Freakonomics Radio 409. The Side Effects of Social Distancing
Mar 19, 2020
Nicholas Bloom, a Stanford economist, discusses the sweeping economic changes due to the pandemic. Toby Moskowitz, a Yale expert in finance, sheds light on the volatile stock market and unexpected industry shifts. Marshall Burke, also from Stanford, highlights how COVID-19 impacts the environment, from air quality to social behavior. They explore the surge in remote work productivity, the future of education, and the balance between social interaction and isolation, revealing both challenges and potential silver linings in this tumultuous time.
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Economic Impact of COVID-19
- COVID-19 presents both demand and supply shocks, causing business closures and economic downturn.
- Uncertainty, especially about very bad outcomes ("left tail risk"), further harms the economy by discouraging investment.
Vulnerable Workers
- Salaried workers have more job security during the pandemic than hourly workers.
- Hourly workers face higher exposure risk and are more susceptible to layoffs.
Responding to Vulnerable Workers
- Consider Ford's $5/day wage during the 1930s as an example of supporting workers.
- Recent labor markets have favored flexibility for firms, not worker protection.