COVID cases: South Africa’s mysterious coronavirus turnaround

Just weeks ago it seemed as if a nation was on the brink of chaos as a new strain tore through its population. Then something wild happened.

It has been a matter of weeks since South Africa was on the verge of a disaster.

Experts had predicted chaos as a new variant of the coronavirus tore through the country of 60 million people at the start of the year, and doctors were bracing for the worst.

The strain — which appeared to be reinfecting people who had recovered from a previous bout of COVID-19 and raised serious questions about an impending vaccination rollout — was infecting nearly 22,000 people a day by the middle of January.

In a sign that health agencies were missing cases, one in three tests taken in January were coming back positive.

Adding to the uncertainty about how the nation would cope, thousands of holiday-makers returned home from their Christmas breaks leading to fears of a number of superspreading events being thrown into the mix.

At the second wave’s peak, on January 19, there were 839 deaths linked to the disease in a single day.

But then, something remarkable happened. The number of new daily cases fell off a cliff and the number of deaths linked to the virus naturally followed.

On the latest count overnight, South Africa recorded just over 1000 new cases and 65 deaths.

The incredible drop in cases and deaths is even more remarkable because it happened without a large-scale vaccination campaign or a strict lockdown.

Now, fewer than 5 per cent of tests are finding traces of the virus and the government has lifted most of its remaining restrictions.

The reason for the monumental turnaround is not clear.

Other nations have seen cases suddenly drop without lockdowns too, but experts are beginning to piece together the reasons for this.

In India, for example, experts have suggested that many parts of the nation have reached herd immunity or that Indians may even have some pre-existing protection from the virus.

With the situation in South Africa, experts have basically thrown their hands in the air and admitted they do not know what has happened.

“Anybody who professes certainty (about why infections started dropping) is lying,” Harry Moultrie, a senior medical epidemiologist at South Africa’s National Institute for Communicable Diseases, told The Wall Street Journal. “There is so much uncertainty in all of this.”

One trait that South Africa shares with other nations that have seen mysterious drop-offs in cases is the limit to its testing capabilities, meaning there is likely to have been a lot more cases than the official figures suggest.

It also took measures to stop the spread, with the government making masks mandatory, closing beaches, enforcing a nightly curfew, stopping large social gatherings and even banning the sale of alcohol.

However, families were allowed to gather for Christmas and New Year, and the restrictions came after tens of thousands of South Africans working in big cities like Johannesburg had already travelled to see family in provinces where COVID-19 case numbers were growing.

The fears of superspreading events occurring as South Africans piled onto tightly-packed buses to return home after their holiday never materialised, and experts are still trying to figure out why.

Herd immunity is one suggestion, despite only about 1.5 million South Africans, around 2.5 per cent of the population testing positive.

The true number is likely to be much higher due to limits to the nation’s testing capacity, but experts have cast doubt over whether it is high enough to point to herd immunity as a reason for such a sudden and uniform drop in cases on a national scale.

Dr Moultrie told The Wall Street Journal scientists were looking at the role of certain networks, or individuals with many social or work contacts, in driving and eventually slowing down localised outbreaks in South Africa.

Another issue experts are looking at globally is whether people are voluntarily making changes to their lifestyles that will reduce the spread of the virus, without the need for government enforcement.

While, experts try to piece the puzzle together in South Africa, the government has declared that the nation’s second wave is over.

President Cyril Ramaphosa said at the end of last month that an evening curfew will remain in place between midnight and 4am, gatherings will be permitted subject to limitations on size and health protocols, and alcohol will be back on sale.

It has opened five international airports, but some land border posts remain closed.

While it remains to be seen what impact this will have on case numbers in the coming weeks, it is clear that the pandemic is far from over on a global scale.

Coronavirus cases are beginning to rise again worldwide, with a number of countries seeing their new infections surging in recent days and weeks.

In particular, Europe is seeing cases soar, with a third wave advancing swiftly across much of the continent.

The total of worldwide cases have been slowly climbing in recent weeks, bringing up the seven-day average.

On February 20, global new cases dropped to their lowest number since the middle of October with 398,366 new cases recorded and a seven-day average of 360,664.

However, on the last count on March 13 new cases had climbed to 492,351 and the seven-day average to 442,494.

