States That Took COVID Seriously Did Better Economically Than States That Didn’t

California outperformed states like Florida and Texas in terms of health outcomes too
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While Florida Governor Ron DeSantis and other GOP shooting stars have spread their names cross country by boasting about supposedly saving businesses through largely ignoring a pandemic that’s killed 600,000 Americans, a pair of new studies indicate that states which mandated masks, limited gatherings, and ordered store closures have done better economically than the ones that freewheeled it.

According to Yahoo News, an Oxford University report that rates government non-pharmaceutical interventions (NPIs) by stringency, along with UCLA’s latest quarterly Anderson Forecast, reveal that “lockdown” states ended 2020 with better economic numbers than states that chose a “looser” response to the crisis.

The studies found that the more people perceived the virus as being under control, the more readily they participated in the economy.

“On average, [gross domestic product] declined in 2020, and it declined everywhere,” Anderson Forecast director Jerry Nickelsburg tells Yahoo. “But those declines were smaller in states with more stringent non-pharmaceutical interventions than states with less stringent NPIs.”

Nickelsburg said that evidence supporting the idea that policies which are good for people’s health are also good for the economy dates back to the 1918 influenza pandemic, but that early in 2020 researchers lacked sufficient data to counter arguments from people like DeSantis that letting businesses do whatever struck their fancy was best.

But after analyzing states that produce the most GDP—those with populations of 5 million or more—the evidence is in.

“California had more stringent interventions and a lower infection rate than either Texas or Florida, two states to which it’s often compared,” Nickelsburg said. “Yet California also performed better with respect to GDP than either Texas or Florida. Second, the same pattern showed up across all big states: On average, the ones with more stringent interventions had both better health outcomes and better economic outcomes.”

Two states bucked this trend, however, with New York and Michigan enforcing strict NPIs yet still ending up with poor showings financially.

“Michigan was all about supply chain interruption in the automobile industry,” Nickelsburg told Yahoo. “This had nothing to do with interventions. Factories were forced to close for part of the year.”

New York’s situation, he admits, is harder to explain.

“We don’t know the answer,” Nickelsburg said. “It may be that because of ‘work from home,’ many New York employees were working from New Jersey or Connecticut or even Florida, and spending their money there.”

As for why California’s unemployment rate is 8.3 percent while Florida’s is 4.3, Nickelsburg explained that people who dropped out of the job market due to COVID-19 aren’t counted in unemployment numbers, adding that “there’s evidence that states that opened up earlier may have reduced their employees’ hours because fewer people were coming through the doors; the reduction in hours per employee was 4.2 percent in Texas versus 1.1 percent in California. So unemployment is actually quite complicated, and you can’t really rely on it.”


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