Flu Pandemic: Is the U.S. Ready?

ST. LOUIS — If history is any guide, a modern-day influenza pandemic in the United States would likely hit city dwellers and non-whites the hardest, based on an economic analysis from the Federal Reserve Bank of St. Louis.

Thomas A. Garrett, an economist with the St. Louis Fed, wrote the analysis for the March/April issue of Review, the Reserve Bank's bi-monthly journal of economic and business issues. The publication is also available online at the St. Louis Fed's web site: https://research.stlouisfed.org/publications/review.

Researchers at the U.S. Centers for Disease Control and Prevention have estimated that deaths from a flu pandemic could total more than 200,000, with an initial cost to the U.S. economy of $166 billion, or about 1.5 percent of GDP. Moreover, the long-run costs could be even greater.

To find a comparable parallel, Garrett looked at the 1918 flu epidemic in the United States. "That pandemic killed 675,000 people in the United States," said Garrett, "which is greater than the number of U.S. troops killed in both world wars combined." He based his analysis on economic data from the period as well as newspaper accounts at the time, which provide some evidence of the pandemic's effects on business and industry.

Garrett's analysis reveals that Pennsylvania, Maryland and New Jersey suffered the highest mortality rates in 1918, while Michigan, Minnesota and Wisconsin had the lowest.

His research shows that influenza deaths were generally greater in cities than in rural areas. In fact, he found that influenza mortalities in U.S. cities were three to five times higher, on average, than during a non-pandemic year. Interestingly, the cities with the highest mortality rates in 1918 were all located in Pennsylvania: Pittsburgh, Scranton and Philadelphia. The cities with the lowest rates were all located in the Midwest: Grand Rapids, Mich., Minneapolis, Minn., and Toledo, Ohio.

Although newspaper articles detailing the economic effects of the pandemic of 1918 were few, the anecdotal information Garrett obtained from reading some of the newspapers from the Fed's Eighth District is revealing. In addition to daily listings of the number of sick and dead, newspapers noted church, school and theater closings. Most businesses suffered huge declines in sales and revenue. Coal mine operators, industrial plants, rail linesall reported dramatic reductions in activity. (Not surprisingly, the only business in Little Rock, Ark., that showed an increase in sales was a drug store.)

While mortality statistics from both the pandemic and non-pandemic years suggest that non-white influenza mortalities were higher than whites, the latter experienced relatively higher mortality during the pandemic year (1918) than did non-whites. "It is likely," said Garrett, "that racial differences in influenza mortality rates reflect, to some degree, differences in population density. Census data show that the great majority of the urban population at the time was more than 90 percent white."

But would that picture change if an influenza pandemic struck today? Garrett's analysis shows that the non-white population in the United States has become much more urban (27 percent in 1910 versus 91 percent in 2000), compared with the white population (49 percent in 1910 versus 75 percent in 2000). While acknowledging that both racial groups have become more urban, Garrett said a modern-day pandemic "may result in greater non-white mortality rates because a greater percentage of the non-white population now lives in urban areas."

Another critical factor that will affect all Americans in a flu pandemic will be access to health care. "It stands to reason that mortality rates in urban area may be somewhat mitigated because the access to health care will be relatively greater than in rural areas," said Garrett. He also noted that urban dwellers generally tend to have greater incomes, "but this is an average and ignores those individuals with low incomes in urban areas who cannot afford health care." The key element, he added, will be the ability of emergency rooms and free clinics to remain open during such an emergency.

While there have been notable advances in science and medical technology, as well as health insurance coverage since the flu outbreak of 1918, Garrett concluded that "given our highly mobile and connected society, any future influenza pandemic is likely to be more severe in its reach, and perhaps in its virulence. Although we are certainly more prepared for an influenza pandemic now than in 1918, there should still be concern about government's readiness and ability to protect citizens from a pandemic."

With branches in Little Rock, Louisville and Memphis, the Federal Reserve Bank of St. Louis serves the Eighth Federal Reserve District, which includes all of Arkansas, eastern Missouri, southern Indiana, southern Illinois, western Kentucky, western Tennessee and northern Mississippi. The St. Louis Fed is one of 12 regional Reserve banks that, along with the Board of Governors in Washington, D.C., comprise the Federal Reserve System. As the nation's central bank, the Federal Reserve System formulates U.S. monetary policy, regulates state-chartered member banks and bank holding companies, and provides payment services to financial institutions and the U.S. government.

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