Economic Experts: Coronavirus Recovery Will Be Different Than Spanish Flu

From The Center Square:

By Kevin Bessler | The Center Square

Just over 100 years ago, America was dealing with a pandemic similar to the COVID-19 outbreak.

Spanish influenza ravaged the nation and shuttered businesses, schools and many events.

In recent months, the U.S. and Illinois already have seen some of the economic consequences of the COVID-19 pandemic, including sky-high unemployment and many businesses being forced to close their doors.

Carl Campbell, an economics professor at Northern Illinois University, said there is one key difference between the two pandemics.

“Back in 1918-19 there was very little intervention, probably none, by the federal government where in the current situation we’ve had tremendous fiscal stimulus,” he said.

Campbell points to a paper on the economic impact of the Spanish flu that concluded it’s pandemics themselves, not the public health interventions enacted to mitigate them, that hurt the economy. In fact, the study found that cities that swiftly implemented public health measures such as lockdowns helped their economies recover more quickly.

“I saw a statistic that intervening ten days earlier resulted in a 5 percent increase in manufacturing employment after the pandemic,” Campbell said.

During the Spanish flu, Philadelphia is frequently cited as an example of what not to do during a pandemic. In September 1918, despite the arrival of the flu in the city, officials went ahead with a parade to raise money for the war effort. The event drew around 200,000 people, and within days, there were hundreds of new flu cases. More than 12,000 Philadelphians died within six weeks.

Campbell said for the U.S. economy to fully rebound once the pandemic ends, people need to feel safe before they head out.

“I think it all depends on when there is a cure or an effective treatment,” he said. “In the next several months I think we’ll bounce back quickly but I don’t think we will bounce back fully until we find some kind of medication that will greatly reduce the death rate.”

The focus of the work of The Center Square Illinois is state- and local-level government and economic reporting that approaches stories with a taxpayer sensibility. For more stories from The Center Square, visit TheCenterSquare.com.