School Closings Putting Many Parents Out of Work

School Closings

People working at home has provided the economy with a means to keep people working while distancing. Study at home does the opposite and shrinks employment.

There haven’t been many benefits that have come out of the COVID-19 pandemic, where our response continues to punish our economy with plenty more pain in store as we look to get back on our feet more. Concerns about social distancing have not only had us choosing to distance ourselves from prosperity, it’s also allowing us to distance ourselves a lot more from the old and persistent thinking about the need for having employees in physical proximity where this takes away from efficiency and employee satisfaction.

There are some jobs that simply cannot be performed from remote locations, which includes any role that requires face to face interaction with clients and customers, but even the retail business is undergoing transformation, as people move away from in person retail toward virtual interactions.

This has allowed retailers like Amazon to prosper, although this also benefits customers given that they can now conduct these transactions completely from the comfort of their own home and have their purchases dropped off right at their door in a fairly timely manner.

The reason why Amazon and other retailers have been working so hard to speed up their delivery times, down to just a single day in a lot of areas now, is that timeliness has been the biggest impediment to their growth, the biggest reason why people choose to travel to buy what they want, because they can just go pick it up on the same day.

There are still some types of purchases where interacting with items is preferable or even needed to determine suitability, and you can’t try on shoes or clothing online. People may also prefer to inspect items visually prior to purchase, where you can just put it down if you don’t like it when buying at a physical store, instead of having to mail it back if you don’t like it and bought it online.

Fast shipping is therefore not enough to seek to close the gap between online and physical retailers, as there’s also the issue of the inefficiency of the return process that needs to be addressed if online retailing is going to really be able to stand alongside their brick and mortar competitors and not have to look up too much.

When the stores are closed or people may be hesitant to view them due to their fears of being infected by a virus, this at least allows them to think more about the merits of remote ordering in general. When this is all said and done, at least some of this migration to online is expected to stick, perhaps a good amount of it, especially for things that are competitively priced and not needed immediately, where online ordering can save people trips to the store and save both the time and expense involved.

Economic efficiencies do affect the labor market though, and the more we put computers to work, and the more we improve processes to require less labor, this does reduce the amount of labor required. People have been worried about being replaced by computers, and have been told that this greater efficiency will provide different jobs for them to do, but this requires another step, the economic expansion needed to create these new jobs.

As we move toward more efficient means of doing business, this in itself will put downward pressure on demand for labor, and this is also the case with our moving toward working more remotely in general. This does not mean that doing these things isn’t a good idea, and the gains from these improvements in efficiency do convey overall benefits, but we still need to grapple with the need for less people.

There are less people needed to maintain computer networks to manage employees working at home, as well as less people upstream where this will add more labor demand to technology companies but subtract even more from those companies who served these lost work spaces, everyone from people who clean the building, to nearly retailers whose businesses have been shrunk, to the real estate companies who lease the space, and everyone in between.

A lot of this might be passed on to end users by reducing business costs, and much of the extra money that people save on things like transportation, wardrobe, and other costs associated with traveling to work will be spent on other things and still stimulate the economy, but at the very least there will be workers that this will displace while we wait for the ripple effects to create the new opportunities in different sectors that we are told will emerge in the aftermath.

Our Labor Force Has Been Changed in More Ways Than We Think

This isn’t unlike the effects of the lockdown itself, on a smaller scale of course, with the difference being that these jobs are lost not by lack of business, but due to a transformation of the way we work. We may not even worry that much about these things due to focusing on the benefits, and given that the parties directly involved will benefit, both the employers and the employees, they certainly won’t be bothered by this, but this does have an effect on the labor market overall to be sure.

Even with all the people now working at home at least temporarily due to recent health concerns, there is much more opportunity to cast off our old beliefs of the need for actual physical proximity, and we’ll see this migration gain momentum for a while. This was already expected to happen, it just got catapulted forward and forced us to cover years of the slower pace we were on in just a matter of months.

With the labor market already being so stressed by the aftereffects of the lockdown itself as well as the lingering reticence of people to interact physically, we do need to account for these additional effects and how they may delay the recovery in the labor market that is going to take quite a while without these additional burdens.

Now that the economy is mostly at least opened up again, and the additional unemployment benefits that have provided economic incentives for many lower paid workers to stay unemployed to expire at some point in the near future, there is another gorilla in the room that needs to be wrestled down, which is the effects of continuing school closures and the shrinkage of the supply of labor that this will cause.

As states debate how to handle the prospect of re-opening schools for the fall year, the focus has been on the welfare of the kids, and while COVID-19 has been shown to be even less of a risk to children than the common flu, the fear is that these kids can spread the virus among themselves and then to more vulnerable segments of the population, especially the elderly, remains a concern among those entrusted to decide these things.

Among the effects of this pandemic is the symptom of not paying much attention to economic consequences than we should, often simply ignoring them, and although we may still decide to pay a price in restricting the economy somewhat, we ignore these things at our peril. We at least need to look at all sides of the matter first to even be in a position to make these decisions sensibly, with the deliberation they require.

Having students attend school from home provides the same opportunity for overall efficiency as working at home does, among the people that have access and do well at this that is, with one key difference. Adults do not need supervision when working from home, but a lot of kids do, particularly younger kids. If a parent needs to leave their job to supervise their kids studying at home rather than at school, this is going to create some real problems with the economy, with so many people out of the labor force for this reason.

