Regional President Speech

Home / News / Speeches / Thomas I Barkin / 2021 The pandemic has changed us. It reminded us how precious time with family and work-life balance are. It threatened baby boomers’ health while expanding their 401k plans, perhaps driving the recent surge in retirements. It even allowed us to discover hidden talents, like baking or gardening, increasing the value we place in our leisure time. Many of these shifts could dampen future workforce participation and productivity. But one change, if it persists, could be a force in the opposite direction — a productivity booster. We saw a dramatic reduction in �u incidence. Flu season comes every winter. While we never know how severe it will be, we know it will be disruptive. But we’ve never seen the pendulum swing this far before. This winter, we basically bypassed the entire �u season. The Centers for Disease Control and Prevention (CDC) estimates we had 38 million �u cases the winter before the pandemic. But reported �u incidence was so low this season that the CDC hasn’t even published estimates. We can see the same decline by looking just at the reported cases, which are much lower than the CDC’s total estimates each year. Positive �u tests dropped from tens of thousands per week during the winter of 2019-2020 to just hundreds or fewer per week this past year. According to local news coverage, reported �u cases in Japan were down more than 99 percent from the previous season’s levels. The data are clear: There has been a global drop in �u incidence. We have a pretty good idea why. We made decisions to reduce our personal and collective risks. We stayed home and avoided crowds. If we went out or worked in person, we wore masks, distanced ourselves and were hyperaware of hygienic precautions. These individual decisions were matched with institutional actions, such as paid leave incentives and facility modi�cations that normalized hand sanitizer stations and socially distanced �oor plans. The realization that we may be able to mitigate the impact of �u season is powerful. We now know that the annual disruption is not necessarily a given. That leads me to wonder: What if we could retain this low infection rate beyond the pandemic? What could we gain in future years? For one, we would see fewer deaths. While we may tend to think of the �u as an inconvenience rather than a lethal threat, tens of thousands of people die from the �u each year. The CDC estimates 22,000 individuals passed away from the illness during the 2019-2020 season. Nearly three times that many people died during the severe 2017-2018 season. And while those �gures may seem low compared to our recent experience with COVID-19, the �u is an annual occurrence, not a once-in-a-generation pandemic. In�uenza and pneumonia are among the top 10 leading causes of U.S. deaths every year. The second-order bene�ts of fewer deaths would be considerable. The majority of �u deaths occur among older Americans, a group whose increasing labor force participation is critical to our workforce over the coming years. Reducing �u incidence could also help us avoid emotional, �nancial and productivity losses. A 2018 study places the �nancial loss from lost earnings due to �u deaths at $4 billion. We would also see fewer hospitalizations. Approximately 400,000 individuals were hospitalized with the �u during the 2019-2020 season, according to the CDC. More than double that number were hospitalized during the 2017-2018 season. Reducing �u cases as we have this past year could reduce hospitalizations by nearly tenfold. Fewer hospitalizations could reduce medical costs by up to $3.2 billion each year and free up scarce medical resources such as provider time and hospital beds. Even reducing nonsevere cases would help our economy. Fewer missed days of work would increase output, particularly for smaller �rms that struggle to continue normal operations when �u outbreaks hit their workforce. Annual �u-related employment absences average 20.1 million days, at a cost of $3.8 billion, according to one estimate. Estimates from the global outplacement �rm Challenger, Gray & Christmas place the cost of the 2019-2020 �u season at approximately three times those levels (57.3 million days and $13 billion). To put those estimates into perspective, that’s equivalent to every one of the 2.7 million workers in the grocery store subsector missing between eight and 21 days of work each year just due to the �u. Those missing days of work hurt the employer and the employee, but they also a�ect individual consumption — which then a�ects other businesses. As we’ve learned during the pandemic, we can spend less when we are home than when we are going out to lunch or popping into stores after work. We could also see fewer low-productivity work days. It’s pretty hard to be e�ective while battling the �u or while taking care of a loved one who’s ill. That raises another bene�t of mitigating the �u: reduced school absenteeism. Given the learning gap we face coming out of the pandemic, every day in the classroom matters. Fewer deaths and hospitalizations. Less productivity loss at work. More consumption. Reduced school absenteeism. The bene�ts are compelling. But are we likely to see this lower infection rate continue? Some �u-suppressing behaviors are going to go away. We have an understandable desire to gather, to collaborate, to shake hands or hug and to smile with more than just our eyes. As the pandemic eases, we are already relaxing. But we don’t necessarily need to quarantine ourselves to have a real impact on �u incidence. Perhaps the lessons from the COVID-19 vaccines will enhance the e�ectiveness and take up of �u vaccines. Perhaps businesses will maintain policies that have helped reduce spread this year, such as remote work options, leave for sick employees, hand sanitizing stations and facility modi�cations. Perhaps each of us will internalize a healthier set of behaviors. I will try to do my part and retain some of my pandemic habits. I'll be taking some extra seconds for hand-washing and reserving my hugging primarily for family. Perhaps others will do the same, and we can elbow bump our way to a healthier, more productive economy. Putri, Wayan C. W. S., David J. Muscatello, Melissa S. Stockwell, and Anthony T. Newall. “Economic Burden of Seasonal In�uenza in the United States.” Vaccine, May 2018, vol. 36, no. 27, pp. 3960-3966. Putri et al. (2018). Putri et al. (2018). 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Tom Barkin (2021, June 21). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_20210622_tom_barkin

@misc{wtfs_regional_speeche_20210622_tom_barkin,
  author = {Tom Barkin},
  title = {Regional President Speech},
  year = {2021},
  month = {Jun},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_20210622_tom_barkin},
  note = {Retrieved via When the Fed Speaks corpus}
}