AFTER THE PANDEMIC OUR LIVES WILL IMPROVE

 

In 2016, the Stanford University historian, Walter Scheidel, published a lengthy and somber book. His central thesis was that throughout recorded history the most horrendous historic shocks resulted in the most powerful transformations to society, including income leveling. Scheidel’s work traces innumerable examples of warfare, revolution, state failures and pandemics to show an unmistakable pattern.  In the aftermath of each catastrophic event, societies dramatically changed and the income gap between rich and poor diminished. (The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, Walter Scheidel, 2016)

Some of the more recognizable incidents covered by Scheidel were the Roman collapse, the Black Death, the Thirty Years War, the Great Depression and the Second World War.  Following each example, societies were reordered and wealth underwent drastic leveling.

Scheidel had no way of knowing that within three years of his publication date, COVID-19 would engulf the world and provide him with a modern laboratory to test his theories. In recent interviews, Scheidel has concluded that the 2020 Pandemic will not have the disruptive effect of the Black Death where a third of humanity lost their lives.   Nor has the economic damage been as severe as the Great Depression. 

While the recent virus was not as unsettling as other catastrophic events, major transitions are taking shape. The American economy is clearly on a vaccine and stimulus-induced upturn following the pandemic slump. This recovery provides the opportunity to establish many social programs that were only pipe dreams before the pandemic.  Moreover, social and work related changes have occurred that no one could have predicted. The remainder of this commentary will summarize these transformations, which are materializing both with and without governmental intervention.

First, a look at post-pandemic government initiatives.  In the past, America has not been able to turn its economic strength into progress on a host of social problems such as education, healthcare and the environment.  There is hope that this time will be different.

The Rescue Plan. On March 11, 2021, President Biden signed a 1.9 trillion dollar relief bill that provided for $1,400 per-person checks, increased the Child Tax Credits, extended unemployment insurance; provided small business support and lowered health care insurance premiums.

The Jobs Plan.  President Biden’s jobs initiative is an infrastructure plan on steroids. It would repair highways, rebuild bridges, upgrade ports and modernize airports and transit systems.  It would deliver clean drinking water, a renewed electric grid and high-speed broadband to all Americans. The effort includes the building and retrofitting of more than 2 million homes and commercial buildings. Schools and child-care facilities would be modernized, along with veterans’ hospitals and federal buildings.

The Jobs Plan includes proposals to create jobs and raise wages for crucial homecare workers. Essential manufacturing would be revitalized. U.S. supply chains would be made less vulnerable to war and future catastrophes. Extensive job training programs would be developed for the information age economy. Lastly, the overall goal is to create good quality jobs that pay prevailing wages.

The Families Plan. The third prong of the Biden “renaissance” for America is a significant investment in our children, our families and our economic future. Much of the plan includes programs that have existed in other western nations for decades.

On education there are proposals to provide universal high quality pre-school and two years of free community college. Direct support will be provided so that no family spends more than seven percent of their income on child-care. A national paid family and medical leave program is also part of the proposal.

The Jobs and Families Plans will require Congressional action to become law.  Recent polls demonstrate that a majority of both plans have overwhelming support among Americans.

In addition to the above, there are important post-pandemic transformations that have occurred without governmental involvement. Each will have a profound effect on the way we live and work.   

● The U.S. personal saving rate, the percentage of people’s income remaining each month after taxes and spending, skyrocketed from a 7% average to a record 32.2% in April 2021.

● The middle class gained wealth as its largest asset, the family home, was worth 24% more in May than a year ago.

● Business productivity has increased based on cost savings during the pandemic and the newfound benefits of digitization.  For example, in healthcare the adoption of telemedicine during the pandemic should drive productivity gains in medicine for years.

● Employees have gained more empowerment in deciding when, where and how they perform their work responsibilities. This happened after the pandemic created a natural experiment in letting them work from home.

● In order to attract and retain good employees, employers must now offer a living wage and benefits like paid sick leave.

● A third of Americans reported positive impacts on their relationships, as they were able to spend more time with spouses and children.

● Two-thirds of Americans report making lifestyle changes since the pandemic, including more time spent outdoors, more exercise and improved sleep patterns.

There is no denying that the past year has been one of loss, hardship and suffering for many of our fellow citizens. However, the beneficial events predicted by Walter Scheidel following a global catastrophe have begun to appear.  We must not squander this opportunity to improve our long-term economic and social standing.