Nations across the world are still reeling from the COVID-19 pandemic, which triggered a worldwide recession following economic lockdowns enforced by most developed nations around the world.
New estimates put the economic losses at a lot more than $16 trillion, and the United States saw its GDP shrink 9.5 percent between April and June, its largest stop by modern times.
Economic Losses Lead to Severe Pain
While macroeconomic information is useful, it doesn't tell the entire story. It's important to understand these economic losses have led to severe pain for people around the world, especially the poor.
A new Columbia University study implies that 8 million Americans have slipped into poverty since May, the New York Times reports. Meanwhile, a current World Bank study projects as much as 150 million people around the world are projected to slip into extreme poverty by 2021.
As the U.S. seeks to rebound from the global recession, it's worth noting that some states are having more success than others.
Economic Pain is Not Distributed Equally
Just the News recently published a breakdown of state unemployment data for August . According to U.S. Bureau of Labor Statistics data, the figures showed that nationally the unemployment rate was 8.4 %, but the economic pain was not distributed equally across blue, red and purple states.
\”Fueled by broader, faster economic reopenings following a initial coronavirus crash, conservative-leaning red states are by and large far outpacing liberal-leaning blue states when it comes to putting people back to work,\” writes Carrie Sheffield.
In red states , the combined unemployment rate stood at 6.6%. Among blue states the figure was 10.5%. Among purple states , the unemployment figure was 7.8%.
The data also reveal that of the 10 states using the lowest rates of unemployment, nine have GOP governors , while 9 from the 10 states with the highest rates of unemployment are led by Democrats .
Different Approaches Lead to a Disparity in Outcomes
Evidence suggests the disparity stems in large part from the different ways states are approaching the coronavirus. Red states, particularly ones like South dakota, Utah, Oklahoma and Idaho, happen to be much less inclined to restrict economic freedom throughout the pandemic. Blue states, however, have been the most proactive in limiting business activities in an attempt to limit the spread of the virus. This includes states for example California, New Jersey, Rhode Island, Ny and Connecticut.
One might argue that these states could have had high unemployment rates before the pandemic, but BLS data from captured show this is not the case.
Government figures from January 2021 reveal that just two states had unemployment rates greater than 5 percent – Alaska and Mississippi . Meanwhile, nowhere states of California , Nj , Rhode Island , New York and Connecticut had rates of unemployment close to the national average.
The Cost of Curtailing Economic Freedom is High
The data claim that the economic recovery of many U.S. states is being inhibited by government regulations made to limit the spread of the virus. A recent Wall Street Journal article also recently noticed that the strong economic recovery within the South \”is at least partially because of less fear of the virus.\”
While it's unclear if these regulations are experiencing a positive effect – New Jersey and New York have the highest COVID-19 death tolls in the united states, and Rhode Island and Connecticut are not far behind – the consequences of government imposed lockdowns have been abundantly clear for months.
“The newest unemployment data are one a part of a larger economic picture that shows, to date, red states are doing a better job of balancing the need to save both lives and livelihoods,\” said Rachel Greszler, an economist for the Heritage Foundation.
\”[W]e've seen blue states utilizing a pandemic as an opportunity to expand government control, impose excessive lockdowns not rooted in data, favor politically connected groups and allies and demand federal bailouts for many years of poor budgeting rather than taking responsibility and confronting their problems head-on,\” Greszler told the Washington Examiner.
As lawmakers in the usa and around the world continue the difficult work of attempting to limit the spread from the virus without causing further destruction, we should remember that the cost of curtailing economic freedom is high.
Just ask the 8 million newly impoverished Americans.
Jonathan Miltimore may be the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune.