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The World-Changing Impact of COVID-19

News Story

In this month's PACEspectives, professors across a number of different fields weigh in on how COVID-19 has changed the world overnight, and will likely continue to do so for years and decades to come.

Our world has ground to a sudden, screeching halt. COVID-19 is proving to be the most devastating crisis of the 21st century, with far-reaching consequences that have fundamentally altered everything from our global economic system to going out and picking up coffee.

Given the unprecedented nature of this global pandemic, Pace professors across a myriad of fields weighed in on how to make sense of COVID-19; from why this crisis is particularly devasting given humanity's natural tendency to congregate during times of upheaval, to the potential for scrappy innovators to emerge from this reality with potentially groundbreaking business ideas.

Inequities of American Education Exposed
Christine Clayton, EdD
Associate Professor of Education, School of Education

​Just before my second online class of the week, I took a break midday to walk to my daughter’s local middle school to help distribute food to families of children who receive free and reduced meals. Across our country and on an unimaginable scale in places like New York City, schools are distributing this most essential need⁠—food. It’s a startling thing to think about, even though it’s happened every day, for decades. The pandemic has exposed the inequities of America that have been there all along.

Almost from the beginning of compulsory education, American schools have provided food for its students. As reformer Robert Hunter wrote in 1904 in Poverty (PDF), “If it is a matter of principle in democratic America that every child shall be given a certain amount of instruction, let us render it possible for them to receive making full and adequate provision for the physical needs of the children who come from the homes of poverty.” 

Democracy can’t much function if the population is hungry and neither can schools work well if the students haven’t had breakfast. So, as in many things and over time, schools have stepped up to fill the gap.

Now in the absence of physical schools, the needs schools fulfill that, as a society, we’ve come to rely upon are laid bare. In addition to educating the hearts and minds of our nation’s school children, they ease the household budgets of millions of families by filling the bellies of the children during the week. Compulsory attendance enables parents to go to work and power the economy, build our roads, protect our communities, and heal our sick. Schools provide opportunities for students to pursue the arts, sports, and a variety of activities that make life worth living for so many. As schools at all levelsfrom kindergarten to graduate schoolrapidly transition to distance learning, we see in sharp relief the technological divides of our communities as schools loan out computers and groups scramble to fundraise for free internet service for needy families. Our college students, now at home, report sharing computers with siblings. Some will have time and space to study and do their online coursework; others are living in cramped quarters and working increased hours to support economically distressed families. The contexts of our students’ lives are fundamentally different and those contexts for learning matter.

Much has been expected of an under-funded public education system to make up for the inequities of the American economy, and higher education has long been seen as a pathway to fulfill one’s American dream for financial success, security, and fulfillment. In this moment of crisis, we cannot fail to see the inequities of that system any longer.

Potential Positives Amidst a Major Tragedy
Anthony Mancini, PhD
Associate Professor of Psychology, Dyson College

With more than 882,068 cases and 44,136 deaths worldwide (as of this writing), the coronavirus pandemic has exacted a staggering toll on human life. It has also exacted a psychological toll. Anxiety about infection, concern for vulnerable family members, and stress from disrupted routines have profound implications for everyday psychological functioning. Social isolation, a necessity for containing the virus, can exacerbate these anxieties. Inactivity from remaining at home can as well. Worse, many people have lost their livelihoods and face uncertain futures, dwindling retirement savings, and difficulties supporting their families, while others are forced to work under dangerous conditions. All of this is a potent recipe for emotional distress.

Although these risks are real and the prognosis potentially grim, the long-term psychological consequences of the pandemic are not at all clear. As my own research has found, acute stress can have surprisingly beneficial consequences on psychological functioning. It stimulates cooperation, trust, and affiliation. It can bind people together in common purpose. It can make us sensitive to others in ways we weren’t before. It can even directly improve psychological functioning.

There is already evidence of an uptick in social interaction, and never before have alternatives to in-person interaction been more important. Social media activity has risen by 50% since the pandemic, according to a recent report. People are in closer contact with friends and relatives, checking in by phone, text, or video chat. All around us are examples of heroism and selflessness, which can generate feelings of elevation, a potent positive emotion. The pandemic may stitch us all into a larger fabric of humanity, one that transcends national borders. All of this is reason for hope in the midst of tragedy.

Economic Fallout of COVID-19
Todd Yarbrough, PhD
Clinical Assistant Professor of Economics, Dyson College

COVID-19 and its economic fallout represent a simultaneous supply-side and demand-side shock, with each shock itself of historic proportions. It is absolutely unprecedented in the modern economic era, and the solutions will themselves be just as unprecedented. First and foremost, any policy undertaken by governments should first seek to keep as many people from contracting COVID-19 as possible. Every contraction and death frays our social fabric and runs the risk of making our economic system moot. And reducing contraction is the ONLY way to truly prevent and mitigate the economic fall-out.

On the fiscal policy side, congress needs to act immediately to ensure that those who have lost their jobs will be able to pay for the basic needs of life, rent, food, childcare, and healthcare. Without this immediate basic support, we run the risk of triggering an even larger economic fall-out than we already face. Every day without a greater than $2 trillion fiscal stimuluswhich should directly seek to keep businesses open and basic needs of individuals covered who may happen to lose their jobis an increased potential for a longer recession. Without unprecedented fiscal policy, the demand-side of the economy will suffer.

On the monetary policy side, the Federal Reserve has admirably dropped interest rates to zero and continues to inject needed liquidity into financial markets, which will help to blunt the sharp drop-off on the supply side. This will allow large companies to have access to financing even as the financial markets get hit with rising risk. Also, the Fed will need to intervene in municipal and state-bond markets to ensure that city and state governments have the financing available to keep basic services going during the oncoming contraction.

There is tremendous risk even with appropriate fiscal and monetary policy. COVID-19 has thus far represented an existential challenge to society, and will continue to do so for some time.

COVID-19 and Entrepreneurship
Bruce Bachenheimer 
eLab Director, Lubin School of Business 

Entrepreneurship is often associated with some form of disruption, the creation of a significant change in the market. There is perhaps no time more ‘ripe for disruption’ than during a crisis. Airbnb and Uber were founded amid the 2008 financial crisis, and probably would not have succeeded if either was launched a few years earlier or later. Why? Ordinary people would not have been willing to turn their home into a hotel or their car into a taxi absent the financial distress they were facing. Same for customers, who were suddenly willing to sleep in a stranger’s bed and pay for a ride in a regular car. Once these concepts proved successful, they were able to become a new normal.

What innovative business concepts will be born out of the COVID-19 crisis? We’ll have to wait and see. But what’s important to remember is that it’s not about coming up with an interesting idea; it’s about the passion, persistence, and perseverance to actually make it happen.