US Faces a Challenging Road to Recovery After COVID 19

There is little question as to why President Biden is so focused on the COVID-19 crisis, especially the vaccine rollout, in addition to the economy. Had it not been for the pandemic, the subsequent shutdown of an economy that had the lowest unemployment rate in 50 years (3.5% in February 2020) and the economic consequenses that followed, Donald Trump may very well have been re-elected as President.a

Going into 2020, most Americans believed Trump would be re-elected.1 Although Trump still received 74 million votes, he lost both the popular vote (81 million for Biden) and the electoral college vote (232 to 306). According to his own pollster and exit voting in 10 states — five that he lost in 2020 but won in 2016, and five that he won in both years — there was widespread disapproval of his handling of the pandemic and his erratic pronouncements about COVID-19. As a result, Trump was perceived as being untrustworthy, and public opinion among the nation’s international partners and allies dropped to unfavorable levels not seen any time over the past two decades.b

The drop in support for Trump was especially large among white voters — particularly white men — with a double-digit drop in enthusiasm by white college-educated voters. Among these voters, COVID-19 and getting it under control was a top issue — more important than opening up the economy or lowering the unemployment rate, which had reached a high of 14.7% in April 2020, with historical highs in 43 states in 2020.c

Impacts of the economic shutdown

Despite the high unemployment rates, it was clear by the fall that the U.S. was coming out of its recession. Normally, countries “slip” into recessions, gradually losing jobs and employment opportunities. The suddenness of the 2020 recession reflected the abrupt closing of the economy in March and April rather than changes brought about by usual economic forces.

In October, the unemployment rate had fallen to 6.9%. However, the labor force participation rate had also fallen — although only slightly — from 63.2% in early 2019 to 61.5% in November 2020, which means the base had also fallen. The labor force participation rate indicates the number and percentage of working-age people who are looking for jobs or who are employed. During recessions, people tend to become discouraged and leave the labor force, whereas during economic growth periods, people re-enter the labor force. This tendency means that when recessions are starting if the unemployment rate reflects only the number of people who aren’t working but are looking for work, it may under-represent the actual impact by missing those who have dropped out of the labor force. Unemployment rates and labor force participation rates are reported each month by the Labor Department, but most of the attention is given to employment and unemployment rates.

Similarly, if people are entering the labor force because of the availability of more jobs, the unemployment rate may not properly reflect the expansion that is occurring.

Both of these circumstances occurred in 2020.

The vaccines bring new hope, but not without challenge

The other profound event that occurred around the time of the election was the approval of two COVID 19 vaccines, created by Moderna and Pfizer/BioNTech, on an emergency-use basis. In late February, the Johnson & Johnson single-dose vaccine was also approved.

It is hard to overstate the extraordinary achievement reflected in these approvals, both in the science and the industrial engineering involved in producing enough vaccines to eventually vaccinate the entire adult U.S. population. By late December, two hundred million doses had been purchased. President Biden ordered another 100 million doses in early March. With the availability of the single-dose Johnson & Johnson vaccine, it is now estimated there will be enough vaccine for all adults in the U.S. by late spring. Trials have not yet been performed on children but are expected to start soon.

However, it has become clear that it’s one thing for the federal government to purchase the vaccine, but it has been a different matter for the states to distribute it to places where people can make appointments to receive it. Why the states are struggling so much is unclear.

In September, states were requested to provide the federal government with plans no later than October on how they would distribute the vaccines. The actual distributions began early in 2021, generally targeting healthcare and other front-line workers first and then moving to people over the age of 65 or with certain health problems. Most states have relied on age after focusing on front-line workers because it simplifies the vaccine rollout.

In what has been reminiscent of the turmoil created during the initial months of exchange sign-ups under the Affordable Care Act, states have seemed overwhelmed with how to have people in specified age and risk categories effectively sign up to receive the vaccine and then to provide adequate amounts of vaccine to these sites. Sign-up sites have regularly crashed because of the large numbers who have tried to access them, elderly people have had to wait in line for hours or drive across their state to gain access to a vaccine, and so forth.

Biden’s promise: How much of a difference can it make?

Whether President Biden will be able to bring more order to this process is yet to be seen, but because the distribution is primarily a matter for the states, it is not clear how much difference the change in the White House will make. If new variants of the virus emerge that are not responsive to the existing vaccines as COVID-19, President Biden will have a clear opportunity to show whether a different presidential style can produce a different outcome.

Right now, in addition to his focus on stopping the pandemic and reinvigorating the economy, Biden promised a return to a normal presidency. But thus far, he has missed some early milestones of what has defined previous presidencies: He has yet to give his first solo news conference, make his first trip abroad, deliver his first speech to Congress and receive his first in-person visit by a world leader. While it’s true that the pandemic presents a unique challenge for a new president, time will tell how “normal” Biden’s presidency will actually be.

Footnotes

a. Statistica, “Monthly unemployment rate in the United States from February 2020 to February 2021(seasonally adjusted),” March 2021.
b. Wike, R., Fetterolf, J., and Mordecai, M., “U.S. image plummets internationally as most say country has handled coronavirus badly,” Pew Research Center, Sept. 15, 2020.
c. Bureau of Labor Statistics, “43 states at historically high unemployment rates in April 2020,” TED: The Economics Daily, May 28, 2020.

About the Author

Gail R Wilensky, PhD, is a senior fellow at Project HOPE; a former administrator of the Health Care Financing Administration, now CMS; and a former chair of the Medicare Payment Advisory Commission

Gail Wilensky, Ph.D.

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