Many nations that were badly hit over the northern hemisphere winter like the US for example saw cases sharply drop through February, bur the drop has levelled off since the start of March with a seven-day average of around 61,400 new cases a day.

However, there are many countries where cases are increasing, contributing to the upward curve of daily new cases worldwide.

The infection rate in the EU is now at its highest level since the beginning of February, with the spread of new variants of the COVID-19 virus being blamed for much of the recent increase.

Several countries are now set to impose strict new lockdown measures in the next few days.

Italy is set to reimpose restrictions across most of the country on Monday — a year after it became the first European nation to face a major outbreak.

There, authorities recorded more than 27,000 new cases and 380 deaths on Friday

Schools, restaurants, shops and museums will close with Health Minister Roberto Speranza saying he hoped the measures and vaccination program would allow restrictions to be relaxed in the second half of spring.

France meanwhile has recorded more than 26,000 new cases on the last count overnight. While the figure is a drop from 29,759 the day before, the situation in the nation’s hospitals is worsening.

Those in intensive care units edged higher by 57 to 4127, while emergency resuscitation units were running at nearly 82 per cent capacity, the highest since late November.

The French government has so far resisted pressure from health experts to impose a new, third lockdown in the face of rising case numbers.

Instead it has imposed a 6pm nationwide curfew and weekend lockdowns in two regions struggling to contain outbreaks while big shopping centres have been required to close.

In Poland, 17,260 new daily coronavirus cases were reported on Wednesday, the highest daily figure since November. New pandemic restrictions are likely to be announced this week.

In Germany, 12,674 new infections were reported on Saturday, a rise of 3117 from the previous week, as the head of the country’s infectious disease agency acknowledged that the country was now in the grip of a third wave.

According to John Hopkins University data, the worst affected nations per capita are in eastern and central Europe.

The Czech Republic is being hit the hardest with 1411 cases per one million people.

The country’s case rates have put a massive strain on its public health system – on March 5, the Czech government announced publicly that it had asked Germany, Switzerland and Poland to take in dozens of COVID-19 patients, in order to ease the burden on Czech hospitals that were running out of bed space.

The other worst affected nations include Estonia, Hungary, San Marino and Montenegro.

https://www.news.com.au/world/coronavirus/global/covid-cases-south-africas-mysterious-coronavirus-turnaround/news-story/37a576067f5d825b5bc141c90e5fb989

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Capital and Labor Both Suffer under Minimum Wage Mandates

President Biden and the Democratic Party have pushed hard to more than double the national minimum wage from $7.25 per hour to $15 per hour over the next four years. This aggressive intervention in the functioning of labor markets has been heavily criticized, including in two recent Mises Wire articles. Resorting to both theoretical arguments and results of empirical studies, Robert Murphy and Martin Jones show in a convincing way that such a drastic increase in the minimum wage is bound to have a negative impact on employment and in particular on low-skilled workers. Yet their case focuses primarily on the short-term job losses stemming from such an ill-suited policy. One should not overlook that the minimum wage hike is likely to impair capital accumulation, productivity growth, and future wages as well. It means that this supposedly welfare-increasing measure is actually going to hamper not only employment, but the improvement of standards of living in general.

As Ludwig von Mises wrote in Human Action, wages are set on a free market in accordance with the marginal productivity of the labor services provided. As the types of labor supplied and their performance are very specific, there is no uniform wage rate throughout the economy. In that respect, setting a universal wage rate for the whole economy, even if it is a minimum threshold, doesn’t make sense either. Moreover, once the government or trade unions succeed in imposing a wage level above the marginal productivity of labor, institutional unemployment results. It is hard to imagine how a mandated national minimum wage of $15 per hour would remain below the marginal productivity of all current employees in the US and would not produce additional unemployment. As a matter of fact, the proposed increase would make the US minimum wage the highest among OECD (Organisation for Economic Co-operation and Development) countries and probably in the world, both in absolute terms and relative to the median wage in the economy. The closer the minimum wage is to the median one, the larger is the probability that lower-productivity workers cannot be hired at an artificially imposed minimum wage level, and will be swallowed by the ranks of the unemployed. The risk of a large increase in unemployment is quite high given that a nonnegligible 19 percent of the wage-earning workforce currently makes less than $15/hour.

