Gen Z Is Driving the Digital Health Revolution
Generation Z, comprised of young adults born from 1997 onward, is considered the first fully integrated digital-tech generation. Known colloquially as “Zoomers”, from an early age they have engaged with smartphones, the internet, and social media networks. This means that they not only remain well-connected to each other, 24/7, but they also grew up with the ability to quickly learn and verify information on virtually every topic in the universe.
Furthermore, Generation Z is highly aware of the importance of healthcare, particularly the connection between a sound mind and a fit body. Having grown up during difficult times from economic, environmental, political, health, and safety perspectives, in many ways they are more mature than young adults of previous generations. A particular trait characteristic of Zoomers is that they are largely aware of what is at stake and the impact their decisions will make on their future. This knowledge may in fact contribute to increased anxiety experienced by these young adults. Therefore, it should come as no surprise that Gen Z is driving the future of digital health.
In 2018, when the oldest of Generation Z reached adulthood, McKinsey & Company conducted a survey-based study to identify their most prominent characteristic. The study found that Gen Z’s modus operandi was a search for the truth.
This stands to reason during the current era of disinformation, bots, deep fakes, and catfishing. Gen Zers also view the truth as representative of their own form of self-expression, eschewing labels and the need to conform to societal expectations. They tend to be supportive of different lifestyles, diversity, inclusion, and each person’s ability to choose one’s destiny.
This counterculture viewpoint may sound a lot like other young adults of the past – from the Elvis rock-and-roll era to free-loving hippies to Vietnam War protestors. However, the digital-savvy Generation Z is better armed with tools of reach, influence, and dialogue. They view problems through a lens of analytics and pragmatism, recognizing that they can quickly look up things they do not know and have real-time discussions that can solve conflicts before they escalate. This highly evolved manner of problem-solving is being practiced by people who are not yet fully formed adults.
A more recent study concluded that many of the choices that Generation Z makes are influenced by health, including their habits, their relationships, and their technology. It is likely that the pandemic made a big impact on this generation, with many missing out on sports, dances, graduation, and a normal college experience. However, whether zooming classes or working their first job remotely from home, Gen Zers have proven to be flexible and resilient.
They have experimented with and honed coping mechanisms to help them handle difficult situations, from meditation taught in some schools to simply normalizing conversations about emotional health. Gen Z also has embraced the new ways healthcare is being delivered – from pharmacy Minute Clinics to smartphone apps to dorm room virtual doctor’s appointments. Unlike previous generations of young adults, Gen Zers do not see themselves as indestructible. They know they need help to cope with the stressors in their lives and understand that healthcare is inherently necessary to sustain their wellbeing. As a demographic that now represents one third of the global population, their enlightenment and participation is poised to change the healthcare industry.
How Zoomers Engage With Healthcare
Historically young adults have been notorious for their indifference to healthcare concerns. For starters, they are young and less prone to the aches, pains, and chronic conditions that accompany aging. They tend to have an invulnerable point of view because they do, in fact, have strong immune systems and are less likely to get sick than both younger and older demographics.
Unfortunately, approximately 30 percent of today’s young adults have no health insurance – more people than any other age group. Gen Z also has less access to employer-based insurance than other age groups. Yet despite these factors, Gen Z has a keen awareness of their need for healthcare access on an as-needed basis. Instead of “powering through” pain or physical needs, this generation largely seems willing to seek out care.
The fact that the pandemic occurred as the eldest of Zoomers reached the threshold of adulthood has likely created a long-lasting impact. Although they were less affected with serious illnesses due to COVID-19, the disruption to their young lives led to elevated levels of stress and anxiety. As a result, it impelled a new sense of urgency to seek care when needed.
Among the predominant reasons Zoomers visit a doctor are:
· For mental or emotional issues, such depression or anxiety (35%)
· For an acute health condition, such as a fever and sore throat (30%)
· For advice on improving sleep (30%)
· For advice on losing weight (30%)
· For a vaccine (30%)
· For a physical injury (26%)
· For sexual health (25%)
· For a routine blood test (24%)
· For a serious health problem (13%)
Virtual Health
Recent studies show that Gen Z young adults use digital health more than any other demographic. This is indicative of both their fluency with technology, and that recent digital trends mainstreamed while they were entering adulthood. A 2023 survey found that 62 percent of Gen Z respondents had used patient portals to communicate with health providers, and 55 percent had participated in virtual visits.
Hybrid Engagement
Interestingly, despite their comfort with remote engagement, the majority of Gen Z (66 percent) values in-person healthcare delivery. They happily accept a blend of haptic and online experiences, depending on what is most convenient and expedient.
