CAIT-affiliated researcher Dr. James W. Hughes has been tracking the economic recovery from COVID-19 in NJ. Now he takes a look ahead as the long recovery crawl continues in 2021. Photo ©Rutgers Today.

CAIT-affiliated researcher Dr. James W. Hughes has been tracking the economic impacts of the ongoing COVID-19 pandemic through his series of Fast Track Research Notes. As we head into the new year with a recent upsurge of cases both nationally and regionally, he provides some new insight on how the situation continues to develop and what the future may look like.

2020 has been shaped by the COVID-19 pandemic. Whether it is how we go to work, school, socialize, or engage with transportation, life as we know it has been changed—and this impact is expected to continue into the new year.

Dr. James W. Hughes, CAIT-affiliated researcher and dean emeritus of the Edward J. Bloustein School of Planning and Public Policy, has been tracking these regional impacts throughout the pandemic. As we enter the new year, here is what changes may be ahead.


By the Numbers

By the start of fall 2020, New Jersey had regained half of the jobs lost due to pandemic-driven economic contractions of March and April, as highlighted in the Rutgers report, “Coronavirus Economic Advances Wane: Fast Lane to Slow Lane in New Jersey and the Nation.”

Specifically, 57.2% of the 831,300 jobs lost in the state were recovered by October, leaving a deficit of 355,500jobs, while the nation as a whole had recovered more than half of jobs lost as well with more than 10 million workers still unemployed. That said, experts highlighted that this strong initial bounce back was headed into a slower recovery crawl as growth began moderate.

Dr. Hughes said that these national and regional patterns are holding true as private industry has seen monthly growth but in steadily smaller increments. At the same time, an upsurge in COVID-19 cases both in the state and nationwide puts these developments in jeopardy. It is likely that economy will face a very difficult winter before a renewed recovery begins in the spring of 2021.

Nationally, recent data shows the U.S. hitting its highest 1-day death toll with a reported 3,054 COVID-19 related deaths as of December 9th. Additionally, a 10% increase in cases has been seen over the previous seven days as states reported 210,000 new cases. In New Jersey, state health officials have recently forecasted this second peak of the virus to result in between 6,300 and 9,100 daily positive tests and 5,700 to 7,100 patients hospitalized over the next two months.

An upsurge in COVID-19 cases will most likely slow growth even more, Dr. Hughes said.

“One month does not a trend make,” he said. “We really need several months of data to make a strong statement about how this upsurge will impact the economy in the region and to understand whether this is a blip or new trend. The uncertainty now is in the size of the upsurge in cases and what potential restrictions are set as a result.”

All that considered, Dr. Hughes said that states have learned from earlier shutdowns that may have been too broad and thinks that if new measures are put in place, they will be more surgical or refined then they were in March and April.

Many businesses and organizations have also had the opportunity to adapt to COVID-19 since the beginning of the pandemic, so from an economic standpoint he said there is little risk of falling all the way back to March or April numbers.


Public Transportation and the Workforce

Public transit agencies have been hit hard by COVID-19 as ridership has decreased due to public fear of the virus, as well as schools closing and offices turning to remote work. For example, the Metropolitan Transportation Authority recently warned it may have to cut services up to 50% and lay off approximately 100,000 workers without new federal funding, according to Politico.

An upsurge in cases could continue to make people hesitant about using public transportation Dr. Hughes said, as schools and offices may remain closed and fears of the virus grow.

A big component of the future impacts on public transit has to do with whether or not organizations start bringing employees back to working in the office soon or not. Dr. Hughes said that some companies have been vocal about wanting people back on site while others have seen benefits to teleworking.

“There has been a change in mindset of how work is perceived that might impact how it is reallocated after the pandemic,” Dr. Hughes said. “Many people are starting to recognize work as more of an activity than a place. There are arguments for both sides, but at the end of the day we will probably have less daily commutation volumes after the pandemic due to these shifts.”

He said that a range of hybrid work models may become commonplace, as organizations realize that they do not have to bring every white-collar employee back to pre-pandemic office space five days per week.

At the same time, certain types of workers will be impacted differently. Those who have been able to work from home so far may have been able to more easily avoid places such public transit systems, while essential and frontline workers may be more transit-dependent during this time.


Political Shifts

Following the 2020 U.S. Presidential Election this November, political changes may be on the way as well that could shift how the nation addresses a number of issues including transportation.

There is still a lot of uncertainty about what will happen next, especially with runoff elections that still need to take place in early January 2021. But, Dr. Hughes said that the need for infrastructure spending is one policy area where there is the potential for bipartisan agreement.

Finally, an effective COVID-19 vaccine would also significantly impact the regional economy and transportation. Manhattan, the economic engine of the region during the past decade, was hardest hit by the Coronavirus. It would stand to benefit the most by a successful vaccine.

Dr. Hughes said the big questions are when it will be available, and then how many people are going to want to take it. A recent Pew Research Center survey found that approximately 60% of Americans would “definitely” or “probably” get a vaccine for COVID-19, if it were available.

Latest news on the Pfizer vaccine is that U.S. regulators at the Food and Drug Administration authorized it for emergency use on Friday for vulnerable populations, and 2.9 million doses are expected to reach the United States over the coming days.