The governor is loosening her lockdown orders, though what is and isn’t allowed to open still seems confusing and inconsistent. Closing lots of businesses by government decree has a questionable effect on reducing the harms of COVID-19, but a clearer effect on unemployment.
The Bureau of Labor Statistics has surveyed businesses about their response to the pandemic and found that Michigan had some of the strictest lockdowns. One-third of Michigan’s workforce was subjected to a government-mandated closure. Only in Nevada were more people shut out of work by a government rule. Nationally, 21% of workers were forced out of work.
And it turns out that states have higher unemployment when governors force more businesses to close. The chart below shows the relationship between the proportion of businesses that were closed and a state’s unemployment rate in May. Each state is represented by a dot, and the dots form a pattern, showing a trend from the bottom left of the chart to the upper right. This means that states that had stricter lockdowns (farther to the right on the chart) also experienced higher unemployment (toward the top of the chart).
Those effects seem to linger into November, though the relationship is weaker.
A similar chart of lockdowns and reported COVID-19 related deaths indicates that the closure of businesses is not as closely associated with deaths as it is with increases in unemployment. There may be an association, but it is not as clear.
Governors have to make difficult decisions. More extreme lockdowns may have complicated effects to prevent the health harms of the pandemic, but they seem to have clearer effects on the economy.
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