It is worth noting that Generation Z is inclusive. They make no significant distinction between friends they meet online and friends they meet in person. For this reason, a McKinsey & Company report branded Gen Z as “communaholics”, because they seek opportunities to build personal relationships across all communication mediums.
That includes face-to-face interactions, which they particularly value with their physician. Contrary to what we might expect of this digital generation, Zoomers want to use their time in the doctor’s exam room to develop camaraderie – so that the provider remembers them when they call in with a question. They are not seeking more time with their primary care doctor or their therapist or a peer-to-peer support group, only that each interaction be personal and meaningful.
Here, too, Generation Z is driving a highly evolved approach that may help providers deliver a better quality of healthcare in less time.
Bricks & Mortar
We often think of Gen Z as a demographic that spent a large part of their upbringing inside their homes (playing video games and Facetiming with friends) as opposed to riding bikes and playing throughout their neighborhoods. Perhaps this is a reason why Gen Z is happy to leave home more often now, even in pursuit of medical needs. Instead of relying on virtual care options, 66 percent prefer the traditional doctor’s office visit, 53 percent seek out pharmacist consultations at their local drug store, and 39 percent are apt to visit an urgent care center.
Preventive Care Actions
In another departure from the traditional activities of young adults, Gen Zers spend more time and money on preventive health rather than for routine illness. For example:
· More than half use wearables (e.g., fitness trackers, smartwatches) to monitor their health. Among them, 40% would like advice on how to use the data gleaned from their wearables to make better health decisions.
· Mindful of not wishing to repeat another COVID-related lockdown, Gen Zers proactively embrace ways to strengthen their immunity. More than 50% report that they take vitamins and supplements, exercise more, and work toward maintaining a healthy weight to help ward off illness.
· Gen Z is also mindful of mental health. Forty percent report they actively pursue tactics to improve sleep habits and self-care routines.
Social Responsibility
As products of the new millennium, Gen Z is very attuned to the need for social responsibility and possess a well-rounded view of mind and body health. Consequently, they are willing to embrace non-traditional alternatives for self-care, especially health products that are vegan, organic, sustainable, and less invasive to the body – such as topicals, gummies, aerosols, or liquids.
Health Information
These days, nearly everyone “Googles” symptoms or conditions to learn more before they schedule a doctor’s appointment. As the chart below illustrates, Generation Z leads this activity by more than two times the average Millennial.
However, while Zoomers are digital savvy, they do not rely on the internet as their sole source of information. When making healthcare decisions, they regard family and friends as their primary sources. An astounding 80 percent of Gen Zers surveyed said they were comfortable discussing their physical health with peers, and nearly 70 percent were just as comfortable talking about their mental health.
Digital Health Tools
Nearly half (46 percent) of US patients are now in the habit of engaging with their healthcare providers via a mix of in-person visits, telehealth, apps, and patient portals. But when it comes to utilizing every type of healthcare digital tool, Gen Z leads the charge over all other demographics. Their most common activities involve patient portals (62 percent) and telehealth appointments (55 percent).
Preferred Gen Z digital tools include:
· Text Messaging (over phone calls and emails) for customer service and care management platforms
· Interventions and “nudges” to help them remember to attend provider appointments, refill medications, engage in exercise, and even receive nutrition tips
· Patient portal at a provider website or app to check appointments, lab results, make payments, or access healthcare information; send emails with questions for provider staff
· Health plan online self-service portal to find a network provider, chat in real time, upload documents, prior-authorization requests and appeals
Authenticity
Zoomers are digital experts. Slick advertisements and promotions are less effective with this generation; marketers must “connect” with them. This is conducted through likes, follows, influencers, online reviews, as well as concise and engaging educational content. Dubious claims and superlatives can and will be researched and refuted within seconds, and a company may be declared lame because it has no online reputation beyond its website.
A carefully constructed digital presence is not likely to impress Gen Z. They want an authentic existence – mixed reviews by workers, consumers, vendors, and even market analysts. They understand that no place or person is perfect. What they want to find out is the “real” story, so they can decide if they can cope and thrive in that environment.
Whether starting a new job, buying a new product, or choosing a healthcare provider, Zoomers make judgements based on a number of factors: online presence, personal recommendations (both online and offline), and their own empirical experience. Remember, Gen Zers do not pursue the ideal – they seek the truth.
Fact Checkers
This demographic is smart enough to understand that not all sources are reliable. They are savvy enough to identify and rely on sources they know, and fact check by cross-referencing multiple sources as part of their virtual and offline experience.
While Gen Z can be more science and data driven than previous generations of young adults, they may still find worthwhile health advice on YouTube or Instagram. That is why companies spend millions of dollars posting content across a wide range of social media websites.
