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Illustration: Sarah Grillo/Axios

When schools close down, the whole economy suffers.

Why it matters: Beyond the stress of overwhelmed parents or the cabin fever of restless kids, closing schools for COVID-19 could cost about $700 billion in lost revenue and productivity, according to a Barron's analysis — a whopping 3.5% of GDP.

How it works: Schools exist to educate children — but they also serve a vitally important child care function, looking after kids so that their parents can go to work.

  • Parents are losing work hours — or even quitting their jobs — as schools and day-care centers remain closed due to the COVID-19 pandemic. That hinders economic growth.

By the numbers: Working parents make up around a third of the U.S. workforce.

  • 13% of them lost their jobs or cut back hours due to child care challenges during the pandemic, according to a June survey conducted by Northeastern University. And even if parents can work and care for their kids at the same time, it's impossible to be as productive.
  • On average, a working parent loses around eight hours a week — or a full workday — due to pandemic-era childcare responsibilities, per research by Alicia Modestino, an economist at Northeastern University.

That goes up to 10 hours per week when considering lower-income Americans or people of color. Both groups are disproportionately represented in essential, in-person jobs and can't make up for lost time with early mornings or late nights.

What they're saying: "This is a big drag on the economy," Modestino tells Axios. "Working parents are in every state, in every industry, and in every occupation. The macro implications are really, really big."

  • "Even if you’re lucky enough to have a teleworking situation, it’s really hard to work at full capacity when you’re essentially acting as a teaching assistant," adds Misty Heggeness, a visiting scholar at the Minneapolis Fed.

The bottom line: Schools are a key part of the engine driving the American economy. When they close, everybody suffers.

Go deeper

Nov 29, 2020 - Health

New York City to reopen public schools with weekly testing

New York Mayor Bill de Blasio in New York on Nov. 28. Photo: Kena Betancur/AFP via Getty Images

Some New York City schools will be allowed to reopen for in-person learning as early as Dec. 7, Mayor Bill de Blasio announced Sunday.

The state of play: De Blasio said schools will no longer be forced to shutter when the city hits a 3% COVID-19 test positivity rate, but he did not specify what the new threshold will be. The school district will mandate weekly tests for 20% of children in each school, and students will not be tested before they return.

Hope King, author of Closer
Updated 60 mins ago - Economy & Business

Peloton pumps its brakes

Data: FactSet; Chart: Axios Visuals

Peloton’s popularity is falling as swiftly as it shot up.

Why it matters: Not all pandemic habits stick around. Peloton's trajectory over the past two years exemplifies how challenging it's been for companies to gauge shifts in consumer demand — particularly in sectors heavily altered by the pandemic.

Mitch McConnell's remarks on Black voters raise ire

Senate Minority Leader Mitch McConnell during a Capitol Hill news conference earlier this year. Photo: Anna Moneymaker/Getty Images

Senate Minority Leader Mitch McConnell (R-Ky.) has been widely criticized for comments he made this week about Black American voters.

Driving the news: When asked by a reporter Wednesday about concerns among voters of color, McConnell said "the concern is misplaced, because if you look at the statistics, Black American voters are voting in just as high a percentage as Americans."