In the event of pandemic influenza, businesses will play a key role in protecting employees’ and customers’ health and safety as well as limiting the negative impact to the economy and society. The U.S. Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC) have developed a checklist for businesses. The checklist identifies important, specific activities that businesses can do now to prepare for protecting their employees and customers in the event that the current swine flu outbreak does, indeed, become a pandemic. Many of the steps could also be useful in other emergencies.
In a press conference on April 28th, 2009, Secretary of Homeland Security Janet Napolitano addressed swine flu as it affects the American workplace and what the U.S. Government is doing to try to stay ahead of the problem. She stressed that everyone has a role to play in preventing any further spread of the swine flu virus.
Any flu pandemic could have an adverse effect on the global economy; the financial and economic costs of the epidemic will ultimately depend on its severity.
Because Mexico is the epicenter of the swine flu outbreak, the Mexican economy would obviously be the most adversely affected in a number of ways. First, Mexico’s trade with the rest of the world could be disrupted. Indeed, many nations have already announced import restrictions on Mexican pork products. Mexican trade and tourism are likely to suffer, but the biggest effects on the economy likely will occur via domestic demand. For example, the Mexican government has announced that schools will be closed until May 6, and other businesses may shut down temporarily as a precaution. At a minimum, businesses will be affected as some people will choose to stay confined to minimize their chance of infection. Most of the confirmed cases of swine flu in Mexico have occurred in Mexico City. Although we do not know what proportion of Mexican GDP is produced in Mexico City, about one-quarter of the country’s population resides in the metro area. If enough people in Mexico City decide to curtail their daily activities, the short-term effect on the Mexican economy could be significant. (source: International Business Times)
So, will the current outbreak have an effect on the U.S. economy as well? Again, it just depends on how severe the situation becomes. So far, not that many Americans are staying confined, although many are choosing to wear masks at work or even walking down a city street. It’s hard to envision a large demand side effect on the U.S. economy other than the potential disruption of foreign tourism. However, potential supply side disruptions may already be in the pipeline as some Mexican-based companies are important in the U.S. supply chain. If enough Mexican workers choose to remain confined, then output in Mexican factories could grind to a halt, which could then adversely affect U.S. businesses that use Mexico as a supply source.
Right now we are at a stage where the best we can do is try to prevent the spread of the disease and take precautionary measures.