As with older generations, often a single posting on social media can lead to a rabbit hole of research through other sources. This is why it is important for employers, health plans, and healthcare providers to ensure that their digital tools convey relevant and reliable information. Once a fact or claim is found to be suspicious or incorrect, Gen Z is not likely to trust that source again.
Gen Z is inherently skeptical and frugal – products of today’s societal circumstances – and they price shop. In fact, Generation Z adults are among the most likely to research prices of health treatments. Interestingly, this is exactly the type of engagement that the health insurance industry has been trying to nurture for the past two decades. Not only will Zoomers drive changes but they will actively avoid – and influence others to do so as well – providers, health plans, products, and even employers that do not live up to their expectations for value and authenticity.
Transparency
Going forward – now more than ever – transparency matters. A simple screenshot taken on their phone can be evidence that a company has not delivered on its promise. Transparency is the new foundation of trust, and trust is a hallmark of Gen Z’s identity. They are paying attention, they have lots of digital familiarity upon which to judge who does what well, and they will freely share their opinions and experiences, both good and bad.
Once again, their tools of reach, influence, and dialogue are omnipresent. And there are more of them, continuing to flood the US market with each passing year, than any other generation. But recognize that Generation Z is by nature, not confrontational. Unlike older Baby Boomers and Millennials at that age, they will not make demands. Zoomers will quietly initiate changes in the job market, the health industry, and society as a whole – not with a bullhorn, but with a smartphone.
If Gen Z is not satisfied with what they receive, these innovators will simply move on to find – or create – solutions that meet their needs.
Endnotes have been removed for brevity.
Congress recently passed the $1.2 trillion Infrastructure Investment and Jobs Act, including the largest transportation spending package in U.S. history. The legislation authorizes funding for a wide range of infrastructure projects, include updating and building new utility systems, electrical grids, transportation and energy projects, and even data infrastructure.
The bill’s funding will extend over a five-year period, so it is not expected to have a significant impact on fiscal deficit. The Congressional Budget Office estimates the legislation would add $256 billion to the deficit over the 2021-2031 period. Because the investments are focused on long-term productivity and innovation, this policy will likely improve labor force participation and economic growth and have a positive impact on inflation.
Local Funding
The majority of U.S. infrastructure is owned and operated at the state and local level, so federal funds will augment local investment, including public-private partnerships, to stretch the bill’s resources even further. Throughout the country, infrastructure projects have been in the planning stages for years, so an immediate influx of federal funds with existing state and local budget allocations and private commitments will likely launch many projects off the ground quickly.
Highways, Roads and Bridges
The nation’s roads and bridges are to be repaired and rebuilt with an emphasis on climate change resilience, safety and equity among geographic and demographic cross sections. The goal is to invest $110 billion in today’s 45,000 subpar bridges, highways and major roads, as well as support major transformational projects. The package includes a first-ever program designed to make roads safer by reducing traffic fatalities.
Investment Opportunities: The construction aggregates industry is not glamorous, but it generates the raw materials used to form compound materials such as concrete. Companies that produce aggregate materials (e.g., gravel, crushed stone, sand) mine them from natural sources such as pits and quarries. With funding authorized for highways and building infrastructure, construction aggregate companies are poised for substantially higher revenues.
The Biden administration also has indicated its preference to buy American, so U.S. steel companies should have an advantage over foreign competitors, particularly in the wake of global manufacturing and shipping delays. Not only is steel well positioned for industrial buyers, but it likely will benefit from pent-up demand from auto manufacturers.
Manufacturers of construction, roadbuilding, earthmoving and mining equipment can expect more procurement orders in the coming months. In order to ramp up capabilities faster than they can bolster their balance sheets, contractors are more likely to rent equipment in lieu of buying, which should benefit heavy equipment rental companies.
Reliable High-Speed Internet
Broadband internet keeps Americans connected and more productive in their jobs, education, communities and relationships. Yet today, more than 30 million Americans live in areas with poor to no broadband, particularly in rural communities throughout the country. The infrastructure bill authorizes a $65 billion investment in broadband infrastructure deployment to provide universal access to reliable high-speed internet. Moreover, the bill includes provisions to help reduce internet service fees to make access more affordable.
Investment Opportunities: Manufacturers of wireless towers and power management companies that supply the electrical components and systems for wind and solar farms to integrate them into the national grid.
Clean Water
America’s water utility infrastructure is in dire need of an upgrade. Presently, as many as 10 million American households and 400,000 schools and childcare centers lack safe drinking water. This bill allocates $55 billion in water infrastructure and would eliminate lead pipes for thousands of communities, including struggling cities, rural towns and Tribal Nations to ensure that all Americans have access to clean water.
