Acute & Chronic Economic Considerations of COVID-19

require costly and lengthy education or training? If so, how will an individual pay for it?

From the producer side, the need to downsize and economize to survive, will continue into the recovery phase, so rehiring for all positions that existed prior to the pandemic is unlikely. Further, some business collapse altogether during periods of economic downturn. The coexistence of lower consumer spending and fewer available jobs creates an economic symbiosis that slows economic recovery. Additionally, producers and businesses may fast-track adoption of mechanization, automation, and computerization in order to lessen or eliminate the need for labor for the long-term. Investing in a technology lowers operational costs, especially labor costs to pay employees. For example, technologies that automate food ordering or in-store purchasing are long-term investments that render labor, like cashiers and waiters, obsolete and removes its cost.

Another potential long-term impact is the disincentive to enter into certain careers that the pandemic revealed to be high-risk from a health standpoint, and many of which are also costly to enter. Higher education is increasingly expensive while wages remain stagnant and cost of living swells. Indeed, from 2006 to 2017, prices for undergraduate tuition, fees, room, and board at public universities rose 31 percent, and prices at private nonprofit universities rose 24 percent, after adjustment for inflation. For an in-state student, one year of medical school at a public university costs just under $35,000, a figure that does not include cost of living; out-of-state and private school students pay considerably more. Medical professionals and other positions necessary to maintain our health system may become unattractive because of the proximity to infected patients when the next outbreak occurs. This is especially concerning because these are the jobs that comprise our critical health infrastructure, and we will need these skills and expertise in order to prepare for, prevent, detect, and respond to the next biological event. We also need, perhaps now more than ever, to bolster our scientific and medical R&D for the same reasons. In recent years, scientific research suffered major budget cuts, a serious gaffe as we now struggle to rapidly develop effective diagnostics and therapeutics for COVID-19. Is the value of scientific research better appreciated because of the pandemic? If so, will those funds be restored?

Even as we weather COVID-19, the questions remain as to when, not if, the next infectious disease will emerge. We were unprepared for COVID-19, but, hopefully, we will learn a few lessons from it. Specifically, to better prepare for the next pandemic, we need a plan to sustain our economy at the individual, household, and firm levels so that we are not forced to shut down, accrue more debt, and, perhaps, never recover from the economic losses the outbreak causes.

Rachel-Paige Casey is working on her Ph.D. in Agricultural Economics at Texas A&M University. This articleis published courtesy of the Pandora Report.