Influence and disruption of coronavirus within economy and education

The Novel Coronovirus has brought a great deal of disruption to the world: medically, economically, and socially. The ensuing crisis will leave the world a different place than it was before anyone but doctors had ever heard the term ‘coronavirus’. The economy in America, and indeed throughout the world, has already suffered severe damage, and there likely will be more economic pain to come. Much of this damage will take years to repair, and in some cases will be permanent. But there is reason for hope that some economic and social good may come out of this terrible tragedy, for America and for the world.

Thus far, the economic effects of the crisis in America have been severe. People have become unemployed to levels not been seen since the Great Depression of the 1930s. Many, many businesses have closed, some permanently. The oil industry has been devastated by the drop in oil prices largely brought about by a sharp reduction in demand. Any industry that relies on the physical presence of people in their place of business (or that cannot have employees work from home) have been subjected to catastrophic financial losses; these include the travel industry, retail shops, restaurants, manufacturers…the list is extensive.

Generally speaking, in America, the economy as a whole is not expected to recover anytime soon. Experts mostly believe the economy will not significantly launch down the path to recovery until the Coronavirus is under control, which likely will not happen until effective vaccines and treatments are available on a global scale. The prevailing opinion is that this will take 12 to 18 months to occur, perhaps longer. Until then, most businesses in most industries will struggle to survive, and unemployment will reach or exceed historic highs.

Curiously, not all businesses nor industries have been harmed by the current economic and social crisis. In America, industries that produce food, shops that sell food, and firms for which delivery services is a significant part of their business model have in some cases actually experienced increases in revenue and profit. An example is the iconic staple of the American diet: pizza delivery. While the vast majority of restaurants in America have had to close their doors as ‘stay-at-home’ orders have been in effect, those that are able to offer delivery or take-away services have thrived. Grocery stores as well as the product-delivery behemoth Amazon has also fared rather well throughout the crisis thus far.

A component of society that is experiencing a great deal of difficulty economically and otherwise that is usually not harmed by economic downturns is that of higher education. In America, and likely elsewhere, during times of economic difficulty, more rather than fewer people tend to seek university degrees in order to improve their incomes to mitigate the effects of the weaker economy. This time, however, with so many people out of work, fewer people are able to afford to attend university, causing significant declines in university enrollments.

The challenges that universities now face is a unique and difficult one. In America, students typically choose between two different types of university experiences: they choose to either leave home and go to a university where they live on campus, or they choose a ‘commuter school’ where they live at or near their parents’ home, commute to campus for classes, and then travel back home. The former group wants an ‘on-campus’ living experience, and the latter does not. Both groups have, for many years, been clamoring for more ‘online’ classes. However, now that all classes have by necessity become online, students are finding that such classes are not as desirable as they once believed. This is true particularly among students who want the ‘on-campus’ experience, and less so by those attending commuter universities.

For larger universities with students who mostly live on campus, there is currently a great deal of pressure to resume on-campus classes for the Autumn semester starting in September. The dilemma for these universities is to find a way to preserve vital revenue generated by students living on campus while at the same time protecting student health and safety. Thus far, a definitive solution has yet to be found.

Another interesting thing to note is that the Coronavirus crisis has served to expose, and indeed exacerbate, many problems that were already present in America long before the virus arrived. These problems exist on a social as well as economic level. Socially, and indeed politically, a great chasm has existed in America for quite some time across ideological, cultural, economic, and educational lines. The beliefs as to how society should function during the crisis vary widely, and differ along the lines of division mentioned above.

Unfortunately, how to mitigate the current social, medical and political crises is far from clear. This is something that the world’s medical, sociological, and economic experts will need to vigorously struggle with over the coming months and even years. One thing is clear though: measures that represent the extremes will not make the current situation better, but rather potentially much worse. For example, there is a large number of people who believe the world needs to continue in deep self-isolation, with people only leaving their homes in times of dire emergency, leaving most businesses to remain closed for the duration of the crisis. There is another school of thought that believes there should be no restrictions of movement whatsoever on anyone; people should be allowed to congregate and go wherever they want so that society and the economy can ‘get back to normal’. Neither of these approaches will work, and will indeed make the crisis worse.

What is needed is a solution that restarts the economies of the world while providing for the safety of everyone, particularly those at increased risk of serious complications or death should they contract the virus. The so-called ‘social distancing’ rules are in place to try accomplish this. However, more creative solutions are needed. Deep isolation of the part of whole populations will lead to an economic depression that could take a generation to recover from. The ‘free-for-all’ approach where people do as they please with no regard for safety will likely lead to a sharp increase in infections and deaths; this may serve to temporarily reopen many businesses, but the resulting decrease in the number of healthy customers and healthy workers will leave businesses in no better shape than if they had remained closed.

What is now needed on the part of governments, industry leaders, and university leadership boards is a set of creative solutions to combat the unique problems we are all facing. For example, universities are currently looking at ways to reduce class sizes to enable greater social distancing, as well as limiting the number of participants at campus activities. This may enable students to return to campus while maintaining a significant degree of safety. Businesses are also looking at ways to reopen in a way that customers can maintain a safe distance between them. Finding the solutions that lie between extreme isolation and complete freedom of movement is the only way to get the economy and the educational systems back on track.

 

Reference:

  1. Anderson, Nick, ‘College students want answers about fall, but schools may not have them for months’, The Washington Post, 23 April 2020
  2. Belkin, Douglas and Korn, Melissa, ‘The Big Question for Colleges: Will There Be a Fall Semester on Campus?’, The Wall Street Journal, 21 April 2020
  3. Hayes, Aden, ‘Coronavirus, Cash and Countdown’, Inside Higher Ed, 17 April 2020
  4. Sherman, Alex, ‘Will schools be open in September?’, cnbc.com, 4 May 2020
Year: 2020
City: Almaty
Category: Economy