Investment Opportunities: Utilities and companies that specialize in water distribution, water filtration and flow technology; water treatment/purification firms; manufacturers of pumps, valves and desalination units; and other companies specializing in water-related solutions.
Public Transportation Systems
On the whole, America’s public transit infrastructure generally lags that of other developed nations, and what currently exists needs repair and inadequate for our population growth. The nation has a multibillion-dollar repair/replacement backlog on more than 24,000 buses, 5,000 rail cars, 200 stations, and thousands of miles of track, signals and power systems.
The infrastructure bill’s $66 billion allocation offers the largest investment in passenger rail since the beginning of Amtrak. This investment will position railways for a central role in our transportation and economic future, establishing safe, efficient and climate-friendly alternatives for transporting people and freight. Focus areas will include modernizing the Northeast Corridor and expanding passenger rail service to areas outside the Northeast and Atlantic coastline.
The public transit investment also includes upgrades to the country’s airports ($25 billion) and ports ($17 billion). The focus will be on reducing congestion and emissions as well as enhancing electrification and other low-carbon technologies. These enhancements are forward-looking in order to strengthen our supply chains and prevent disruptions such as those experienced during the pandemic and extreme weather events.
Investment Opportunities: Railroads, airlines, trucking, marine transportation, delivery services and logistics companies.
Clean, Reliable Energy
The U.S. is not the only country pursuing cleaner, more sustainable energy sources. In fact, we are behind many other developed countries in our efforts. The global climate summit in Scotland this year highlighted a non-binding call for only zero-emission vehicles to be sold worldwide by 2040. The European Union is working toward a zero-emissions market by 2035.
Even auto manufacturers have recognized that electric vehicles will become a mainstay in our future, with some making plans to end production of gas- and diesel-powered cars within 20 years. This acceptance is supported by consumers, as evidenced by a recent poll that found 50% of U.S. voters support a mandate requiring all new vehicles to be electric within the next 10 years.
A nationwide fleet of electric consumer and commercial cars will require a national network of electric vehicle (EV) chargers. The infrastructure bill has allocated $7.5 billion for 500,000 EV chargers to be installed along highway corridors to facilitate long-distance travel and within communities for convenient charging options. This investment is designed to create new jobs and encourage the adoption of EVs in an effort to reduce emissions and improve air quality.
The infrastructure bill also allocates $65 billion to upgrade the country’s power infrastructure with new lines for the transmission of renewable, clean energy. Not only will sustainable energy technologies reduce emissions, but the investment could basically pay for itself in light of the $70 billion a year lost due to power outages in the U.S.
Investment Opportunities: Companies that build electric cars and EV charging stations; companies that manufacture government fleets of electric vehicles, such as U.S. mail trucks. Commodities used in green materials, such as copper. In addition to being the preferred metal for electrical wiring and plumbing, electric vehicles and renewable energy sources (e.g., wind, solar) use more than four times as much copper as traditional internal combustion vehicles, oil and gas.
Bear in mind that while certain stocks may grow due to increased company revenues, the overall economic impact of the new bill may be limited because government spending will occur over a five-year period. However, unlike past infrastructure bills that focused on creating jobs and minor road repairs, this historic infrastructure bill creates a foundation to help drive economic growth for years to come.
One effective way to get exposure to industries poised to profit from the infrastructure bill may be to invest in a diversified infrastructure or utility fund (mutual fund or ETF). This type of one-stop-shop investment spreads capital across a number of electric providers, water and sewage services, engineering and construction firms, rail travel companies and more.
Administrative priorities and policies often generate new investment opportunities that are worth considering. However, they should never replace your long-term investment strategy, so new stock purchases should align with your current equity allocation. Consult with your financial professional for advice on specific holdings or sector positions and how they may impact your overall investment strategy.
Endnotes have been removed for brevity.
In the Spring of 2020, when Congress passed the CARES Act, the legislation expanded the types of products that can be paid for with a health savings account (HSA). Funds from this account may now be used to pay for a wide range of products, including over-the-counter medications, cooling headache pads, feminine care items, birth control pills, pregnancy and fertility tests, as well as many mental health treatments and services.
An HSA is a tax-advantaged savings account that can be opened in conjunction with an HSA-compatible high-deductible health plan. The savings account is designed to help people save money to pay for out-of-pocket expenses such as their plan’s high deductible, copayments, and other qualified purchases. In 2021, the annual contribution limit for a health savings account is $3,600 for individuals and $7,200 for families. Account owners aged 55 and older can make an additional $1,000 contribution each year.
