As the world makes its way through the coronavirus pandemic together, questions are starting to surface about what the post-coronavirus global economy is going to look like.
Among those questions is an obvious one: how many jobs that were lost due to the virus are going to remain permanently lost and, conversely, how many people will recover the jobs they once had?
The answer looks grim. While there is hope that global financial stimulus could help people head back to work once the pandemic runs its course, there is a very real chance of “lasting damage” in many sectors, according to Bloomberg.
Fed chair Jerome Powell predicted last week that there will be “well into the millions of people who don’t get to go back to their old job.” He continued: “In fact, there may not be a job in that industry for them for some time.”
Bloomberg has predicted that 30% of U.S. job losses between February and May were a result of reallocation shock. It suggests a swift labor market recovery, but one that will ultimately level off and leave millions unemployed.
Among those most at risk are jobs in hospitality, retail, leisure, education and health. Brick and mortar retailers are also even further in the crosshairs of online retailers than they were prior to the pandemic. Hilariously, however, Bloomberg economists say the “markets are already pricing in the risk”.
“50% of U.S. job losses come from the combination of lock down and weak demand, 30% from the reallocation shock, and 20% from high unemployment benefits,” Bloomberg found.
A report by the Becker Friedman Institute at the University of Chicago estimated 42% of layoffs that occurred as a result of the pandemic will be permanent.
Nicholas Bloom, professor of economics at Stanford University who worked on the study said: “There’s a massive reallocation shock. The recession hits different sectors differently. Some benefit and some fall.”
Similarly, The Peterson Institute for International Economics said last week that the shock of the virus may necessitate even further government intervention, including wage subsidies. The Organization for Economic Cooperation and Development said last week that those laid off should be afforded government job training, in order to help a shift in industries, if necessary.
Sharan Burrow, General Secretary of the International Trade Union Confederation, concluded: “The pandemic has exposed the fault lines that already existed for working people and the economy. The ‘new normal’ requires a new social contract between governments and their citizens with the backing of the international community.”
In recent decades, flu season has often peaked sometime from January to March, and this is a major driver in total deaths. The averagedaily number of deaths from December through March is over eight thousand.
So far, total death data is too preliminary to know if there has been any significant increase in total deaths as a result of COVID-19, and this is an important metric, because it gives us some insight into whether or not COVID-19 is driving total death numbers well above what would otherwise be expected.
Indeed, according to some sources, it is not clear that total deaths have increased significantly as a result of COVID-19. In a March 30 article for The Spectator, former UK National Health Service pathologist John Lee noted that the current number of deaths from COVID-19 does not indicate that the UK is experiencing “excess deaths.” Lee writes:
The simplest way to judge whether we have an exceptionally lethal disease is to look at the death rates. Are more people dying than we would expect to die anyway in a given week or month? Statistically, we would expect about 51,000 to die in Britain this month. At the time of writing, 422 deaths are linked to Covid-19—so 0.8 per cent of that expected total. On a global basis, we’d expect 14 million to die over the first three months of the year. The world’s 18,944 coronavirus deaths represent 0.14 per cent of that total. These figures might shoot up but they are, right now, lower than other infectious diseases that we live with (such as flu). Not figures that would, in and of themselves, cause drastic global reactions.
How do these numbers look in the United States? During March of 2020, there were 4,053 COVID-19 deaths according to Worldometer. That is 1.6 percent of total deaths in March 2019 (total data on March 2020 deaths is still too preliminary to offer a comparison). For context, we could note that total deaths increased by about four thousand from March 2018 to March 2019. So for March, the increase in total deaths is about equal to what we already saw as a pre-COVID increase from March 2018 to March 2019.
As Lee notes, total COVID-19 deaths could still increase significantly this season, but even then we must ask what percentage of total deaths warrants an international panic. Is it 5 percent? Ten percent? The question has never been addressed, and so far, a figure of 1 percent of total deaths in some places is being treated as a reason to forcibly shut down the global economy.
