Unemployment is an undesirable trait to an economy. It robs people, businesses, and the economy of income and leads to slow or no economic growth. We are are all witnessing these consequences. While unemployment keeps skyrocketing we are seeing small businesses permanently close, people are losing wages and the economy is not producing at its optimal capacity. Worse still, this is due to mandated closure of businesses.
These significant job losses should be a good enough reason for states to allow businesses to reopen at lease ease some of their restrictions. Businesses have an incentive to follow social distancing as well as sanitization guidelines and are capable doing so.
We are at risk of experiencing trends similar to those of the Great Recession and other past economic downturns. According to research by the Well Being trust, as many as 75,000 Americans are at risk of dying from overdose or suicide due to the corona virus despair.
Deaths of despair are defined as deaths to drug, alcohol, and suicide, and often associated with socioeconomic factors. Unemployment during the Great Recession (December 2007–June 2009) was associated with an increase in suicide deaths and drug overdose deaths.
There are certain factors at play here that do tend to affect people`s mental health. Job loss, isolation and uncertainty have been the big players of the economic shutdown.
In our case the psychological impact of job loss is being Across nine different scenarios, additional deaths of despair range from 27,644 (quick recovery, smallest impact of unemployment on deaths of despair) to 154,037 (slow recovery, greatest impact of unemployment on deaths of despair), with somewhere in the middle being around 68,000.
According to the latest reports from the Bureau of labor statistics that came up May 8th, we have seen more than estimated 20 million people lose their jobs in the past three months. These numbers are already historically so high, extending locks downs extends the risk of higher permanent unemployment numbers as well as economic damage.
Additionally most of these job losses are concentrated in sectors with already low wages. People already facing economic hardship have been the hardest hit and will continue to suffer higher unemployment rates long after the economy is open. Extending the lockdown extends the recovery time for people in these most vulnerable sectors which could be psychologically damaging to some.
The Leisure and hospitality industry, for instance, has an average hourly wage of $18 per hour which is the lowest compared to all other sectors. The retail industry comes second with average per hour wage of $21.20. All the other sectors have average hour wages well over $25.00 and have faced relatively lower loss of employment.
While it may seem like the choice is between either saving the economy or saving people’s lives, that is not the case.Closing the economy altogether in order to save lives is also throwing people’s lives away. By extending the lock down, states are denying People of their livelihoods, social ties as well as their sense of security possibly leading to the aforementioned deaths of despair. There is definitely a choice that has to be made, but that choice is not between rising unemployment or death, because unemployment also kills.