This article, written by Loren Falkenberg, University of Calgary and Jillian Walsh, University of York, originally appeared on The Conversation and has been republished here with permission:
What does a post-pandemic economy look like? Health researchers are indicating that managing this virus will be a long-term game. That means COVID-19 will impact the economy for months, maybe years, but reopening businesses cannot wait until the virus is completely eradicated.
Estimated lost wages from the locked-down Canadian economy range between $3 billion to $6 billion per month. Many Canadians are worrying about more than infection; concerns about affording rent and everyday necessities are pervasive. Restarting businesses is not only important for the social well-being of Canadians but also for restoring investor confidence in the market and generating much-needed tax revenue.
Germany has just started to make small steps by reopening small shops. Understanding when and how to reopen businesses may be the most challenging task of this pandemic. Reopening too soon risks a second wave of infections and a far greater negative economic impact.
However, not allowing companies to promptly reopen will lead to a deep recession and is already fuelling societal unrest. Successfully re-establishing businesses in a COVID-19 economy requires government, health-care and business leaders working together to implement a phased return to employment.
The first phase is the one in which we now find ourselves: working from home or unemployed. Many professional and business-to-business companies have learned to facilitate working from home using web-based technology over the past few weeks.
This has been critical in reducing COVID-19 transmission, but it’s not sustainable in the long term. So what’s next?
Phase 2: Resuming small-scale operations
The next phase is a suppression approach involving reopening and supporting businesses where virus transmission can be easily controlled.
Workplaces that have adequate space for physical distancing, easy access to soap and water and the ability for continuous cleaning of all public areas should be encouraged to reopen. These businesses can learn from those that remained open during the lockdown.
This might require that businesses operate with reduced hours until they can assure regular and thorough cleaning of their workplaces.
In a pandemic, short-term age discrimination may also be justified. Employers should be encouraged to rehire younger people after they’ve been tested, while governments continue to provide financial support to older workers and those with chronic health conditions, since younger people are less likely to be hospitalized due to COVID-19 infection.
Success in this early phase is dependent on rapid testing of employees displaying symptoms, including a potential self-testing kit and the quick return of results. Employers must keep reminding employees to stay home if they are not feeling well, while governments must continue to provide easy and quick access to insurance for lost wages.
In the meantime, employees have a responsibility to limit their social exposure when they’re not at work. The goal must be to keep the transmission rate a low as possible.
Phase 3: Expanding to social events
The next phase should begin within a month of lowering the infection rate to acceptable levels, a number that still hasn’t been established. There is ongoing development of models of transmission in different-sized and types of groups, and as more is learned on how to ensure low infection rates, businesses and organizations can expand operations carefully.
This could mean allowing more customers into stores and restaurants at one time, allowing small social gatherings and reopening some education and recreation facilities. Professional sports leagues could resume, either with relatively few or no spectators. Whatever the expansion looks like, maintenance of new cleaning and social and physical distancing practices needs to be ensured.
Phase 4: Domestic tourism
The final phase should focus on rebuilding domestic tourism and Canada’s reputation as a safe country for its citizens to explore.
Airlines and hotels should have appropriate cleaning and hygiene practices ready to go. Reopening the border could be considered for those countries that have also controlled transmission of the virus.
During this phased-in approach, governments need to go beyond providing financial stimulus packages. Businesses also need to be supported in training workers on safety and sanitation precautions, and must facilitate the development of technologies that monitor workplace social distancing and tracking of interactions that could lead to virus transmission.
Governments and health-care experts must also continually monitor and provide updates on transmission rates. Success is dependent on everyone being informed.
Public trust in business is critical. Canadians have effectively responded to this pandemic. To ensure ongoing co-operation, they need to know there’s plan for getting people back to work.
COVID-19 will not be the last health threat to the Canadian economy. Our focus needs to shift from controlling risks through economic shutdowns to managing health-related threats in the workplace. Otherwise disastrous economic downturns will continue.
The response to COVID-19, in fact, should become a learning opportunity on how to develop more illness-proof economies.
Loren Falkenberg, Senior Associate Dean, Business, University of Calgary and Jillian Walsh, Graduate Student, Health Economics, University of York
Calm before the storm for Japan suicides as coronavirus ravages economy – The Province
“There are so many people who want to connect and talk to somebody, but the fact is we can’t answer all of them”
TOKYO — The phones at the Tokyo suicide hotline start ringing as soon as it opens for its once-weekly overnight session. They don’t stop until the lone volunteer fielding calls from hundreds of people yearning to talk signs out early the next morning.
Both operating days and volunteer numbers at the volunteer-run Tokyo Befrienders call center have been cut to avoid coronavirus infection, but the desperate need remains.