Meanwhile there is a trend toward to attributing more of those pneumonia deaths to COVID-19 rather than influenza, although this doesn’t actually mean the total mortality rate has increased. The CDC report continues: “the percent of all deaths with Influenza listed as a cause have decreased (from 1.0% to 0.8%) over this same time period. The increase in pneumonia deaths during this time period are likely associated with COVID-19 rather than influenza.” This doesn’t represent a total increase in pneumonia deaths, just a change in how they are recorded.
This reflects an increased focus on attributing deaths to COVID-19, as noted by Lee:
In the current climate, anyone with a positive test for Covid-19 will certainly be known to clinical staff looking after them: if any of these patients dies, staff will have to record the Covid-19 designation on the death certificate—contrary to usual practice for most infections of this kind. There is a big difference between Covid-19 causing death, and Covid-19 being found in someone who died of other causes. Making Covid-19 notifiable might give the appearance of it causing increasing numbers of deaths, whether this is true or not. It might appear far more of a killer than flu, simply because of the way deaths are recorded.
Given this rush to maximize the number of deaths attributable to COVID-19, what will April’s data look like? It may be that COVID-19 deaths could then indeed number 10 or 20 percent of all deaths.
But the question remains: will total deaths increase substantially compared to April 2019 or April 2018? If they don’t, this will call into question whether or not COVID-19 is the engine of mortality that many government bureaucrats insist it is.After all, if April’s mortality remains “about the same” as the usual total and comes in around 230,000–235,000, then obsessive concern over COVID-19 would be justified only if it can be proven April 2020 deaths would have plummeted year-over-year had it not been for COVID-19.
Update:
Meanwhile the CDC is instructing medical staff to report deaths as COVID-19 deaths even when no test has confirmed the presence of the disease. In a Q and A on death certificates published by the CDC on March 24, the agency advises:
COVID-19 should be reported on the death certificate for all decedents where the disease caused or is assumed to have caused or contributed to death. Certifiers should include as much detail as possible based on their knowledge of the case, medical records, laboratory testing, etc. If the decedent had other chronic conditions such as COPD or asthma that may have also contributed, these conditions can be reported in Part II. [emphasis in original.]
This is extremely likely to inflate the number of deaths attributed to COVID-19 while pulling down deaths attributed to other influenza-like illnesses and to deaths caused by pneumonia with unspecified origins. This is especially problematic since we know the overwhelming majority of COVID-19 deaths occur in patients that are already suffering from a number of other conditions. In Italy, for example, data shows 99 percent of COVID-19 deaths occurred in patients who had at least one other condition. More than 48 percent had three other conditions. Similar cases in the US are now likely to be routinely reported simply as COVID-19 cases.
Unfortunately, because total death data is not reported immediately, we have yet to see how this plays out.
We do know historically, however, that deaths attributed to flu and pneumonia over the past decade have tended to make up around five to ten percent of all deaths, depending on the severity of the “season.” Last week (week 14, the week ending April 4) was the first week during which COVID-19 deaths exceeded flu and pneumonia deaths, coming in at 11 percent of all death for that week. The prior week, (week 13, the week ending Mar 28) COVID-19 deaths made up 3.3 percent of all deaths.
Until we have reliable numbers on all deaths in coming weeks, it will be impossible to know the extent to which COVID-19 are “cannibalizing” flu and pneumonia deaths overall. That is, if the COVID-19 totals skyrocket, but total deaths remain relatively stable, than we might guess that many deaths formerly attributed simply to pneumonia, or to flu, are now being labeled as COVID-19 deaths. Potentially, this could also be the case for other patients, such as those with advanced cases of diabetes.
SANTA BARBARA, Calif. – The Employment Development Department (EDD) of California is providing workers who are unable to work because of the coronavirus with various insurance claims they may be eligible for.
Governor Gavin Newsom informed the public about these claims on Twitter Monday afternoon.
If your hours have been reduced or your employer has shut down operations due to Coronavirus — you can file an Unemployment Insurance claim.
The Unemployment Insurance claim provides partial wage replacement benefit payments to workers who lose their job or have their hours reduced, through no fault of their own.