Prior to passage of the Patient Protection and Affordable Care Act (PPACA) in 2010, it was nearly impossible for someone diagnosed with bipolar disorder or schizophrenia to obtain individual health insurance in most states. Even people suffering from or who had a history of mental health disorders such as depression, anorexia, or alcoholism could be declined or charged higher premiums for coverage. However, the PPACA mandated that small-group (fully insured) and Medicaid expansion plans cover 10 essential health benefits – which included mental health and substance abuse services.
However, while these services must be covered under a health plan, they may be subject to a deductible, co-pays or co-insurance. People with an eligible high-deductible plan may open a health savings account and contribute money on a pre-tax basis. These funds can then be used to pay for qualified expenses before coverage kicks in.
This essentially means that untaxed income may be used to pay for mental health and substance abuse expenses that may or may not be covered by their health plan, such as:
· Behavioral counseling, psychotherapy visits, and psychiatric appointments
· Couples and family counseling, including group therapy
· Prescription and over-the-counter medications
· Mental and behavioral health assessments, evaluations, and tests
· Substance abuse treatment programs
· Psychiatric hospitalization
· Rehabilitation facilities
· In-home mental health support services and life-care services for mentally disabled individuals
· Alternative therapies, such as chiropractic, acupuncture and massage therapy
· Lodging and meal costs when traveling to obtain mental health services
· AA meeting expenses and qualified transportation expenses to and from AA meetings
While stress is not generally classified as a medical condition, it can contribute to poor mental health. In addition to sessions with a psychologist or psychiatrist, HSA funds may be used to pay for alternative forms of therapy that have proven to be effective at mitigating stress. For example, proper spinal alignment via chiropractic therapy can effectively reduce the body’s cortisol levels, which in turn diminish the impact of chronic stress on the body. Acupuncture may be used to regulate stress hormones and reduce inflammation by stimulating the vagus nerve. And massage therapy can provide both temporary relief from stress and help the body learn how to downregulate the production of stress hormones.
In some case, non-traditional mental health treatments may be permitted to be paid for with HSA funds, but they will likely require a Letter of Medical Necessity (LMN) from a licensed provider. For example, a psychiatrist may recommend yoga to help manage anxiety, or a solar lamp to relieve depression. In other words, if a mental-health practitioner deems the treatment necessary, it is likely HSA-eligible. The patient should maintain some documentation to this effect, but it’s not necessary to present evidence to the financial institution that serves as custodian of the health savings account. Use of HSA money is based on the honor system and not likely to require receipts and physician verification unless a taxpayer is audited.
One way to save money spent on mental health services is to use in-network providers. Regardless of how much the health plan covers, fees that have been negotiated by providers in the health plan’s network are bound to be less than out-of-network providers. For example, an in-network therapist may charge $50 for a one-hour visit, with a copay of $20 and insurance covers the rest. By contrast, an out-of-network provider may charge $100 an hour, with a $20 copay, and the insurer may pay only half the remaining amount. By staying in-network, the patient can use less of his HSA funds to help pay for the visit.
A recent poll revealed that 40 percent of people who have access to a health savings account do not fully understand them. This is unfortunate, but also not surprising because the rules surrounding HSAs continue to change. When Congress passed the CARES Act last spring, it reversed prior rules that prevented HSA funds from being used to pay for over-the-counter medications. Because the pandemic has dominated headlines over the past year, some of the little-known benefits of the provision related to health savings funds were not widely publicized. Employers should make a concerted effort to promote the loosening of HSA-qualified expenses, particularly given the challenging year we have all experienced.
In March, additional legislation was introduced that would permit the use of pre-tax FSA and HSA funds to pay for healthy living products and activities, such as gym memberships, fitness equipment, and sports league fees. Since many people find regular exercise helpful to mitigate stress and ward off more serious mental health conditions, the bipartisan Personal Health Investment Today (PHIT) Act would offer an additional means of paying for mental health activities with pre-tax funds.
Endnotes have been removed for brevity.
Following the longest recorded economic expansion in history, the U.S. hit its peak in monthly economic activity in February 2020. And yet, this was quickly followed by two consecutive quarters of economic decline — thanks to the coronavirus invasion on U.S. shores. In fact, the second quarter of 2020 suffered the steepest quarterly drop on record (9.1%), having never experienced a drop greater than 3%.
The fallout was immediate and severe. In April 2020, more than 20 million jobs were lost, wiping out gains achieved over nine straight years of job growth. Job losses were particularly egregious among lower-wage, lower-educated workers, as well as for women — largely due to layoffs in the leisure and hospitality industry.
By June, the National Bureau of Economic Research officially declared a recession, widely heralded as the worst since the Great Depression. The NBER defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales.”