“There are so many people who want to connect and talk to somebody, but the fact is we can’t answer all of them,” center director Machiko Nakayama told Reuters.
Health workers fear the pandemic’s economic shock will return Japan to 14 dark years from 1998 when more than 30,000 people took their lives annually. With the grim distinction of the highest suicide rate among G7 nations, Japan adopted legal and corporate changes that helped lower the toll to just over 20,000 last year.
Worried the current crisis will reverse that downward trend, frontline workers are urging the government to boost both fiscal aid and practical support.
“We need to take steps now, before the deaths begin,” said Hisao Sato, head of an NGO that provides counseling and economic advice in Akita, a northern prefecture long known for Japan’s worst suicide rate.
National suicides fell 20% year-on-year in April, the first month of the country’s soft lockdown, but experts said that was likely due to an internationally recognized phenomenon in which suicides decrease during crises, only to rise afterwards.
“It’s the quiet before the storm, but the clouds are upon us,” Sato said.
Prevention workers see echoes of 1998 when a sales tax hike and the Asian economic crisis first drove annual suicides above 30,000, then to a peak of almost 34,500 in 2003.
Economic circumstance is the second biggest reason for suicides, behind health, according to 2019 police data, which also shows that men are nearly three times more likely to kill themselves than women, and most are in the 40-60 age group.
The current crisis, which is forecast to shrink Japan’s economy 22.2 percent this quarter, is especially dangerous for cash-strapped small and medium-sized businesses for whom government subsidies might not arrive in time.
“It’s tough. A lot of people are really worried,” said Shinnosuke Hirose, chief executive of a small human resources firm that has lost nearly 90% of its business. “It’s like waiting at the execution grounds to see if they survive or not.”
A Health Ministry official in charge of suicide policy told Reuters his department planned to ask for more money from a $1.1 trillion central government stimulus package to help fund measures such as extra hotlines. The official, who declined to be named as he was not authorized to speak on the record, added there were limits to central government action and local efforts were crucial.
Some believe the steps taken in recent years to bring down the suicide rate will hold firm through the current crisis, but others are not so sure.
Kyoto University’s Resilience Research Unit has predicted 2,400 more suicides for each 1% rise in unemployment. If the virus subsides in a year, unemployment could peak at around 6% by March, lifting annual suicides to around 34,000, it estimated. If pandemic conditions persist for two years, a rise to 8% unemployment by March 2022 would see suicides spike over 39,000.
“Of course social support is important … but they won’t be able to ramp this up suddenly,” said unit director Satoshi Fujii. “Preventing bankruptcies will start helping immediately.”
At the Tokyo Befrienders call center, the phones continue to ring. The formerly nightly service now opens on Tuesdays only, with one volunteer a shift instead of four, although it plans to reinstate another day in June.
“Everyone has tried hard to get through lockdown, but now they’ll reflect and think ‘why was I doing it? What hope do I have?’” Nakayama said. “At that time I think a lot could choose death.” (Reporting by Elaine Lies; editing by Jane Wardell)
Trump’s Economy Will Look Better Than You Think On Election Day – Forbes
Here’s some bad news for Democrats intent on unseating the Trump administration. While the current economic situation looks dire, a huge bounce back is forecast for this summer and will likely continue into the fall.
At least 12 economists see the economy growing at an annualized rate of at least 20% in the third quarter. Some even see it growing as fast 30% over the same period, according to a recent survey of multiple economists by The Wall Street Journal.
And it is just that sort of economic snap-back that could put President Trump back in the White House for another four years.
Things Look Bad Now
Currently, it might seem hard to see anything good in line for the Trump administration. Millions of people have been fired in a matter of a few weeks. The economy is expected to shrink by 17% in the three months through June, according to Trading Economics. And the death toll from the Covid-19 pandemic is rising. In short, it’s bad, and everyone knows that fact.
But it is the health of the economy that generally dictates how people vote. If there are plenty of jobs, inflation is low, and people feel better off than they did a four years ago, they’ll likely vote for more of the same. That’s what happened with Presidents Reagan and Clinton. Some readers will remember Clinton’s early 1990s campaign quip, “It’s the economy stupid.” That was true then and still is now.
The economic data from the last few weeks are so bad that Democratic Party operatives may be banking on the dire economy to ensure a landslide victory in the fall election. But that hope may soon evaporate as we enter the summer.
Economic Bounce Back This Summer
What probably matters more for many voters is what will happen in the few months before the November election, not the current situation. And that could surprise the world.
Ameriprise Financial AMP and Nomura Securities International both see an annualized growth rate of 30% in the three months through September, according to the WSJ survey. Another 10 similar institutions, such as CSFB, Scotiabank BNS and Natwest Markets, forecast the economy will expand by between 20% and 30%.
