID-19 epidemic may be as much of an economics change as the plague – and we will have to adapt.

Sam Uretsky is a writer and pharmacist living in Louisville, Ky. Email sam.uretsky@gmail.com

From The Progressive Populist, April 1, 2024

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