However, quick moves by the Federal Reserve, a stimulus package passed by Congress and a concerted push by the Trump Administration to reopen the economy during the summer facilitated a remarkable turnaround. In the third quarter, the U.S. economy expanded by an annualized 33.1% — its biggest expansion ever.
The rebound was not without drawbacks. Gross domestic product (GDP) was still 3.5% below pre-pandemic level, and reopening the economy proved to be devastating in terms of human life. Whereas it previously had been prevalent mainly in large metropolitan areas and “hot spots” around the country, the coronavirus spread uncontrolled to virtually every state, city and town in the U.S.
While vaccines became available in December, the pandemic is far from controlled, and the economy may take quite some time to fully rebound. As of the end of 2020, only half of the jobs lost had been recovered.
The Shape of the Economy
In an effort to explain the various routes to recovery, economists describe these paths in various shapes, such as V, U, W and L. These letters, plotted on a line graph, offer a visual illustration of the trajectory of GDP, employment rates, industrial production indexes and other key metrics used to track economic conditions.
Z-Shape
The Z-shaped recovery is not very common at all, as it is the most optimistic scenario. With a Z, there is a quick crash followed by a quick ramp up in consumer spending, attributed to pent-up demand. In other words, the economic decline was not so severe that people lost their income and assets, so they more than made up for lost time by shopping, dining out, taking vacations and engaging in other activities that were temporarily waylaid. The Z-shaped recovery is quick and relatively painless.
W Shape
The W shape is characterized by a sharp decline, followed by a rapid (false) recovery, then another sharp decline followed by a full recovery. This scenario usually takes a couple of years for full recovery and is often referred to as a double-dip recession.
A prime example of the W-shaped recovery began in early 1980 when the U.S. economy experienced an initial recession, entered a recovery phase for almost a full year, but then sank back into a second recession between 1981 and 1982.
While economists continue to debate the shape the pandemic recovery will take, some assert that we are already in the second wave of the W after the initial spike and then dramatic rise last summer. As students returned to school and flu season began in the fall, the US experienced a much worse strain of outbreaks than before, and once again small businesses shuttered, students were sent back home for e-learning and corporations delayed plans for investment and expansion.
V Shape
Similar to the Z shape, the V features a sharp decline followed by a quick and full recovery, generally lasting less than one year. Initial observations, mainly fueled by political optimism, claimed that the pandemic recession would follow a V shape after the initial drop and summer reopening and recovery. Alas, that was short sighted, as the coronavirus followed its own airborne path of contagion and economic destruction.
U Shape
The most common economic recovery is the U shape, which accounts for about half of the U.S. recessions since 1945. It usually lasts between one and two years and is characterized by a gradual economic drop, followed by a period of stagnation and then a steady rise. It usually takes several quarters before GDP restarts an upward trajectory, but then there are no slides after recovery has begun. Examples of U-shaped recoveries include the 1973-75 recession during the Nixon years (which featured extremely high inflation), and the 1990-1991 recession that followed the savings and loan (S&L) crisis.
The Great Recession is another good example of the U-shaped recovery. While technically the recession lasted only 19 months (December 2007 to June 2009), it took many years for employment levels to resume pre-decline levels.
L Shape
The L shape looks a bit like a checkmark, with an initial sharp decline followed by a gradual recovery on an upward trendline. The initial decline can be quite severe, potentially a depression. It often features persistently high unemployment and usually takes several years to recover.
The L shape is widely considered the worst-case economic scenario because large numbers of workers remain unemployed for long periods of time. This tends to leave factories and equipment idle or underutilized — stunting the opportunity to revitalize growth and consumer spending.
The Great Depression followed an L-shaped recovery starting with the stock market crash of 1929. Real GDP contracted sharply, unemployment peaked at 23% and stagnant growth persisted for more than 10 years.
K Shape
The K shape refers to an uneven recovery. In other words, some aspects of the economy begin to recover while others sink even lower. As the pandemic wears on, many economists and politicians have begun to point out discrepancies in the economic recovery that can best be described by the K shape.
For example, look at unemployment. Many professional white-collar jobs have been able to transition to a remote model in which people can work from home. Also, essential workers — ranging from healthcare professionals to truck drivers to grocery store clerks — find themselves in high demand and remaining gainfully employed, although at greater risk for contracting the virus.
But then there are other jobs, such as pilots and flight attendants, specialist physicians and therapists, and a whole range of hospitality workers who have been laid off or had their hours reduced. Working mothers dropped out of the workforce as childcare centers closed and someone needed to be home to oversee children’s online schooling. According to a Local Economic Impact Report, nearly 100,000 small businesses permanently shut down during the pandemic — including hair salons, daycare centers and tattoo parlors.