Other institutions see lower rates of growth and perhaps even continued contraction. The average growth estimate for the third quarter is around 9%, according to the WSJ survey.
However, as long as the lockdowns continue to get loosened, then growth estimates should continue to rise.
Normally an annualized growth rate of 3% would be considered a good reading and would likely come side-by-side with the sustained creation of millions of new jobs each year.
But growth rates of 20-30% are spectacular. Even 9%, the average second-quarter forecast, would be shockingly high in normal times. What’s more, if these forecasts are even vaguely accurate, the growth should create a load more jobs. Exactly how many is hard to judge because there hasn’t really been a precedent for an economic lockdown.
Growth Boom to Continue Through Year End
There is some more good news. According to the same WSJ report, the growth boom is set to continue in the fourth quarter. The highest estimate is for a bounce of 21.5%, with the average at a respectable 6.9%. Again, that continued growth should create another slew of new jobs, many of which will appear before the election.
So what? The likely rebound in economic growth could also help tilt the election toward incumbent President Trump.
A second Trump term could also be a further bullish factor for the stock market because of the administration’s decidedly pro-business approach to the economy and his effort to reduce regulations. In other words, investors should be watching this closely.
Doug Ford rejects regional approach to reopening Ontario's economy – Toronto Star
One size fits all.
That will be Ontario’s mantra for reopening the economy in the wake of the COVID-19 pandemic, insists Premier Doug Ford.
Even though the Greater Toronto Area accounts for 65.6 per cent of Ontario’s cases, leaving huge swaths of the province relatively unscathed, Ford is rejecting the regional approach of opening up as is being done in neighbouring Quebec, Manitoba and New York state.
“I have to follow science and the medical advice. I always have, I always will,” the premier said Thursday, emphasizing that provincial chief medical officer of health Dr. David Williams and other public health officials will make the call.
“I’ll take their advice and if Dr. Williams doesn’t think it’s the right thing to do, then I’m following his advice. I have from the beginning. I’ll continue to follow it,” he said.
Ford admitted he is under a lot of pressure to expedite the opening of the economy in regions beyond the GTA.
There are far fewer coronavirus cases in Kenora, Algoma, North Bay, Parry Sound, Sudbury, Kingston, Renfrew, Huron-Perth, Prince Edward County, and most of southwestern Ontario outside the Windsor city limits.
“I hear it at cabinet, I hear it at caucus. I hear it all the time from our own members,” the premier said.
Indeed, Progressive Conservative MPPs from outside the Golden Horseshoe privately confide that they are feeling heat from their constituents.
“How am I supposed to keep telling businesses in my area to remain closed for what’s essentially a Toronto problem?” said one rural Tory MPP, speaking on condition of anonymity in order to freely discuss internal caucus discussions.
“At a certain point, we’ve got to reopen,” added the MPP, who personally lobbied Ford against the universal reopening approach.
But the premier, who began the first phase of reopening the economy last week when stores with street-front entrances were allowed to welcome customers, said “we just have to be cautious” to curb the spread of a virus that has killed 2,248 people in Ontario.
“On a long weekend in the summer, there’ll be half a million cottagers going up to the Muskokas, the Haliburtons, up to the cottage area — and they’re coming, primarily, they’re coming from the 905 and 416 area,” he said.
In Quebec, where 4,228 people have died from COVID-19, Premier François Legault has pushed a phased regional approach to opening.
Outside of Montreal, the epicentre of the pandemic in that province, much of the economy will be up and running next week, including indoor shopping malls.
“We have to continue to be careful because we cannot afford to have large increases in the next few days or weeks in the number of people in our hospitals in Montreal,” Legault said earlier this week.
In Manitoba, where only seven people have died of COVID-19, Premier Brian Pallister announced Tuesday that most businesses — including restaurants, bars, and gyms — will be open next week.
Pallister stressed “slow and careful movement in the direction of easing our restrictions is the right approach.”
New York state has suffered 23,282 deaths — more than 10 times as many as Ontario despite a population of 19.5 million compared to the province’s 14.5 million — but is pushing forward with phased regional reopening.
In New York, a region must meet seven different metrics before being allowed to move a broader stage of reopening, including a sustained decline in total hospitalizations over a three-day rolling average and a decline in deaths.
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Each region must have at least 30 per cent of its intensive care unit beds and 30 per cent of all hospital beds open and must meet diagnostic testing and contact tracing capacity.
Western New York, across the Niagara River from Ontario, currently meets all seven requirements for reopening selected businesses and services.
Earlier this month, Gov. Andrew Cuomo defended his plan.
“Close down everything, close down the economy, lock yourself in the home — you can do it for a short period of time, but you can’t do it forever.”
JOIN THE CONVERSATION
What do you think of the “one size fits all” strategy for reopening Ontario’s economy?
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