From the end of austerity policies to the worrying rise of compulsory digitalization, Harvard Kennedy School faculty see a world changed by the coronavirus pandemic.
June 24, 2020For months, the coronavirus has crawled across the globe. One person at a time, it has passed through millions, reaching every corner of the earth. And it has not only infected people, but every aspect of our human cultures. Policymakers and the public sector face their biggest test in generations—some say ever—as lives and livelihoods hang in a terrible, delicate balance. Facing health crises, economic collapse, social and political disruption, we try to take stock of what the pandemic has done and will do. We asked Harvard Kennedy School faculty, in fields ranging from climate change to international development, from democracy to big power relations, to tell us how this epochal event has changed the world.
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As the United States and countries around the world consider re-opening after COVID-19, we are faced with a crucial question: Is our current societal model working and, if not, what kind of societal model do we want for tomorrow? Staying the course would be a recipe for disaster. The current levels of social and economic inequality both globally and locally have become untenable, and the current pandemic only reinforces these inequalities. Moreover, we are pushing the limits of what our natural world can endure. The status quo must change if we hope to survive the combined health, social, economic, political, and environmental crises at hand.
In May, Isabelle Ferreras, Dominique Méda, and I joined forces to ask a simple question: What can we learn from the crises that we are facing? At the time, admittedly, our thinking was focused on making it through the COVID-19 period only. And yet, the solution we put forth in a joint manifesto, which has now been signed by 5,000 academics around the world, outlines a solution—democratizing work— that we hope can contribute to fighting the health, economic, social, and political crises stemming from COVID-19, as well as the longstanding crisis of anti-Black racism, for which calls for change have intensified in the wake of the tragic murder of George Floyd at the hands of the Minneapolis Police Department.
What these crises are first and foremost teaching us is that humans never were and are not resources. They invest their lives, their time, and their sweat to serve the organizations that they work for and their customers. As we say in the manifesto itself, workers are not one type of stakeholder among many: they hold the keys to their employers’ success. Without workers, there would be no manufacturing plant, no deliveries, no production. All workers are essential. They are thus the core constituency of the firm. And, yet they remain excluded from participating in the government of their workplaces—a right that is still monopolized by capital investors. This exclusion is unfair and unsustainable and it prevents organizations from reaping the benefits of workplace democracy.
What I have seen in my research is that workplace democracy may well be critical to the success of corporations in the future. I have been studying organizations that pursue social and environmental objectives alongside financial ones for more than a decade. It is time we turn to these organizations and learn from their work as the economy as a whole transitions towards setting clear goals for employee well-being, and environmental and social metrics, alongside financial performance. My research reveals a critical link to workplace democracy: organizations that are more democratic—that give a voice to their workers—are better at staying the course and pursuing these multiple objectives.
Finally, democratizing workplaces is one of the most promising avenues for creating more just (including more racially just) workplaces where all workers—workers of color, women, workers with disabilities—have real control over resources, and an actual say, as equals in the governance of their organizations. By giving employees representation in decision-making bodies and the right to participate and control their organization’s strategic decisions, we can collectively build institutions that are truly equitable and fair.
Julie Battilana is Alan L. Gleitsman Professor of Social Innovation, Harvard Kennedy School; Joseph C. Wilson Professor of Business Administration, Harvard Business School; and the founder and faculty chair of the Social Innovation and Change Initiative.
The single best way to strengthen the national economy right now is to help reboot local economies, which are reeling from the economic fallout of the pandemic. The United States has 90,000 jurisdictions—including cities, towns, school districts, and transit systems—that together provide the public with schools, water, sanitation, trash collection, fire safety, emergency medical response, and infrastructure.
Local governments are now on the front line in fighting the pandemic: responsible for organizing local testing, contact tracing, treatment and isolation programs, buying protective equipment, and setting up a system to eventually deliver a vaccine. But their revenues have collapsed—and will be hit even harder in the new fiscal year that started July 1.
State revenues are a mixture of sales and income taxes, federal aid and user fees. Following the 2008 financial crisis, most states prudently set aside “rainy day funds” in order to improve their balance sheets. This time the revenue shortfall will be far deeper and will quickly deplete these funds. Many revenue-producing activities—such as tourism, international airports, conventions, and sporting events—are unlikely to return to pre-pandemic levels for years. States that entered the pandemic in a poor fiscal position are especially vulnerable. And, unlike the federal government, states must balance their budgets.
Meanwhile, local communities face an existential crisis. Revenues from sales taxes and user charges (tolls, parking fines, hotel and restaurant taxes, and the like) have dried up. And across America, small businesses—many of which are minority and women owned—are failing. Local governments will face a second fiscal crisis if property values fall, leading to a decline in property taxes.
State and local governments have already laid off 1.5 million employees, most of them teachers. A further 1.5 million are in danger of losing their jobs next month. Congress has provided some $200 billion in aid to states, but this is no match for the estimated $1.3 trillion revenue shortfall expected over the next three years. The Federal Reserve’s $500 billion Municipal Lending Facility is welcome, but it is only available to states and very large jurisdictions and must be repaid within three years. This will not help thousands of medium-sized communities that wish to issue longer-term debt to finance critical infrastructure projects that generate jobs.
States and municipalities are already taking steps to mitigate the damage. These include restructuring their balance sheets, entering into regional recovery efforts, carefully examining operating costs, adopting job-shares, monetizing fixed assets, pruning overheads and working closely with community banks. But at the end of the day, these efforts alone will not be enough to prevent cuts in vital local services that often fall on the most vulnerable. If night bus routes are curtailed, the night-shift nurse will be left standing outside the hospital waiting longer to get home.
Studies conducted in the 2008 crisis showed that each dollar invested this way produced a return to GDP of $1.3 to $1.55. In the current environment, we need to strengthen local communities by providing a flexible program of cash-flow assistance and long-term liquidity to states and localities.
Linda Bilmes is Daniel Patrick Moynihan Senior Lecturer in Public Policy.
The nexus between work and home has raised some interesting questions about how we prioritize “care,” mainly child care, as a critical infrastructure that needs to be prioritized in any crisis management response. We often think about a disaster, such as a hurricane or earthquake, as impacting water or food supply, or an electrical gird. But what if the response to the crisis is everyone—absolutely everyone—stays home. We can wish for an “opening up” but if our kids are home—if we haven’t figured out the school and even college issue—then it all seems rather besides the point.
Juliette Kayyem is Belfer Senior Lecturer in International Security.
