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Peter Cappelli: That vexing value of a life

Peter Cappelli, Wharton
Peter Cappelli
Peter Cappelli is HRE’s Talent Management columnist and a fellow of the National Academy of Human Resources. He is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School of the University of Pennsylvania in Philadelphia. He can be emailed at [email protected]

There are so many challenging issues raised by The Only Story That Matters Now (coronavirus) that it is hard to keep them straight. The most fundamental one is how much we are willing to pay, or more accurately lose, by shutting down the economy in order to save lives. This sounds like a policy question, but it is also a practical management problem because employers are gearing up for the challenge of bringing employees back to work when we know that doing so and ending social isolation will increase the risk that more people will get sick and die.

Many observers have noted–and the rest of us should as well–how remarkable it is that not only in the U.S. but around the world, citizens have been willing to isolate themselves, losing their income as well as their social contacts and interactions, in order to slow down the COVID-19 infection. More than 26 million Americans have already lost their jobs, and it could be a long time before they come back. Yet eight out of 10 Americans support the shutdown, a Kaiser Foundation poll out today finds. What makes this even more amazing is that the lives we are saving are unlikely to be our own, as the risk of death is concentrated among a small set of individuals, and the fact that the virus isn’t going away after social-isolation restrictions start to lift means that we are actually spreading out the damage and buying time for medical advances that may not come for a long time.

Short of events in the two World Wars, I don’t think there has been anything like the global mobilization and individual sacrifice of the coronavirus shutdowns, and it has been achieved with very little coercion.   We have truly–and voluntarily–bought into this mission.

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Those who point out that this shutdown is hugely costly and question whether it is worth it have largely been mocked for asking the question with the popular rebuttal that we should not put a value on life.  Any actions that increase the risk of infection knowingly are met with scorn. This matters for employers because bringing people back to work will increase the risk of infection–modestly, perhaps even trivially–compared to sitting on our couches by ourselves at home.

Of course, we do put a value on life, sometimes explicitly so. The U.S. government, for example, uses the figure of $11.5 million per life to decide whether regulations that might reduce deaths are worth the cost. It is impossible to avoid doing so as we constantly confront choices where there is a tradeoff between money and the probability of illness and death: Should we drive slower, buyer safer cars, get better smoke alarms? And the other side: Should we pay more to eat organic food, get more exercise? Health insurance companies essentially do so as well in deciding whether the cost of particular treatments are going to be worth the benefit.

What we don’t do is acknowledge that we are making that tradeoff. Perhaps especially as Americans, we have been unaware, uncomfortable and possibly unwilling to think of the tradeoff between money and the risk of illness and death perhaps because, with private healthcare, that tradeoff is rarely discussed explicitly. Sometimes we can pretend that there is no such tradeoff: When a little child is at risk and the story is in the news, we move heaven and earth to save them, and we all feel good about that.

Also see: HR execs taking cautious approach to reopening workplaces

Yet, we are incredibly inconsistent in what we spend to save lives. A few dollars given to the right agencies in developing countries can save a child’s life, for example, yet those organizations struggle to get funds. This inconsistency is the essence of the comparisons with flu that no doubt we all hear. How much more dangerous COVID-19 is than seasonal flu is something that doctors can debate, but there is no denying the fact that the price we have been willing to pay to reduce the death rate from the former is vastly, extravagantly more than we have spent to reduce deaths from flu.

This lack of awareness and inconsistency will soon matter a lot when we ask people to come back to work. It will be the same problem we have getting parents to let their kids go back to school or religious organizations to get people to attend services. It is akin to what labor unions used to face in persuading their members to undertake the costly process of going on strike and then persuading them to stop and come back to work, often for settlements that were little different than before. The idea that, after all this buy-in and social pressure to self-isolate, employees will happily return to their offices and workplaces is quite probably a mistake.

As I mentioned in last month’s column, there is evidence that employees trust what their employer is telling them about the coronavirus and the shutdown more than what the government is saying. But a Gallup Poll showed that only about 52% of respondents reported that their employer had articulated a clear vision and plan about how to respond to the coronavirus situation.

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So, what do we do? Making employees feel as though they are still doing social isolation probably helps–staying 6 feet apart, no big meetings (yay!), lots of sanitation and so forth. But the leaders also have to do some explaining: The risk we are taking in being at work is very modest especially compared to the risks we take in everyday life already, that any social interaction requires confronting those risks and getting society going again is just as noble a mission as was shutting it down. We should ask for volunteers to be the first ones back so that the new normal is already in place when the more skittish workers return. We should also marvel at the incredible and also costly exercise we have just been through.