The department says workers must remain able and available and ready to work during their unemployment for each week of benefits claimed and meet all other eligibility criteria. Eligible individuals can receive benefits that range from $40-$450 per week.
The department is also reminding individuals that they can file a Disability Insurance claim if they become sick or quarantined with the coronavirus. This claim, which is available for non-work-related illness, injury or pregnancy, provides short-term benefit payments who are losing money due to their health condition.
In order to file for this claim, the worker’s claims must be certified by a medical professional. Benefit amounts are listed as being around 60-70 percent of wages (depending on income) and would range from $50-$1,300 a week.
Those who are unable to work because they are caring for someone sick with the coronavirus are able to file a Paid Family Leave claim. This claim provides up to six weeks of benefit payments to workers who are losing wages while caring for a family member with a serious illness.
The benefits from the Paid Family Leave claim would cover 60-70 perfect of the worker’s wages (depending on income) and would range from $50-$1,300 a week as well.
For more information from the EDD about potential insurance claims related to the coronavirus, you can visit their website here.
It’s not just in China where the effects of the novel coronavirus are being felt – it’s in China Towns situated worldwide. Fear is gripping people around the world and, coupled with the uncertainty that is inevitable with the WHO and world leaders dragging their feet, it is keeping people out of Chinese businesses.
As Chinese citizens of other countries try to go about business as usual in the midst of what is likely a growing pandemic, business is collapsing. Lily Zhou’s Chinese restaurant in Australia, for instance, has seen business fall 70%, according to Bloomberg. It now has a board out front where “The restaurant has been sanitized!” is written in Chinese.
Zhou says at this rate, she can only stay in business “at most three months”.
The affect on the local economy has been so bad that the neighborhood of Eastwood is planning on setting up a A$500,000 assistance fund.
But the affects aren’t just being felt in Australia. There are Chinatowns and Chinese businesses in places like Sydney, New York and San Francisco that are all feeling the impact.
99 Favor Taste, a hotpot and BBQ restaurant in lower Manhattan, is now seating customers immediately. The restaurant usually has a half hour wait on weekdays to get a table. “Booths are empty,” said manager Echo Wu.
Wu believes that the fear keeping people out of Chinese businesses is “irrational”. He says customers have even gone so far as to phone ahead to check and make sure the food wasn’t being imported directly from China.
Wu said: “They may have a bias toward Chinese restaurants now. I hope people can be more reasonable. After all, there’s no cases in town yet.”
In Toronto, it’s a similar scene. Business at the Rol San Dim Sum restaurant is down as much as 30% and the sidewalks of Chinatown are quiet. The restaurant’s manager said it was “of course” due to the coronavirus.
At the Chinatown in Manchester, U.K., students stopped showing up after returning from the Chinese New Year holiday. The head of the local business association said: “There are less visitors, less customers. They’re really, really suffering — at the moment we haven’t come up with any solution yet. The group is discussing options such as opening a weekend market with free food tasting and discounts to bring back clients.”
San Francisco’s Chinatown has seen its lunch rush “evaporate”. One business owner, Henry Chen, said: “Usually we have a line out the door. There are less people on the street. Lunch, dinner, breakfast, there is no business.”
Philip Wu, who manages a hot pot restaurant in Sydney’s Chinatown, says that lifting travel restrictions is crucial for business.He has seen a 60% drop in business and has asked all 100 of his workers to cut their hours to four days a week.
“If the government says ‘Okay, we’ll stop the ban on the flights, and the people can travel to Australia,’ then I think the business will go up very quickly, because tens of thousands of Chinese people will be coming back,” he said.
But that looks extremely unlikely. And these are still just minor examples compared to the disruption in places like China and Hong Kong, where schools are closed and people are stuck in their apartments under quarantine. These types of lockdowns are now spreading to Italy and other neighboring countries.
And, unfortunately, we feel like it’s going to get worse before it gets better.
As the world makes its way through the coronavirus pandemic together, questions are starting to surface about what the post-coronavirus global economy is going to look like.
Easy Money 