There are recovery discrepancies by industry. For example, technology and e-commerce have taken off, as companies adapt to demand for more online transactions, whether ordering groceries online or conducting Zoom conference calls among colleagues working from home. And yet, even in the healthcare field, things like elective surgeries and dental work are discouraged to preserve much-needed hospital beds and help slow the spread of the virus.
Interestingly, as consumerism dropped, the U.S. personal savings rate soared to its highest recorded level. Furthermore, the stock market fully recovered from its dramatic drop in the spring of 2020. However, simultaneously, millions of households are behind in their rent or mortgage and have difficulty paying bills and even keeping food on the table.
These are all examples of how the K-shaped recovery works. One “arm” of the K falls as some demographics suffer financially, while the other arm shoots upward as facets of the population increase their wealth as a result of the pandemic.
It’s worth noting that a K-shaped recovery often leads to fundamental changes in the structure of the economy or the broader society. There will likely be an effort to beef up publicly funded safety nets and private opportunities for more equitable income and wealth distribution.
With the deployment of vaccines underway, the prognosis for a 2021 recovery is strong. Most economists observe that the economy is on a slow but steady path trending upward. However, for thousands of businesses and millions of people, the progression to pre-pandemic financial levels may be quite different. Many shuttered jobs many not rematerialize as companies replaced them with automation or learned to function without them. Small-business owners who had to close up shop or file for bankruptcy may suffer for many years to come.
The final shape of the economy is usually determined in hindsight. There are always many variables to consider, but that is particularly true now — with a new president, a new set of priorities and no way to predict the long-term health and economic fallout of COVID-19.
Endnotes have been removed for brevity.
Typically, the scenario for new moms returning from maternity leave has not been ideal. In some ways, the pandemic has made this situation even worse. But looking forward, the pandemic could set a course for a better future for working moms.
First off, though, the outbreak of the coronavirus has had a devastating impact on working women. Schools shut down, businesses scaled back, and many folks lost their jobs. As a result, more women have dropped out of the workplace to assume the traditional role of providing childcare when schools and childcare centers closed for months on end. Unlike other modern recessions, at its peak this decline vaulted women’s unemployment by 2.9 percentage points over men’s unemployment.
But the story isn’t just about layoffs. A 2020 Women in the Workplace study by McKinsey & Company revealed that one in four women have considered quitting their job or reducing their hours due to the pandemic. They cited company inflexibility, caring responsibilities and stress as primary reasons.
According to Bureau of Labor Statistics’ pre-pandemic numbers, women held the majority of jobs in the US, at 50.04 percent (excluding farm workers and the self-employed) at the end of 2019. Among them, about 70 percent of working women are moms. It’s safe to say that if you eliminated working moms from the workplace, the American economy probably would sink very quickly. And yet, women often feel they must choose between their careers and family life. This is not a common complaint among men.
Mom’s Priorities
When a mom who recently had a baby goes back to work, her concerns may be a lot different from her employer. For example, the employer may be primarily interested in helping her manage her time (particularly if she needs to breast pump while at work), maximize productivity, and avoid absenteeism.
These are indeed concerns for a mom, but they may not be her biggest issues. Here’s a list of other things a woman with young children worries about:
· A reliable childcare plan, including alternative options should their regular provider be unavailable.
· The physical repercussions of giving birth, breast feeding, and subsequent lower energy levels – on top of all the other responsibilities she held before.
· Due to nighttime feedings and poor sleep – the inability to work at the same level as before for quite a while. This can generate feelings of guilt; self-disgust; inadequacy; worry about losing ground in her career; feeling like workplace accommodations and flexibility are “favors” she cannot repay; and fielding resentment from coworkers who feel young moms get accommodations that they do not.
· Breast pumping – having the proper equipment, a private place, a cleaning station out of view of co-workers, the time to pump several times a day, the need to pump during a scheduled or impromptu meeting or when racing to meet a deadline.
· The unknowns – the newborn not sleeping through the night, health concerns that could develop, babysitting crises, post-partum depression, family dynamics thrown out of whack – such as jealous siblings or even her husband.
· No longer having the capacity to work long hours, be on-call to put out fires, and having her attention constantly divided.
· A worrisome desire to prove that she can return to work and perform at the same level, as if nothing changed.
· Not many men experience these issues…ever. So, yes, women are concerned about time management and productivity, but they don’t think in those terms. They think about the actual, daily impediments to those goals, and that is why employers need to become more intuitive about how to support newborn moms.
Breast Pumping at Work
It’s important to support breast pumping for many reasons, and some of them can impact long-term productivity. For context, note that US breastfeeding rates tend to drop significantly (40.7 percent) three months after birth, which is when most mothers return to work. However, the American Academy of Pediatrics recommends breastfeeding infants for six months to a year, in order to satisfy the nutrition and antibody immunity value of breast milk. In turn, this can lead to healthier babies and fewer sick leave absences by working moms as their children grow. Unless employers are in favor of a one-year maternity leave, it is in their best interest to accommodate lactating moms.
