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Lockdown or a drip feed of Covid restrictions? One path is better for the economy – CNN

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The crisis, which hit Europe for the first time in early spring, is back — but this time around, many people feel that locking down society is too high a price to pay. Yet most medical and economic experts CNN spoke to agree that, in the long run, a short lockdown is better than a constant battle to contain the pandemic.
British Prime Minister Boris Johnson is one of those trying to avoid a second nationwide lockdown in England.
Senior scientific experts advised the United Kingdom leader to impose an immediate two-week national lockdown to curb the spread of Covid-19 in September. Instead, on Monday, Johnson unveiled a limited system of coronavirus restrictions to be imposed locally, if needed, and once again encouraged those who can work from home to do so.
Robert Jenrick, the UK housing minister, told the BBC on Tuesday that Johnson’s government had “to balance protecting people’s lives,” with keeping people in education and employment.
As a result of its spring lockdown, the UK economy shrank by 20% in the second quarter, pushing it into the deepest recession of any major developed economy. Johnson is now under pressure from some members of his Cabinet to keep the economy open, even as winter looms and coronavirus cases rise.
But some experts believe that limited restrictions have little impact on the virus and hurt the economy more over time.
“The number one priority is getting control of the virus,” Andrew Goodwin, chief UK economist at advisory firm Oxford Economics, told CNN. “And the quickest, [most] aggressive, way you can do that is the best thing for the economy.
“The worst thing is to have this bubbling for a long time, that’s the most dangerous thing,” he said. “Ultimately the longer this goes on, the worse it is for the economy and for public finances.”
Goodwin said a short “circuit-breaker” lockdown, as recommended by the scientists advising the UK government, could cause GDP to contract by 2.5% in the fourth quarter of 2020.
“That would be a relatively small hit now, compared to what we had before, and it would be worth it — if it worked,” he said, adding: “Piecemeal solutions, delivered late, lead to real economic damage. And if you let the virus rip, people take their matters into their own hands. People stop getting into social contact situations.”
China shows what’s possible when lockdowns are combined with population tracking policies intended to contain the virus. The world’s second-largest economy locked down hard earlier this year, and the government has spent hundreds of billions of dollars on stimulus efforts. It was the only major world power to avoid a recession this year.
But that success has proved difficult for other countries to replicate, especially in places where leaders do not wield the same level of control over their populations as Beijing.
Johnson’s approach in England is by no means unique. The Irish government last week rejected a call by health chiefs to reimpose a nationwide lockdown, despite a sharp surge in cases.
The country’s Prime Minister, Micheal Martin, instead tightened coronavirus restrictions across the country for three weeks, citing the need to protect companies from more damage.
“It is important to understand we are in a very different situation to last March,” Martin said on October 5. “Businesses are beginning to recover and vital public health services are still backlogged. Severe restrictions now would have a very damaging impact which those services and those businesses may not be able to recover from.”
But just across the border, Northern Ireland’s executive has taken a far more aggressive strategy. First Minister Arlene Foster announced on Wednesday that schools, pubs and restaurants would close for four weeks, in an effort to tackle spiking cases. The First Minister of Wales Mark Drakeford told UK’s Sky news that the country was also considering a short national lockdown.
Cesar, from Portugal, stands in front of his bar, in Paris, on October 6, 2020 after all bars in the city were closed under new Covid-19 restrictions.
In France, many of those working in the hospitality industry fear a second lockdown may be on the way.
Such is the pressure from the sector that officials have allowed restaurants to stay open in Paris and reopen in the city of Marseille, despite both areas being zones of “maximum alert,” meaning Covid-19 case rates there are high. Bars and cafes remain closed in both cities.
“We need to stop thinking that there is an opposition between economy and public health,” Catherine Hill, a prominent French epidemiologist, told CNN.
“If we solve the coronavirus crisis, then we solve the economic crisis. In China, they controlled the epidemic and the economy returned. The aim is simple: To get rid of the virus, so that life gets back on track.”
French Prime Minister Jean Castex indicated this week that more restrictions were on the way. “We are taking measures based on the epidemic situation,” he told news channel France Info on October 12.
“No options are to be excluded considering the situation we see in our hospitals.”
Jonathan Portes, a professor of economics at King’s College London, said “a successful strategy to suppress the virus is the best thing for the economy” even if it means the government needs to borrow more to fund support for businesses and households.
“We have no problem borrowing the amount of money [needed],” Portes said. “There’s no affordability constraint. Being able to afford a second lockdown is simply not one of the top five economic problems facing the UK right now.”
Robert West, professor of health psychology at University College London, said a future national lockdown in the UK is likely regardless of ongoing worries about the shock it will deliver to the economy because cases are rising so quickly.
But he says the key is for the government to use the time spent in lockdown to improve systems that can help control the virus once the restrictions are lifted.
“It would be a complete waste of time if we locked down without developing a test and trace system,” he told CNN.
The four nations of the UK do have test and trace systems but they have been criticized in recent months over perceived administrative errors, delays and backlogs. The government has defended the systems.
“Since it launched, NHS Test and Trace has contacted 700,000 people who may otherwise have unknowingly spread coronavirus and told them to isolate,” a Department of Health and Social Care spokesperson told CNN.
Lock down or not, the fate of the economy rests on the ability of governments to control the virus as winter approaches.

