The Sunshine Economy: A New Normal
As the battle against COVID-19 wears on, what’s the new normal? How could the pandemic reshape work and wages? How could it influence health care and the tourism industry?
Early on in the pandemic, it became clear the fundamental debate over how to fight the spread wasn’t over masks, but rather over restrictions. Nine days after President Donald Trump declared a national emergency, he sent this tweet:
WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!— Donald J. Trump (@realDonaldTrump) March 23, 2020
Seven months later, Spain, Germany, France and the United Kingdom are returning to restrictions as COVID-19 infections surge in those countries. Chicago has banned bars and restaurants again from serving customers inside. Some reopening efforts have been rolled back in Idaho and Connecticut. Areas experiencing a sharp increase of infections are returning to some of the tools used in the spring time in hopes of slowing the spread, and keeping hospitals from being overrun with coronavirus patients.
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"We have to accept the reality that the germ is going to have a direct impact regardless of what the government does on our economy," said Nicholas Christakis, Yale University sociologist and former hospice doctor. He expects what has come to be called a new normal to last into 2024, and economic consequences, among others, to last well after the biological threat passes.
The phrase “new normal” has become the usual. It’s how elected leaders made plans for how to reopen the economy after restrictions were put in place to slow the spread of COVID-19. It’s how businesses, schools and other institutions refer to operating with new rules like social distancing and limited capacity. It’s short-hand for whatever changes in our lives the virus is foisting upon us.
The new normal is losing its newness as the virus keeps circulating and it continues reshaping employment and industries, including two important to South Florida's economic and community health — tourism and healthcare.
Christakis' new book, "Apollo's Arrow: The Profound and Enduring Impact of Coronavirus on the Way We Live" is part history of pandemics and predictions of how COVID-19 will influence the economy for years to come.
"(In) 2021, we're still going to have to deal with (the virus). It is still going to be circulating. I don't think we will yet have reached herd immunity. I don't think a vaccine will be widely available until 2022," he said.
The end of the beginning is how Christakis describes the current stage of the pandemic in the United States. Daily infections are setting records in several states, and more than 17,000 people in Florida have died from the virus. That's the third highest number among states according to the Centers for Disease Control and Prevention.
He calls 2022 a landmark year for fighting COVID-19.
"We either have invented and distributed a vaccine or we reach herd immunity. And that's the moment when the biological and epidemiological impact of the virus is behind us. But there are other impacts that we still have to deal with," Christakis said.
The social and economic shockwaves will continue rippling even with a safe and effective vaccine and effective distribution.
"Businesses aren't going to suddenly return to normal," he said. "Americans are not going to just suddenly decide to return to airports or to restaurants or to cruises. It's going to take a while for them to kind of take off their masks and begin to venture outside and slowly recover and for businesses to tool up again."
But he is confident that confidence will return ... maybe in 2024.
He likens it to another Roaring 20s. After the 1918 pandemic and World War One, the American economy boomed in the 1920s, aided by pent-up demand and new technologies.
A century later, Christakis' prediction of the mid-2020s rings familiar.
"I think people are going to swarm to talk to public gatherings, to sporting events, to political rallies. I think that there's going to be a resurgence in spending and all the penny pinching and abstemiousness of the coming years will suddenly reverse."
THE DILEMMA OF PLAGUES
Nine months into the pandemic and the tension between economic restrictions and public health remains central to how communities are responding to fighting the spread of the disease. Some areas are returning to limitations on business in the effort to limit growing infections.
Florida, though, remains open.
Gov. Ron DeSantis declared the state was in phase three — the final phase — of its reopening in late September. It launched a confusing few days in South Florida about how much businesses like restaurants, bars and nightclubs could reopen. There remain some restrictions. For instance, restaurants and bars in Miami-Dade County can operate with at least half capacity, maybe more if they can spread out tables and chairs. Fort Lauderdale bars can only have half their capacity inside. And some areas still have curfews.
"People aren't stupid when there is a deadly germ afoot. People are going to reduce their activity level on their own," Christakis said. "Now we can debate what the government should do and what are the costs?"
For Christakis, the key statistic is the number of deaths. It's a lagging indicator, he acknowledged, but one he calls more reliable.
"We can have the ideological or policy argument about whether preventing that number of deaths is or is not worth it, given the consequences of shutting down the economy or slowing the economy, which itself also can cause deaths," he said.
But the sometimes confusing mix of rules from town-to-town, county-to-county, that has been the experience in Florida is not helpful in addressing the public health risks. His crude, but distinct analogy is to compare different restrictions and rules between neighboring areas as, "like designating one part of the swimming pool as where people can pee and hoping for the best."
WORK AND WAGES
The pandemic has reshaped so many parts of American life — from voting to working. Just as hundreds of thousands of people in South Florida filled in their ballots at home this election — for those with jobs that allow it — their home has also become their office.
We have to accept the reality that the germ is going to have a direct impact regardless of what the government does on our economy.
But the virus has done more than shifted work places for many. It has highlighted the connection between work and healthcare for many Americans. Last year, before the pandemic led to hundreds of thousands of people losing their jobs, two out of every five people in Florida got their health insurance through an employer, according to the Kaiser Family Foundation.
"I think this experience that we've had, this working from home, this telecommuting, the using of these technologies (such as) Zoom, it is going to have a long-term impact," Christakis said.
Business travel collapsed and has yet to return. Tens of thousands of South Floridians remain without work months after the pandemic began, costing them their income, and, for some, their health insurance.
"I think the pandemic has shown some of the irrationalities in how we organize health care in this country. And one of the ways it has shown that tying people's access to health care to their jobs in a time of a contagious disease makes little sense for them or for the rest of us," he said.
The link between work and health insurance can be traced back to another global challenge — World War Two. Companies began offering health insurance as a benefit to attract workers and get around federal wage freezes. It also helped when the IRS decided employer-provided health insurance premiums should not be taxed.
But unlike a world war, the pandemic likely won't cause a labor shortage that could put significant pressure on employers to raise wages. While anyone can get infected, senior citizens are most vulnerable. And those older Americans are not usually in the workforce any longer.
"It is the case that we're not going to have enough death to reshape the labor pool in our society compared to smallpox or bubonic plague," he said.
TOURISM AND HEALTHCARE
No major employment sector in South Florida has been spared from the deep pandemic recession this spring. Over the past year, the only industry to add jobs was a small increase in financial services. The job losses have been most severe in the leisure and hospitality industry.
Restaurants and bars were closed for weeks and were restricted on how much they could reopen. Hotel occupancy is a fraction of what it normally would be. Cruise ships are docked. Business travel has been replaced by Zoom meetings.
Hospitality could "put a premium on safety," according to Christakis. More isolation from other guests, regular room service, or even COVID-19 testing may become part of a hospitality package to build confidence among tourists.
But restrictions remain. Christakis' home state of Vermont requires most people entering the state, even residents returning home, to quarantine for two weeks. That makes a Florida getaway a lot less less convenient as winter approaches, putting aside any concerns about catching the virus while traveling.
Hospitality and health care had been fueling the employment boom before the pandemic. In the year before COVID, one out of every three new jobs in South Florida were created in these two industries — 130,000 new jobs combined.
Tele-medicine took off because of the restrictions to slow the spread of the disease. Instead of going to a doctor's office, patient appointments were moved online or over the telephone. It is a trend that began several years ago, but was accelerated because of the pandemic.
Christakis thinks this trend will not reverse itself.
"So many of the reasons people go to doctors are not clinically indicated, but they have to do with bureaucratic requirements like going to a doctor to get a prescription refill. It is just silly," he said.