“Most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term.”
There has been much discussion about what the 1918 Flu Epidemic (also called the Spanish Flu) can tell us about the health impact of Coronavirus in 2020. As you will recall, the United States and the world went through lockdowns and quarantines much as we are now. The 1919 Flu Epidemic was in fact far more devastating than the Coronavirus. Here is how the CDC puts it on its website: “It is estimated that about 500 million people or one-third of the world’s population became infected with this virus. The number of deaths was estimated to be at least 50 million worldwide with about 675,000 occurring in the United States.”
It suddenly hit me yesterday that, oddly, no one is talking about the economic impact of the 1918 Flu epidemic. It is surprising because so much conversation centers around what some fear will be an extremely hard recession or even a depression.
As I thought about, it occurred to me that I had never heard about an economic downturn in 1919 or 1920. Rather than a decline, that was the beginning of the Roaring ’20s.
I decided to do some research and found a paper, “Economic Effects of the 1918 Influenza Pandemic,” written in 2007 by Thomas A. Garrett, Assistant Vice President and Economist, Federal Reserve Bank of St. Louis. Here is the opening paragraph:
The possibility of a worldwide influenza pandemic in the near future is of growing concern for many countries around the globe. Many predictions of the economic and social costs of a modern-day influenza pandemic are based on the effects of the influenza pandemic of 1918.
Kind of creepy and predictive when you consider that it was written thirteen years ago. (More on that in my next article). But what did it have to say about the economic impact of the 1918 Flu?
The report states in summary that: “Most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term.” In fact, “Some academic research suggests that the 1918 influenza pandemic caused a shortage of labor that resulted in higher wages (at least temporarily) for workers…”
Based on this analysis, I believe we can expect the economic impact of the Coronavirus on most people to be short-lived. Let’s hope I’m right.