It’s an odd feeling to realize you are living in a time that will go down in the history books. My kids marvel at how old my husband and I are, but we didn’t live through the world wars, and I don’t remember Vietnam. Sept, 11, 2001, is the only standout. Then March 2020 happened, and we were all jolted into an alternate reality. Could this really be happening? I have a public health background, and those experts have been saying since before I was in graduate school that a pandemic was imminent — but even I had trouble believing the magnitude of disruption.
Never mind that an economic shutdown became political and divisive. At this point, 2020 happened, and we will only know whether all the decisions were scientifically and economically “worth it” when the pandemic is far in the rear-view mirror. Let’s look forward.
The first thing to do is assess the damage. The economy contracted by 3.5% in 2020. By way of comparison, the economy contracted by 2.5% in 2009 during the Great Recession. Prior to this current shock, trend growth had been about +2.5%. If we were to add up the foregone growth ($1 trillion) and the unprecedented fiscal stimulus, which will likely land at a total of $4 trillion, we are talking about a $5 trillion price tag due to a microscopic virus. Five trillion is about 25% of U.S. GDP pre-pandemic, a mind-numbing statistic. So, the focus should be how to get back to at least baseline levels of growth and productivity for this calamitous event while assuring another one doesn’t happen.
As of now, early 2021, highly effective vaccines are being rolled out across the nation, and we are on our way to herd immunity. We are, however, in a race to immunize the world before viral mutations take hold. The U.S. could have 100% immunity, but if the rest of humanity doesn’t reach collective immunity and mutations proliferate, one of those mutations will eventually evade current vaccines, and we will be playing whack-a-mole with COVID-19. The U.S. could adopt countries with some of the world’s most vulnerable health systems and lead in global vaccination efforts. It’s not just the right thing to do, it’s the strategically smart thing to do both from a leadership perspective and from a self-preservation perspective.
As I wrote in an article earlier this year, there are other structural issues that pre-date the pandemic. For example, experts on climate have been issuing warnings for decades much like the epidemiologists have. I may be an Excel goddess, but I am not a climate expert, so I am going to trust experts from other fields. I don’t want to learn the hard way like we did with this pandemic that ignoring warnings and skirting preparation is as costly as it is. Instead, we can use this seismic disruption to breed innovation as humans have successfully done throughout time. Humans are incredible at pivoting when they need to, and along the way of developing new pathways, we create new jobs. All it takes is thinking outside the box. Hasn’t COVID shown us how adaptable we can be? Now we can be adaptable in a way that adequately prepares a planet with almost 8 billion people who invariably interact and intermingle, and must therefore cooperate both inter- and intra-country.
Undoubtedly, there will be a “new normal,” with more work from home, less business travel, even more e-commerce — more hybrid space, more hybrid learning and transformed commercial space. The pandemic has lasted too long to not engrain new behaviors. Perhaps we can take each of these new behaviors and use them to catapult some innovations that put us ahead. For jobs in which it is possible, even partial work from home could reduce traffic congestion and carbon emissions. High-speed rail like the proposed Front Range rail could not only further reduce emissions, they could be a stimulative infrastructure investment that creates jobs. The same can be said about wind and solar investments in our windy and sun-soaked state. Bureau of Labor projections from the last several years state that wind turbine technicians and solar panel installers will be two of the fastest growing occupations. Transforming energy is also a great opportunity to revamp our power grids and solidify a sustainable, self-sufficient power source indefinitely while simultaneously creating jobs.
All of this requires the ability and incentive to innovate, which brings up a couple of other structural challenges. I would argue the ability to innovate is hampered by a U.S. educational system that needs to transition to today’s economy. It’s not that educators and administrators are not working hard. It’s that our economy has moved along faster than education has been able to keep up. That has perpetuated a negative feedback loop in terms of the aforementioned income inequality. The incentive to innovate is also hampered, but in this case, it’s ironically hampered by the capitalistic structure that originally nurtured innovation. Entrepreneurship has been declining in the U.S. over the past few decades for a host of reasons. Would-be entrepreneurs are reticent to leave jobs with health care benefits. Most entrepreneurs are young and have onerous student debt (which is now at $1.7 trillion, only behind mortgage debt). We have mammoth companies that have almost monopolistic market share with huge economies of scale making the barriers to entry for startups often insurmountable. If K-12 and higher education can go online on a dime, we can audit today and tomorrow’s job openings and build curricula around those skill sets. Government can also catch up with today’s technology platforms that enable monopolistic-like behaviors and level the playing field with well-established anti-trust laws. Perhaps large employers could also be mandated to pay for nutritional or health benefits for their employees who technically qualify for those benefits at the expense of taxpayers. After all, those transfer payments are only increasing as the population ages and as income inequality grows. And those transfer payments are much of the reason U.S. debt is now at levels that match our total annual output.
Similarly, if health care can fully embrace telehealth for routine care in record time, can we not find our way to universal health records, streamlined administration and health insurance systems that incentivize preventive health instead of (expensive) curative care both for providers and patients, and therefore better outcomes?
Experts in various fields who are smarter than I am could easily add to this list. Even my humble reflections may seem lofty and deemed unrealistic, but I don’t see why we can’t get out of our own way and overcome these structural maladies. Beyond creating jobs (necessary) and leading as a nation (desirable), I believe we are at a fork in the road. Today’s actions may very well determine whether humans thrive while defining their surroundings, or whether our surroundings will define a subpar human existence.
Tatiana Bailey, Ph.D., is the executive director of UCCS Economic Forum.
The UCCS Economic Forum just published its 2020-21 annual booklet, which you can find here: https://uccseconomicforum.com/booklets/.