As Pandemic Continues, NIU's Center For Governmental Studies Examines Future Economic Trends

May 4, 2020

The Center for Governmental Studies at Northern Illinois University is taking a look at what lies ahead as lockdown restrictions loosen.

CGS has been at NIU for more than 50 years. Its researchers have conducted studies on issues related to the economy, politics, community, and the workforce.  Dr. Norman Walzer is a senior research scholar at CGS with a background in economics. He said current studies aren’t looking as much at the immediate consequences of COVID-19.

"Our focus is relatively more now on what the longer-term impacts are of the virus."

Dr. Norman Walzer is a Senior Research Scholar at CGS.
Credit NIU CGS

Walzer said in terms of businesses, small town retail is likely to see losses, particularly in rural areas.

"They weren’t doing all that well," he said. "In some cases in the smaller towns, the owners were getting older.” 

Other changes Walzer predicts are a direct response to the coronavirus and social distancing. He said tech-based services may see a rebound.

“I think we’re going to find more and more restaurants with takeout services or delivery services," he said. "Those kinds of things. Amazon is booming. Probably in the very near future, we’ll be looking at the use of drones and that kind of stuff.” 

Factory shutdowns due to coronavirus, such as what occurred at the Smithfield meat processing plants, may also prompt changes in production.

“You’re going to see a bigger push to automation," Walzer said. "I think this was kind of in the wings anyhow, but I think we’re going to recognize that we would not have as many of these closures if in fact there was more automation.” 

As for the labor force, Walzer said rural areas have already seen shortages, particularly with retirements and residents moving away. But companies have made some efforts.

“Businesses have been trying to use flexible schedules, make more age-friendly work spaces. These kinds of things to keep people staying on the job a few more years.” 

He said people who have been unemployed for a while may not return to the workforce. This applies to both older and younger workers.

“In some of the young adults’ case, my guess is they will find ways to work on the internet, they may go into the gig economy, they [may] do various things that maybe were kind of in the back of their minds anyhow.”

Walzer also said two factors could affect future spending. One is ensuring that stimulus money is properly distributed throughout the country. Another is the effect of a rebounding stock market. Walzer said this in turn could have a “wealth effect.” 

“If the stock market is up, you feel wealthier. If you have holdings, you feel wealthier. And so you go out and buy things that maybe you wouldn’t buy if the stock market were down.”

Walzer said current activities at CGS include policy profiles on what’s happening to job postings in Illinois. He noted that it’s not as simple as comparing current numbers with those of the previous recession.

"So what we’re seeing is almost on a month-by-month basis of trying to figure out what is going on."

CGS is also working with communities on various projects, such as how to carry out a business transition.

“Business where the people are getting close to retirement but not ready yet, how to transition that to young adults. We’re working on some stuff with the University of Minnesota on that, on a multi-state study.” 

And even though most university staff are working remotely, Walzer said CGS continues to play an important role for students. He says CGS acts as a kind of laboratory for students in the social sciences. 

"Kind of a transition into their careers,” he said.