Editorial: The economics of reducing COVID deaths, and at what cost?
By Trago Wallace
–As an economist, I think often of opportunity cost and rate of return. I remember during my time at UC Irvine reading a study about speed limits. It was determined that by decreasing a highway speed from 75 m.p.h. to 65 m.p.h. you could save lives, but it would also cost drivers more time wasted in their cars. That wasted time amounted to a collective 105 years for every life saved. The economics textbook posed the question if it made sense for society to spend 105 years to save one life.
I believe we have a similar question to ask ourselves. What is the cost per life saved from COVID-19? Though we cannot as easily find a numerical value to answer that question, here are some of the notable costs that our society incurs.
1. Our young people’s education
This starts at the kindergarten level where the student is somehow supposed to learn via a screen when they are not even able to read yet. If they are like many households without a stay at home parent, they are left to flounder (see my next point). It continues through higher education where in-person learning is no longer allowed; how can they get the experience they need to gain knowledge for an upcoming career? And of course, it is every grade level in between that is getting an inferior education, like we have never seen in our lifetimes. The long term negative effects of this situation as it plays out in society can only be imagined at this point.
2. Socioeconomic divide
The poor in society are hit the worst with the downsides of distance learning. Single moms have no way to oversee their kid’s education when they are at work. Or they take excess time off work to oversee the education and their finances suffer. Lower paid (“non-essential”) jobs will be lost as restaurants and retail businesses close (see point #4)
3. Mental health
Our young people are being hit the hardest in this regard. Middle and high school students are suffering from depression at levels never seen before. Suicidal thoughts and actions are taking place in the lives of people you know personally. Marriages are being strained. Parent/child relationships are being tested. Domestic abuse and substance abuse are rising. Would we knowingly choose a suicide death over a virus death?
4. Jobs and the economy
Businesses are closing for good, and there are going to be so many more to close as the shutdown continues. Restaurants can’t survive with limited capacity. Businesses typically make their profit on the last 10-percent of their sales, so if their sales are down 50-percent it doesn’t mean that they are making less profit, but rather they are losing money drastically. Business owners can only withstand that bleed so long before they file bankruptcy. As businesses close, jobs are lost for good; banks and vendors that they owe money to lose profits. The economy spirals. I think many people have no clue the precipice that we are on right now. The stock market is artificially propped up by stimulus, and most people still have jobs. That is all going to change on a dime if we stay shut down. As jobs are lost and incomes reduce, how much are costs #1 and #2 mentioned above going to increase?
5. Excess/unnecessary deaths
The idea of excess deaths since COVID-19 is brought up by proponents of the shutdown as a result of the virus. I present it as a result of the shutdown. Citizens are not getting the level of healthcare that they did prior to the shutdown. Regular checkups and treatment for existing health issues are being overlooked. Preventable causes of death are on the rise because people are afraid to leave their homes and go to the doctor. This fear is being fed by the media’s constant barrage of daily case counts, etc.
6. Reduced life expectancy
Of this list, I think this has been brought up the least, yet it might be the most relevant to the idea of viewing the shutdown from an economist point of view. Take my health for instance. Before the shutdown, I was playing Ultimate Frisbee regularly. I was in great shape for my age. It is a very active team sport with activity similar to soccer. I could run hard for an hour and feel great. Then we got shut down for six months. My body got weak. When we started playing again, I wasn’t the same. After two months of regular playing, my body has not improved. It’s like I aged five or 10 years. I don’t say this as a “poor me” statement. But, rather, how many others in society have lost years off their lives by losing their regular workout regime whether it be at the gym or regular sports game. Have we reduced our life expectancy? If you add up all the reduced years of our lives, how does that compare to the shortened lives of those that have died with the virus?
Each of these categories is worthy of its own editorial (or article… or novel), but I wanted to put out a broad picture of the damaging trade-offs of our government’s method of trying to reduce cases. Tell me if you think it is worth the cost.
Trago Wallace is a Paso Robles businessman who lives with his family in Templeton. He graduated from UC Irvine with a Bachelor’s degree in Economics.
