While no one presenting with COVID-19 symptoms has been denied treatment, some of the uninsured may not have sought it. As of this writing, the virus’s death toll in the US is at least 113 000 (currently 121 900), and more than 200 000 have been hospitalized, incurring potentially unpayable medical bills (even for many with insurance) that will ruin their credit for life.
The federal government has given pharmaceutical companies billions of public dollars to develop a vaccine and, thanks to lobbyists, did not attach conditions on pricing or impose public claims on patents.
In addition, the pandemic is fueling further industry consolidation by favoring already dominant e-commerce giants at the expense of struggling brick-and-mortar firms.
Labor’s share of GDP – long thought to have been an immutable constant – has fallen in recent years, and market power in both product and labor markets may be one reason.
If the unemployment rate remains high in the coming years, the terms of trade between labor and capital will be pushed even further toward the latter, inverting the Black Death analogy and justifying the stock market’s optimism in the face of catastrophe.
That said, we do not believe that the post-COVID economy will provoke a spike in deaths of despair. The fundamental cause of that epidemic, our analysis suggests, was not economic fluctuations, but rather the long-term loss of a way of life among white working-class Americans.
Notably, deaths of despair were rising before the 2008 financial crisis and Great Recession, when US unemployment rose from 4.5% to 10%, and they continued to rise as unemployment gradually fell to 3.5% in the days before the pandemic.
If there once was a relationship between suicide and unemployment, it is no longer apparent in the US.
Nonetheless, past episodes suggest that those entering the labor market in 2020 will have a lower earnings path throughout their working lives, possibly creating the despair that brings death from suicide, alcohol, or drug overdoses.
In other words, the most likely post-COVID America will be the same as pre-COVID America, only with even more inequality and dysfunction.
True, public anger over police violence or outrageously expensive health care could create a structural break. If that happens, we might see a better society. Or, we might not. It is not always a phoenix that rises from the ashes.
By Anne Case and Angus Deaton for Project Syndicate