COVID questions: Economic recovery, wedding attendance
Editor’s note: We will be publishing answers to questions about COVID-19 and the pandemic each week in this COVID questions column. If you have a question, please email it to firstname.lastname@example.org.
Q: While there is still so much we don’t know (and may not know for some time), what might be the long-term impacts of the pandemic on the U.S. economy? Are there industries that might never recover from the pandemic?
A: Generally, economic recoveries follow one of three patterns “V”, “U” or the Nike Swoosh. The “U” is most common, a “V” is when there is some outside shock that we quickly recover from, and Wisconsin coming out of the Great Recession looked like the Nike Swoosh, long and slow.
With COVID-19, on the other hand, it will be like a series of “W”s until we get a vaccine, cure or treatment. The second quarter GDP numbers reflect the first downward spike, but I think the third quarter might be a slight uptick. The problem is we reopened too fast and people are not practicing social distancing, masks, etc., and we will drop back down again. Now third quarter GDP, the first part of the quarter there was some recovery, but in the second part we hit the brakes again.
Moving forward, I think we have learned that we can safely reopen if (and only if) people wear masks and socially distance. So, the recovery will hinge on that one factor.
There were no real underlying risks to the economy prior to COVID-19, so there is no reason not to believe that once a vaccine or cure is found the economy cannot rebound.
This leads to the second question, are there some industries that will not come back? No, I don’t think that will be the case. Will there be a lot of individual businesses that do not come back? Yes, most definitely. But you have to realize that “churn” amongst businesses can be a good thing, the sign of a dynamic economy. Take a look at this recent study.
But, COVID-19 driven churn is different. But once all this COVID-19 is in the rear-view mirror people will likely go back to spending money in very similar fashions as before COVID-19, hence opportunities for those closed businesses will return. Will it be the same businesses? Probably not, but those market opportunities will represent themselves.
Much of the economy is driven by consumer confidence and COVID-19 has hit consumer confidence like a ton of bricks. If people realize that wearing a mask and social distancing can allow the economy to come back a bit more, consumer confidence will rebound. But, if the “W” recovery looks like “WWW” because we keep reopening too soon, or a critical mass of people refuse to wear masks and social distance, then consumer confidence will be shot.
Until a vaccine is widely available or a cure/treatment found, the economy will be a rollercoaster “WWW”, and the only thing that will tamp down the wild ride is wearing masks and social distancing.
– Steven Deller, Professor and Community Development Specialist, Agricultural and Applied Economics
Q: One of my oldest friends is getting married this summer, complete with a small ceremony and party with more than 50 friends and family. There have been zero mentions of COVID precautions, and I don’t expect attendees will be social distancing, wearing masks or following other recommendations. As much as we desperately want to see our friends and share in their celebration, attending goes against all public health advice and just seems like an unnecessary risk. How do I decline the wedding invitation without damaging our relationship?
A: Keep the lines of communication open. Ask about the plans for COVID precautions before you make assumptions. And if you don’t feel comfortable with the response, it’s perfectly fine to decline. Many experts are advising against even medium-sized gatherings like this one, and none of us want to be part of an event that turns into a viral outbreak.
Differing reactions to pandemic precautions have been riling up families and straining friendships — and there’s likely more tough stuff ahead. Perhaps you could tell your friend that you will have to wish her the best from afar, and send an extra-generous gift. Factor in the amount you’d have spent on travel and accommodations, and add it to the gift amount. Sometimes a present can substitute for your presence. Especially if it comes with a heartfelt note and phone call.
– Christine Whelan, Clinical professor, consumer science, School of Human Ecology