Paul Brandus: Coronavirus is accelerating big changes in the way Americans live
Step back from all the coronavirus coverage and you’ll see some important changes happening to the U.S. economy, and the way we live, work and play. These changes were well underway before anyone had even heard of the virus, but they’re now accelerating because of it. There are implications for investors, employers, municipalities, families, students and more.
1) Cashless society. Think it’s all about the Benjamins? No, it’s about not touching them. Even before the coronavirus reared its ugly head, folks were handling filthy, germ-infested bills less and less. According to the FDIC, the government agency that guarantees the safety of your bank deposits, cash represented just 30% of all payments in 2017, as credit cards, and digital-based platforms like Venmo, PayPal and others continue to grow.
Meantime, Harvard Business Review notes that more and more business owners are going entirely cashless, “in an effort to increase operating efficiency, reduce wait times for customers, and create a safer work environment by mitigating the risk of theft.” Look for these trends to speed up.
says it is making more doctors available for its service, LiveHealth Online, as it anticipates a rise in the number of coronavirus cases in the United States. This will give a boost to the growing business of online medical consultations, a field that is beginning to take off, thanks to a population that is both aging and increasingly digitally savvy.
The stock of one publicly traded telemedicine firm, Teladoc
, is up some 11% in the past week, and private startups are moving into the space.
3) Telecommuting. The percentage of Americans who work from home at least some of the time has been increasing by about one percentage point a year, says Gallup, and is now nearing 50%. Separately, says Quartz, U.S. Census data shows that more than 5% of workers worked completely at home in 2017 — some 8 million people. Look for this trend to accelerate.
4) Corporate workspaces shrinking. As the work-from-home trend speeds up, companies will need less office space, saving them money—but putting pressure on real estate developers who may struggle to keep space occupied.
Some are adjusting by turning office space into apartments and other uses. Here in the Washington, D.C., area alone, some 7.9 million square feet of office space has been converted into residential dwellings, according to Jones Lang LaSalle, a commercial real estate brokerage firm.
5) Reduced strain on roads. As more people work from home, clogged roads could see less traffic in the morning and afternoon rush. This in turn may reduce maintenance burdens on municipalities, reduce demand for fuel, ease carbon emissions and more.
It can also be a huge boon for workers, given that owning and operating a vehicle costs anywhere from $6,354 to $10,054 annually, depending on where you live and what you drive, says AAA. Think of the savings from tolls, taxes, gas, insurance and maintenance, not to mention time wasted in traffic.
6) Remote learning. Thanks to the coronavirus, Harvard University has told its students to move off campus by Sunday, and will shift classes online.
But it’s not just Harvard, of course. Schools at all levels across the country are shutting their doors and scrambling to make sure that students can still receive at least some semblance of an education.
While most of the growth in online learning has been at the college level, the National Center for Education Statistics reports, this could begin to trickle down in coming years to younger students as interactive software continues to improve. The physical maintenance of schools—facilities that are used just a few hours a day and often not at all during the summer—is also hugely expensive; Remote learning can ease the budget burden.
7) Retail and restaurant shakeout. As if brick and mortar retailers and the over-saturated restaurant sector didn’t have enough to worry about already. While the top 50 restaurant chains in the U.S. are barely growing — 1.2% in 2018 — the 51st through 200th-sized chains saw year-on-year median sales shrivel 2.3%, says one industry study. It’s not hard to predict what’ll happen when customers stop showing up altogether. The coronavirus may simply crush weaker players.
It may also be the final blow for retailers that have been on life-support for years, including, among many others, Sears (which has already declared bankruptcy), J.C. Penney, Pier 1, Rite Aid, even glitzy Neiman Marcus.
These retailers were barely hanging on to begin with. Now, an invisible virus, another import from China, may accelerate their final demise.
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