To establish a designated breast pumping room, an employer should provide:
· A private room with a door that locks
· A comfortable chair
· A place to set up breast pumps and accessories
· Electrical outlets
· A microwave to sanitize supplies
· A sink to clean supplies
· A refrigerator to store milk
· Restful lighting and artwork
· A scheduling system for moms to work out pumping times
In addition to a breast pumping room, a workplace lactation program may offer access to a lactation consultant or even fellow working mom mentors with whom they may commiserate and exchange advice on workplace situations, newborn management, childcare issues, and even family dynamics. A new mom mentorship program can help create a support network, which increases the chances of moms staying on the job, and help them remain engaged, focused, and productive.
There is a return on this type of investment. Research shows that employers that implement a lactation program, benefit from a $3 return for every $1 invested in their moms. These savings result from lower healthcare costs, increased productivity, and reduced absenteeism.
Despite these employer benefits, workplace lactation programs are still relatively rare. They are mostly sponsored by large, professional service companies. Unfortunately, women who have the most difficult time juggling work demands with a newborn tend to have low-paying jobs. Not only would providing a private breast-pumping room be helpful to the mom, but there is growing evidence that they help change and normalize coworker perspectives toward new moms in the workplace.
Reintegration Plan
Reintegration actually begins before a mom goes off on maternity leave. There are numerous things a pregnant woman worries about before her child is born. If she has a clear understanding about what is available and expected of her when she does return to work, this can help ease her mind and allow her to focus on childbirth, the newborn, and her family’s needs during maternity leave.
Employers should establish a process whereas pregnant moms are informed of the reintegration plan prior to their leave, which may include check-in conversations initiated by her supervisors and/or Human Resources while on leave. Other elements of the plan may include the option of reduced hours during the first three to six months of return; a general overview of any changes and organizational updates that occurred while they were gone, and a flexible schedule for both new moms and new dads – to support the demands of newborn family life.
Gender Bias Training
You can provide top notch privacy and reintegration plans for mothers of newborns, but they will not do much to assuage their insecurities about workplace perceptions. To embrace motherhood as part of the company culture, employers might consider gender bias training. For some, seeing pregnant women in the workplace can engender feelings of resentment.
According to the World Economic Forum, it will take another 217 years to achieve economic gender parity at our current pace. Women want to work, the economy needs them to work, and no one wants to stymie the proliferation of the human race. Therefore, it is important for employers to work toward advancing gender parity at a faster pace.
Policy Recommendations
The following are some additional recommendations that can improve the maternity leave and reintegration process in support of working mothers.
· Consider extending a maternity policy to at least six weeks, which – according to the American Academy of Family Physicians – is the average time it takes for most women to feel physically recovered from giving birth.
· Consider offering childcare assistance or on-site childcare, which are particularly attractive benefits to young adults seeking employment.
· Consider offering flexible work schedules, such as working from home, telecommuting, and staggering work weeks.
· Consider job-sharing arrangements and cross-training among department members so that any employee can take leave and feel confident his responsibilities will be adequately covered – and will be able to offer the same level of support for other colleagues on leave. This not only creates a cooperative work environment, but it can help employees gain valuable experience that benefits both the company and their own careers.
· Advertise maternity resources. An employee may work at a company for many years before thinking about having a baby, and probably never paid attention to maternity benefits. Make these benefits visible and easily accessible to all employees.
· Consider creating a designated website that details all maternity benefits in one place that is easy to access from home.
· Create a parental leave handbook that details all benefits, resources and tools available. Consult your working parents for feedback on what they would have like to have known when they were on leave – and ask them to volunteer as mentors with contact information for those on paternity leave.
Studies have shown that in the work environment, men are valued based on their potential, but women – particularly working mothers – are judged based on their past performance. Can they perform at the same level as before they became mothers?
It’s important to recognize that working moms have two fulltime jobs. It unreasonable for them to continue to prove and reprove their dedication after every child. They should not have to work harder to reinforce their perceived worth. The ability to juggle a newborn with a job should be held in the highest esteem as part of the company culture and demonstrated through the employer’s actions and accommodations.
Fortunately, a silver lining of the pandemic is that many companies have adapted quickly to the work-from-home model, which can greatly benefit moms with newborns. The ability to work from home gives them the flexibility to breast pump and even take quick, energy-boosting naps as necessary – which can actually get them back to work faster without disrupting their new job as a newborn mom.
Endnotes have been removed for brevity.