Several US states have already imposed higher minimum wages than the national one of $7.25 an hour. Yet none of the state top-ups has reached $15 an hour as of 2021, which means that the negative impact on employment will be felt in the entire country. Nevertheless, states where average wages are lower and which have not gold-plated the national minimum wage yet will be affected most. A cursory look at wage statistics shows large differences between annual median wages among US states. An increase of the minimum wage to $15/hour would be equivalent to an annual minimum wage of about $31,200 (OECD data), representing about 90 percent or more of the 2019 annual median wage in about twelve US states: Florida, Oklahoma, Kentucky, New Mexico, Idaho, Alabama, South Dakota, South Carolina, Louisiana, West Virginia, Arkansas, and Mississippi. This ratio is very high compared to the OECD average of about 55 percent. Seven of the US states have not even gone beyond the mandated national $7.25 per hour minimum wage so far, illustrating how disastrous the effects of this one-size-fits-all measure could be.

Dozens of empirical studies have shown that hiking minimum wages undermines employment opportunities among low-skilled workers and increases unemployment, in particular when the increase is massive like the one proposed by the Democrats. A study by the Congressional Budget Office quoted by both Murphy and Jones estimates that employment would be reduced by 1.4 million by the minimum wage increase while the number of people in poverty would decline by a nine hundred thousand. Yet the negative economic impact would not end with the labor market effects. According to the same study, a higher minimum wage would also “slightly reduce real GDP, primarily because of reduced employment,” redistribute family income, and increase the budget deficit by a cumulative $54 billion over 2021–31. Significant income redistribution would take place from wealthier families that suffer a decline in business income estimated at $333 billion over 2021֪–31 or face higher prices for goods and services to the families of workers that either benefit from higher wages or have lost employment because of the minimum wage hike.

It should not be overlooked that, in addition to the direct rise in institutional unemployment, second-round effects in terms of lower output and real national income and a new redistribution thereof to the benefit of households with a lower propensity to save are likely to impact negatively savings and investment. Although one cannot predict how US families will shape their savings and investment patterns in the future, statistics show that over the last three decades only the two top income quintiles recorded positive saving rates consistently. The average savings of the two bottom income quintiles have been stubbornly negative while the gap between the top and bottom income groups’ savings has actually widened

If past saving trends continue, the contemplated minimum wage hike is likely to depress further the relatively low savings propensity of US households. The latter save only about 8 percent of their disposable income, part of a long-term declining trend since the early 1970s (OECD data). Moreover, this lasting decline has gone hand in hand with a persistent slowdown in private investment, capital accumulation, and labor productivity. It is obvious that the US economy should be spared another government intervention in the form of a massive minimum wage hike which can only reinforce these trends and undercut the rise in standards of living. Moreover, if minimum wages actually depress savings and hamper capital accumulation how could businesses respond to a mandated increase in wages by substituting more machinery for labor, as claimed by certain pundits? With impaired investment and capital stock, this would only be possible in specific cases and not for the overall economy. As a matter of fact, the causality runs in the opposite direction: capital accumulation and technological improvement support higher wages whereas mandatory minimum wages undermine them.

Conclusion

The lasting negative impact of minimum wages not only on employment, but also on standards of living in general, can only be fully grasped by taking into account also their long-term effects on output, capital accumulation and labor productivity. Mises1 understood very well this phenomenon when he claimed that “No one has ever succeeded in the effort to demonstrate that unionism could improve the conditions and raise the standard of living of all those eager to earn wages.”

Like in the case of unionism, the alleged benefits of mandated minimum wages are restricted to a minority of workers who see their wages rise in the short term. For the rest of the society, which must finance this immediate income redistribution and also face lower prospects for higher standards of living in the future, minimum wages are of no benefit at all.

https://mises.org/wire/capital-and-labor-both-suffer-under-minimum-wage-mandates

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Also see my other blogs. Main ones below:

http://snorphty.blogspot.com (TONGUE-TIED)

http://edwatch.blogspot.com (EDUCATION WATCH)

http://antigreen.blogspot.com (GREENIE WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://australian-politics.blogspot.com/ (AUSTRALIAN POLITICS)

http://awesternheart.blogspot.com.au/ (THE PSYCHOLOGIST)

https://heofen.blogspot.com/ (MY OTHER BLOGS)

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