Even needing to do this temporarily, this isn’t the time to be forcing a lot of people out of work, while we try to get back on our feet and get more people back to work. There are lots of people now that could return to work if there was a way to do it and still have someone look after their kids in the daytime, where working at home isn’t an option right now and they do not want to work outside the home either, or perhaps cannot, as bad as they may want to.

More people working from home does help this somewhat, although in a great many cases, working from home requires your full attention and people may not be able to devote enough time to supervising their kids during working hours and still deliver their work commitments.

The Price Matters Even if We Pretend it Doesn’t

Whatever states end up deciding with school re-opening, including partial accommodation where students attend part-time, they do need to at least account for the economic damage that results from decisions other than returning to normal school schedules that are normally staffed and attended.

In addition to parents who have to leave their jobs to care for their school age children, this also impacts any staff who have been put out of work by school closures. The problem has been that economics have been kicked to the curb in this pandemic, and while the repercussions of this are starting to influence governments more now, there is still a strong tendency to want to protect health with no real regard to the costs of it.

Our economy has sure taken a bashing from all this, and while economics can only address monetary value, and it’s not so easy to put a price on human life, it still tells us that we must at least have some sort of proportionality we wish to act rationally. Closing your eyes to this is not acting rationally at all, and we’re seeing what can happen when we don’t even try.

Part of acting rationally also includes an assessment of the costs and benefits of our actions, and while the costs in human life may be hard to measure, it is at least easier to measure the benefits, and the problem is that we have closed our eyes to both. Before we can even start to put a price on lives, we need to know how many lives our actions may save, not just do it without a thought.

We also need to look at the rationale of our decision, and that’s being neglected as well. This is the biggest mistake because whatever estimates about how many lives may be saved from our plan do have to be reasonable. We need to be looking at something, like comparing death rates with other countries that have locked down more or less or perhaps not at all, where this number of deaths per million of population may be a little higher in Sweden, but the dying there is virtually over, and the U.S. has a ways to go yet.

This virus has always appeared to be unstoppable, and we were told by the outset that it spreads several times faster than influenza, and influenza infects up to 40 million people a year in the U.S. Several times that is a lot of people. From this, we already knew that a lot of people would be getting this one if the science was right, and it sure looks like it may be.

From there, given we want to look to minimize this, we need to see how well whatever plan we come up with to do so actually works. Unfortunately, nothing we have tried, including strangling the economy and putting a lot of people out of work and out of business, has actually worked, as this virus laughs at these attempts. Even seeking to commit economic suicide would not be enough, as all the quarantining we could bear still sees the virus spread until it extends its reach to the point where it no longer can grow because too many people have had it already.

What happens then is that we just end up delaying the outbreak until we can take no more, but a virus this active and with this high of a spread rate is going to get around eventually. Sweden understood this from the outset, and while they may have taken a big hit from the virus as several other European countries did, their economy was not restricted in any way and they escaped the economic pandemic anyway.

The United States, for all its efforts and all the trillions that it has spent already to clean up the effects of the lockdown, has had 12,385 cases per million. Sweden, who kept things wide open, has had 7,700 cases per million. With COVID still raging in the U.S. while Sweden is sweeping up from it, this gap will only widen. This alone should have us really asking ourselves what sense this all made, as the U.S. sure didn’t control the spread of this very well with these worse numbers, what we paid this huge price for.

If we are really looking to make an informed choice about whether to open our schools in September, or what the conditions should be to fully open them, we do need to consider the implications of this, the costs to parents, workers, and the economy and what is really prevented if we exercise other means of prudence.

Our school system is designed with the regard for social distancing that was practiced prior to COVID, and the idea that the new physical distancing guidelines really provide much benefit is questionable, and these are questions we need to be asking. We’ve been doing plenty of social distancing, but it hasn’t really helped. It’s now been shown that this virus spreads at a distance of 10 feet or more, which explains why it can spread like wildfire in a country where everyone is separated by 6 feet.

There’s only so much you can do with keeping people in school apart, as the further apart they have to be, the less the reach of the in-person teaching becomes. If you take a normal classroom and remove all the kids that are within 6 feet of one another, most of the kids will be studying at home. If we use 10 feet, we’re only left with a skeleton.

It very well may be that the distancing itself may make school reopening not effective enough to make much of a difference, unless we use this as a means to segregate them according to need and take on the kids that are less able to study at home

We might even see a cultural change from this, in a similar way that this pandemic has had us rethink our cultural preferences of what the work environment is supposed to look like. Our present culture may be underestimating the ability of our kids to supervise themselves at a certain age, and while this ability does vary among children of a given age, we are probably excluding many of them at an age where they could manage such a thing acceptably well.

There are some tough decisions ahead and we cannot ignore the economic impact of whatever we decide, as well as the impact to the students of the hiatus. In the opinion of many, this is no small matter, although the time away has not been so long as we should be too concerned about this delaying their development very much, but we can’t just ignore this either.

Given that the school systems in European countries who have also been greatly affected by the pandemic have successfully opened their schools again should at least encourage us to do the same. There is quite a bit on the line here, including the impact on the careers of all those parents who had to leave work because school is out. If we prefer not to open them, we at least need to account for all the students and parents that we leave behind.

Andrew Liu

Editor, MarketReview.com

Andrew is passionate about anything related to finance, and provides readers with his keen insights into how the numbers add up and what they mean.

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