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Amid Pandemic, Here's What Researchers Have Learned About The Economy – NPR

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Editor’s note: This is an excerpt of Planet Money‘s newsletter. You can sign up here.

Michael Ciaglo/Getty Images

COVID-19 has been a massive disaster. But it has also been like a massive natural experiment. During the last nine months, we’ve learned a lot about the coronavirus, its economic effects and effective interventions to help manage the pain of another wave. So we decided to sum up some of the economic research.

Poverty … fell?

In April, the unemployment rate hit 14.7% — the most disastrous figure since the Great Depression. Over 20 million Americans had lost their jobs or been furloughed. And yet something crazy happened — the national poverty rate actually declined.

That’s one of the findings of a study by economists Jeehoon Han, Bruce D. Meyer and James X. Sullivan, who crunched data from the Census Bureau about income and poverty during the coronavirus pandemic. They found that the poverty rate fell from 10.9% in January and February to 9.4% in April, May and June. They credit the decline to government action, especially with the CARES Act, which massively increased unemployment benefits and sent large checks to middle- and low-income Americans. Had the government not done this, they found, poverty would have risen over 2.5 percentage points.

Since the expiration of some of the federal government’s assistance this summer, the poverty rate has been ticking back up, erasing the decline during the first phase of the pandemic.

The mighty are getting mightier

A few months ago, we published a newsletter that explained why the crisis was making powerful corporations even more powerful. As consumers sheltered in place, they cut spending at small businesses and shifted more spending online — benefiting megacorporations like Amazon. On top of that, the government seemed to be buttressing big corporations while leaving many small and midsize businesses scrambling. But another factor has been playing in the big guys’ favor: recruiting opportunities.

Economists Shai Bernstein, Richard R. Townsend and Ting Xu analyzed data from AngelList Talent, a job search site for tech and startup jobs, to see how the pandemic has affected job searches. They found that “job seekers shifted their searches toward larger firms and away from early-stage ventures” and were more open to lower salaries and a broader range of positions. When it comes to recruiting talent, they found, this shift has benefited large, more established companies while hurting smaller upstarts. They conclude that this “flight to safety” of qualified job seekers during the downturn has hurt entrepreneurship and competition.

Office comeback?

According to Gallup, back in April, a jaw-dropping 51% of workers reported they were “always” working remotely. A cool study by Steve Cicala shows how this could be seen in electricity use, with commercial and industrial buildings — where we have traditionally worked — using between 12% and 14% less electricity than they would have during normal times and residential buildings using an average of 10% more.

But the remote-work wave is already receding. Gallup’s most recent survey, from mid-September, found the share of people who report “always” working remotely has shrunk to 33%. Expect power bills at office parks and skyscrapers to start climbing.

COVID-19 is changing minds

Economists Alex Rees-Jones, John D’Attoma, Amedeo Piolatto and Luca Salvadori conducted a survey of over 2,500 Americans to see how COVID-19 has affected their opinions of government programs. They found “real and perceived exposure to the consequences of COVID-19 strongly predict support for long-term expansions to unemployment insurance and government-provided healthcare.” This is true, they found, even when controlling for people’s political beliefs and demographic characteristics. Rees-Jones says, “Compared to the average survey respondent, a respondent facing a very large number of county deaths (more than 95% of other respondents) is 6.3 percentage points more likely to support long-term expansions to unemployment insurance and 5.8 percentage points more likely to support long-term expansions to government-provided healthcare.” In short, it seems that COVID-19 has increased political support for bigger government.

