Part one of a two-part series.
You have to admire the resilience of the U.S. economy.
The COVID-19 pandemic caused the largest global recession in history. Twenty two million Americans lost their jobs.
But there are already plenty of signs of economic recovery. And, while no one would argue that the pandemic has been good for the economy, it may produce a few tangible benefits. Undoubtedly, the economy will be permanently changed — and some of the changes taking place will be for the better.
U.S. unemployment rate.
In spite of the pandemic, in spite of rioting and protests, in spite of political polarization, the unemployment rate has dropped to 8.2%. It took three years after the financial crisis to reach that level of unemployment. Earnings are down, but are better than analysts expected. And some sectors are performing even better than they did before the pandemic.
Manufacturing activity recently hit its highest level in 19 months and the housing market is even stronger than it was a year ago. Sales of existing homes jumped by a record 24.7% in July, according to the National Association of Realtors and were up 8.7% from July 2019 — before the pandemic.
And GDPNow, which was created by the Federal Reserve Bank of Atlanta, is estimating that the economy will grow by 30.8% in the third quarter, based on its model.
Reasons to be Optimistic
There are other reasons to be optimistic, even as we continue to wear masks in public and anxiously wait for the pandemic to finally end.
Employment is shifting. Anyone who has been laid off, furloughed or otherwise had their job affected by the pandemic will likely not see any silver in the lining of this very dark cloud, but the pandemic appears to have hastened a long-term shift in employment.
As Schwab reported, “There are a few somewhat-obvious employment sectors that are now under extreme pressure; including bricks-and-mortar retailers, restaurants/bars, recreation (including sports/concert viewings) and air travel. Collectively, they employed about 15% of the workforce pre-pandemic. Conversely, there are employment sectors likely to strengthen or even flourish; including grocery stores, technology, health care, manufacturing and residential construction. Currently, they employ about 32% of the workforce.”
It’s worth noting that many of the jobs being created in this shift are higher paying than those jobs that are being lost.
More people will work from home. The most obvious employment shift caused by the pandemic, though, is the shift to working from home.
Gallup found that the percentage of workers who have flex time or remote work options grew from 39% in mid-March to 57% two weeks later.
In August, Gallup found that about half of employees who are working at home say they would prefer to continue working remotely. And six in 10 managers with employees working remotely say that, even after the pandemic ends, they will allow their employees to perform remote work more often than they did before COVID-19.
In today’s knowledge economy, where a computer is all that is needed to perform many jobs, technology companies are leading the way toward a remote workforce.
Facebook CEO Mark Zuckerberg said half of the company’s workforce may be permanently working from home within the next five to 10 years. Twitter announced in May that some of its employees would be allowed to continue working from home “forever,” while Google employees are being allowed to work remotely at least until July 2021.
Working from home has some drawbacks. Some miss the social interaction that takes place in the workplace and isolation can create mental health issues, such as anxiety, stress, depression and loneliness. Drinking and abusing drugs while working from home is also an issue. In addition, some employees may take advantage of the lack of in-person supervision and not work the entire time for which they are paid.
But there are also clear advantages to employees, employers and society in general.
Employers that manage their at-home employees effectively should see productivity gains. Working from home means time saved that would otherwise be spent commuting, traveling to business events, sitting in meetings and chatting with co-workers. With more employees working from home, employers can also save money on office space. Remote working creates less of a strain on the infrastructure, less traffic and less pollution from auto exhausts.
Not every job can be worked remotely, but technological advances are making it easier than ever for people to work from home. Technological advances making it easier to work remotely, according to the World Economic Forum (WEF), include “virtual private networks (VPNs), voice over internet protocols (VoIPs), virtual meetings, cloud technology, work collaboration tools and even facial recognition technologies that enable a person to appear before a virtual background to preserve the privacy of the home.”
Technology is advancing faster. In addition to remote working, other technological advances are developing at a faster pace because of the pandemic, according to the WEF, including online shopping, electronic deliveries, digital payments, distance learning and telehealth.
COVID-19 has “transformed online shopping from a nice-to-have to a must-have around the world,” according to the WEF.
An advanced logistics system is needed for online shopping, the WEF noted, and, because “in-person delivery is not virus-proof,” many companies and restaurants are launching contactless delivery services where goods are picked up and dropped off at a designated location instead of from or into the hands of a person.
Delivery by robot or drone is also advancing. And orders are increasingly being paid for digitally.
Americans are not only working remotely, but learning remotely. Technological advances that are enhancing distance learning include virtual reality, augmented reality, 3D printing and teaching tools using artificial intelligence.
Healthcare diagnosis and treatment offered remotely, also known as telehealth, can help speed the delivery of healthcare, lower costs and potentially improve outcomes. The use of wearable personal IoT devices to track vital signs and chatbots to make initial diagnoses based on symptoms identified by patients is increasing.
Technology using big data to analyze and track infectious diseases will also continue to advance. Toronto’s Bluedot used its health-monitoring artificial intelligence platform to monitor COVID-19 and issuing warnings about its spread before the World Health Organization and the Centers for Disease Control.
There will likely be other technological advances involving 5G technology, 3D printing, artificial intelligence and more.