The U.S. got some good news that the employment rate had fallen to 8.4 percent in July, but it is possible that that could jump back up thanks to the beginning of the school year. In an effort to prevent the spreads of COVID-19, school districts are being as cautious as possible about reopening for in-person instruction and that may mean that many parents are forced to give up work.
This fall will see a major experiment in whether remote educational learning is feasible. Of the 20 largest K-12 school districts nationally, only three are offering in-person instruction. And even those that are mainly are offering some form of mixed instruction.
And what is the strongest indicator of whether of a school district refuses to offer in-person instruction? The strength of the local unions. Now, to be fair, those unions are trying to protect their members, as they should. But as with all things there is a trade-off.
The Wall Street Journal is reporting that as many as 4.3 million people may be forced to stop working because their children will not be able to attend classes in person. That would boost unemployment by an estimated 2.6 percent, knocking the current rate up to 11 percent, according to Brevan Howard Asset Management, which did the study. The study estimates that this could knock the gross domestic product in 2020 down by 0.4 percent to 0.8 percent.
This is all based on the idea that if the students are learning remotely from home, those parents will feel obligated to stay home as well to watch them. I’m not sure how many parents will actually do that if they feel their child is old enough to watch themselves, but in all likelihood some will opt to stay home, so there will likely be some effect, which will affect the economically negatively.