PPP didn’t work — or did it?

The Paycheck Protection Program was the federal government’s big effort to save small businesses. It provided grants and loans to help them survive the pandemic. Economists are still debating whether PPP was effective. Some studies, including one by Raj Chetty, John N. Friedman, Nathaniel Hendren and Michael Stepner and another by Christopher Neilson, John Eric Humphries and Gabriel Ulyssea, found little or no evidence that the program helped save jobs at small businesses. Others, including one by Robert P. Bartlett III and Adair Morse and another by Alexander W. Bartik, Zoe B. Cullen, Edward L. Glaeser, Michael Luca, Christopher T. Stanton and Adi Sunderam, found that the program helped increase the probability that small businesses would survive the pandemic. This debate over the effectiveness of PPP in saving small businesses and jobs matters because it should inform what relief package comes next, if any.

Motorcycles can be dangerous

In early-to-mid August, almost half a million motorcyclists congregated in Sturgis, S.D., for an annual motorcycle event. It offered economists Dhaval M. Dave, Andrew I. Friedson, Drew McNichols and Joseph J. Sabia the opportunity to see the effects of a COVID-19 superspreader event.

The researchers used data from cellphones to measure the movement of people, along with data from the Centers for Disease Control and Prevention to measure the spread of the coronavirus. They found that by Sept. 2, about a month after the rally began, COVID-19 cases increased by approximately six to seven cases per 1,000 people in the county where the event was held. Meanwhile, they found that “counties that contributed the highest inflows of rally attendees experienced a 7.0 to 12.5 percent increase in COVID-19 cases relative to counties that did not contribute inflows.” Not everyone buys it. Researchers at Johns Hopkins University have criticized this study’s design, arguing that its findings should be “interpreted cautiously.”

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Are more steps needed to help the economy recover? – News 1130

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Skills for the new economy – The Globe and Mail

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Event summary produced by The Globe and Mail Events team. The Globe’s editorial department was not involved.

As the digital transformation gains velocity though the pandemic, business leaders are assessing the skills most essential for future-ready workforces. The Globe and Mail hosted a webcast on October 13 to bring business and academic leaders together to discuss the knowledge employees will need to succeed in the shifting economy. The webcast was presented with support from Athabasca University. Sean Stanleigh, head of The Content Studio at The Globe and Mail, moderated the panel discussion.

Highlights from the discussion appear below the webcast recording.

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Highlights from the discussion:

1). The nature of work is changing

Much of the work we currently do is process or task focused but that will change with the development of technologies such as artificial intelligence (A.I.), said Joe Cox, Canada research chair in digital disruption and organizational transformation with Athabasca University. With A.I. in the picture, they will shift their focus to figuring out the business problems that need solving and how best to pose these problems to the technology systems. The role of managers will also change, he added, skewing away from their current priority of predicting what will happen in the future, to making good judgements.

2). Training is vital for success

The digital economy requires individuals who have specific technology skills, especially in the area of cybersecurity, said Claudette McGowan, global executive officer for cybersecurity with TD Bank. She pointed out the skills shortfall in cybersecurity and noted it could be a good opportunity for mid-career individuals to pivot into a growing field by taking training at an academic institution or privately. She said reverse mentorships are also valuable, providing an opportunity for more senior staff to shore up their skills in emerging technologies, social media and data analytics.

3). Soft skills and micro-skills will dominate

Nicole Verkindt is a tech entrepreneur and founder of OMX, a procurement technology company. She said new hires at OMX fall into two camps. The first relates to soft skills, including judgement ability, in order to interpret data from technology programs. Diversity of backgrounds and experiences is also important. The second area relates to specific skills. In the past, an undergrad degree in business might be sufficient to achieve a job in marketing, for example. Increasingly, however, she is looking for candidates with niche skills, such as experience with HubSpot or data analytics tools. An entrepreneurial mindset is also highly valued, she added.

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Watch the full webcast above for specific examples of the knowledge, experience and skills of most importance for success in the digital economy.

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