Say 'goodbye' to handshake; post-Covid-19 'next economy' won't be the same

Gordon L. Weil

Everybody looks forward to life after Covid-19.

The combination of strong protective measures and slowed economic activity cannot go on indefinitely. Even with Covid-19 as a threat, the economy cannot be suspended for many months.

Scientists warn about the threat of more Covid-19 outbreaks if “opening” moves too fast. Some supporters of President Trump say the scientists are lying, even about the current death rate. Economists wonder if the country can afford to wait indefinitely.

Some aspects of what is already called “the next economy” become increasingly clear. Here is what is likely:

New health restrictions will become a part of daily life.

More people will work from home.

Travel, from commuting to visiting clients, will be reduced.

The U.S. will depend less on imports for essential products.

Say “good-bye” to the handshake.

Without a “cure,” a two-tier society will be created.

Even before this crisis, remote work was known to yield greater productivity, less employer cost, more free time for employees and significant environmental improvement. Covid-19 has given more people the chance to learn about these advantages.

Some question whether the exchange of ideas would suffer from the lack of face-to-face contact. Others argue, however, that a lot of productive time was wasted in such contact.

Just as Amazon has reshaped shopping and Facebook has affected contact among people, Zoom or something like it may transform the remote work experience. When people can organize visual contact from a home computer, remote work may become far more routine.

Similarly, business travel will be reduced. Formerly, personal contact was seen as essential to making sales or closing deals. But managers have been learning that, forced to use remote contact, customers and clients accept it. The experience may now be extended even without the crisis.

One result should be fewer cars on the road. That automotive American revolution could improve both air quality and personal finances. Major insurers are now rebating some premiums as the number of accidents has decreased. Gasoline prices have tumbled with drivers purchasing less.

Though the future of air travel is less clear, it, too, will be transformed. Less business travel is likely. Perhaps airlines will be required to provide more space between passengers, boosting fares.

The U.S. will probably become less dependent on imports to meet essential needs. Vital medical supplies and other goods like computers cannot come primarily from countries who are America's adversaries or competitors. The relationship with China will change.

People have learned about the “supply chain” in which a product passes through several manufacturers, some of them abroad. The need to improve security will require shortening the chain, though it may mean forgoing some low-wage countries. Still, this is a form of national defense, which people generally support.

Domestic production should grow, though prices may rise somewhat. Security of supply has a cost. But achieving it may do more for the negative trade balance than today's tariff wars with the rest of the world. Slightly higher prices paid for local goods may end up costing customers less than increased tariffs.

The economy will almost certainly reflect a greater use of personal protection and more social distancing as a regular part of life. In Tokyo and elsewhere in Asia, people wear face masks for reasons of health, hygiene and social preference. That may become the way of the world.

Unless a successful vaccine is found, the virus will have emphasized that some people need special protection and cannot engage fully in life. Millions of older people and those with existing illnesses will need to accept less direct, personal contact and an almost certain dependence on face masks.

Governments may have to impose directives that meet their special needs. Separate hours for seniors at supermarkets and in other public places may become a legal requirement. People serving them may be required to wear face coverings. This could become a permanent part of life.

From these changes may arise a two-tier economy. With safeguards, most people may be able to take part fully in the new economic life of the country, even if that entails some degree of risk. As their involvement increases, the economy will revive. Such change will not take place at the same time all across the country but will reflect local factors and personal acceptance of risk.

The second group will be those who need or want a higher level of protection from Covid-19. For them, protective measures may be imposed on businesses and public services.

Of course, the elimination of the coronavirus as a massive health threat by a vaccine could restore full social contact. That could take years. Whatever the scientific outcome, the legacy of Covid-19 will survive and, life will never be the same.