Self-reported disability data from the Census Bureau shows that there are cumulatively 1.7 million more working-age adults claiming to have a disability since the middle of 2020, according to Richard Deitz, an economic research adviser for the regional bank. The analyst points to long COVID, a condition marked by fatigue and brain fog that can last for months after catching the virus, as a primary factor behind the phenomenon.
“The economic costs of long COVID is estimated to be in the trillions. While many with long COVID have dropped out of the labor force because they can no longer work, many others appear to be working despite having disabilities related to the disease,” he remarked. “Some of these so-called long-haulers have relatively mild symptoms that may not significantly interfere with daily life, but others have symptoms serious enough that they have become disabled.”
Indeed, one Harvard University study cited by Deitz estimates that the economic costs of long COVID, primarily induced by decreased quality of life, reduced earnings, and higher medical spending, sum to approximately $3.7 trillion.
Research into the effects of long COVID, however, is limited by the novelty of the condition. “It is not clear if, when, and how those with long COVID will recover,” Deitz added. “A recent study suggests many eventually do, but the disease is still new, and much remains unknown.”
The phenomenon occurred after the lockdown-induced recession prompted millions of Americans to retire or otherwise exempt themselves from the job market. The labor force participation rate had already dropped from 66% in 2008 to 62% in 2022, falling another 3% between February 2020 and April 2020 alone before rebounding in recent months, according to data from the Bureau of Labor Statistics. Labor shortages have contributed to inflationary pressures as companies struggle to hire essential staff.
The Department of Health and Human Services and the Department of Justice released guidance last year announcing that individuals experiencing long COVID are eligible for protections under the Americans with Disabilities Act. This federal law protects disabled people from discrimination. Beyond fatigue and decreased cognition, other symptoms can include chest pain, heart palpitations, joint and muscle pain, and difficulty breathing.
“Private employers with fifteen or more workers, as well as state and local governments, may be required by law to make reasonable accommodations for those with long COVID, though workers may struggle for an accurate diagnosis from their physicians since there are no explicit tests for it,” Deitz said. “Employers and employees typically work together to determine whether a reasonable accommodation exists that would enable the employee to perform their job.”
Despite continually low participation in the job market, robust employment rates have been a bright spot in an otherwise beleaguered economy. The unemployment rate edged downward to 3.5% last month, according to data from the Bureau of Labor Statistics, which followed months of already historically low degrees of joblessness. Policymakers at the Federal Reserve have cautioned, however, that contractionary monetary policy meant to battle inflation could negatively impact employment.