As we recover from COVID, people are realizing that life is short and should be enjoyed.
In 1982 the economist Mancur Olson set out to explain a paradox. West Germany and Japan suffered widespread devastation during World War II, but both countries experienced miraculous economic growth in the years after the war. Britain, on the other hand, emerged victorious from the war with its institutions intact, yet immediately entered a phase of slow economic growth that lagged other European democracies. What happened?
In his book The Rise and Decline of Nations, Olson concluded that Germany and Japan were experiencing explosive growth because their old arrangements were mixed up. The devastation itself, and the forces of American occupation and reconstruction, drove out the stakeholders who had held back innovation. The old patterns that stifled experimentation were swept away. The disruption has created space for new things.
Something similar can happen today. COVID-19 has disrupted daily American life in ways few emergencies have before. But it has also shaken things up and cleared the way for economic and social upswing.
Millions of Americans suffered severe losses and fears during this pandemic, but many also used this time as preparation time so they could burst out of the gate when things opened up. After decades of slowdown in business dynamism, 4.4 million new businesses were launched in 2020, a far modern record. A report from Udemy, an online course provider, said 38% of workers took additional training in 2020, up from just 14% in 2019.
After decades of spending over saving, Americans lost trillions of dollars in 2020, slashing their debt burdens to a low they have not seen since 1980, and enabling themselves to do so in the wake of the Spend opening generously.
However, the largest shifts can be mental in nature. People were reminded that life is short. For over a year, many experienced everyday routines that were slower, more rooted, and more domestic. Millions of Americans seem ready to change their lives to be more in touch with their values.
The economy has already picked up speed. Global economic growth is projected to exceed 6% this year, and strong growth is expected to continue until at least 2022. In late April, Tom Gimbel, who runs the recruiting and recruiting firm LaSalle Network, told the Times: the best job market I’ve seen in 25 years. We now have 50% more vacancies than before COVID. âInvestors are investing money in new ventures. In the first quarter of this year, U.S. startups raised $ 69 billion, 41% more than the previous record set in 2018.
Even now, this era of re-creation seems to be rebalancing society in at least three ways:
First, power has shifted from employers to workers. In March, for example, U.S. manufacturing expanded at the fastest pace in nearly four decades. Companies are urgently looking for new workers. Between April 2020 and March 2021, the number of unemployed per opening fell from 5 to 1.2.
The workers are in the driver’s seat for the time being, and they know it. The âchurn rateâ – the number of workers who leave their jobs because they are confident they will get a better one – is higher than it has been in two decades. Employers are raising wages and benefits to lure workers back.
Second, there seems to be a realignment between cities and suburbs. COVID-19 accelerated trends that had been going on for several years, with people moving from big cities like New York and San Francisco to suburbs and to rural locations like Idaho and the Hudson Valley in New York. Many move to find work or for economic reasons, but others say they moved to have more space, live a slower life, be closer to family, or interact more with their neighbors.
After all, there seems to be a balance between work and personal life. Stanford economist Nicholas Bloom predicts that even after the pandemic has ended, the number of working days spent at home will rise from 5% in the prepandemic period to 20%.
While this has put pressure on many women, millions of Americans who could work remotely have found that they like being at home, eating with their kids every night, and not bothering with the commute. We are apparently becoming a less work-obsessed and more domestic society.
In 1910, the educator Henry Van Dyke wrote: âThe spirit of America is best known in Europe for one of its qualities – energy.â That energy seemed to have faded in recent years as Americans moved less and started new businesses less often. But the challenge of COVID-19 has generated great momentum, movement and innovation. Labor productivity has skyrocketed recently.
Americans are looking for ways to make more money while leading a more connected life. Joel Kotkin, professor of urban studies at Chapman University, suggests that as the US population becomes more dispersed, the economic and cultural divisions between coastal cities and inland communities are likely to narrow. And as more immigrants settle in rural areas and small towns, their presence could reduce nativism and increase economic competitiveness.
People change their personal lives to address common problems – loneliness and loss of community. Nobody knows where this national voyage of discovery will lead us, but the journey has begun.
David Brooks is a columnist for the New York Times.