With the resurgence in Covid-19 cases because of the contagious “delta” variant, some states may be mulling reintroducing restrictions. Instead of jumping to react, however, states should be sure to take into consideration the economic and public health data from the first lockdown.
By CHRIS DENSON
GEORGIA PUBLIC POLICY FOUNDATION
A recent, noteworthy report from the Beacon Center of Tennessee, a non-profit think tank, compares the economic and health impact of four states’ response to the Covid-19 pandemic: Tennessee, Kentucky, Michigan and Georgia.
These four “were chosen in order to compare states that tried a more balanced approach versus states that imposed tougher economic restrictions in the name of public safety,” the Beacon Center explains.
Georgia is among these four because, as the report notes, it is a “similarly-situated border state and is widely considered to be the first to ‘reopen.’”
Using traditional economic indicators from the period between January 2020 and April 2021, the data demonstrated “the lighter regulatory touch and quicker reopening plans of Tennessee and Georgia led to fewer job losses, lower unemployment rates, and in particular, higher labor force participation.”
According to the Beacon study, Tennessee and Georgia fared substantially better than Kentucky and Michigan, with no significant increase in cases from reopening their economy. Kentucky and Michigan experienced a drop in labor force participation roughly four times greater than Tennessee and Georgia.
The report praised Georgia Gov. Brian Kemp’s decision to be one of the first states to reopen:
Gov. Kemp shared a similar philosophy, defending Georgia’s first-in-the-nation reopening, saying he was doing what was best for “the lives and livelihoods of all Georgians.” Gov. Kemp also appealed to individual responsibility rather than more heavyhanded government restrictions, saying, “Georgians who are small business owners, those people who have good common sense — and we’re trusting them to use it, but if they abuse it, we will take further action. But I believe they can do it as part of this measured approach.”
Utilizing an economic index developed by the Federal Reserve Bank of Philadelphia to measure the overall health of each state’s economy during the peak period of shutdowns and restrictions, the report found that Georgia fared significantly better than the other states measured. Georgia’s economy contracted by only 8% during this time, in comparison to 19% for Tennessee, 25% for Kentucky, and a whopping 45% for Michigan.
As for the public health aspect of reopening, Foundation CEO and President Kyle Wingfield observed:
Surely the people of Kentucky and Michigan were physically safer, even if they weren’t as well off financially, right?
Not necessarily. To overcome data-reporting differences among states, the Beacon Center compared “active cases” of Covid-19 during the pandemic. “The virus was clearly cyclical,” it found, “with all states experiencing increases during the late fall and holiday season.”
Tennessee had one of the biggest spikes in the nation in late 2020, but Gov. Bill Lee reinstated only a temporary limit on public gatherings. Despite no new restrictions on businesses, the cases soon fell as sharply as they’d risen.
Meanwhile, both Kentucky and Michigan experienced larger case rates in the late fall and early winter than Georgia did, and Michigan was the only one of the four to experience a spike this spring — despite “continued restrictions such as limitations on restaurant capacity and a 20% capacity for outdoor events.”
And “while Tennessee and Georgia did experience larger waves in the summer of 2020,” the study argued, “this was not tied to their reopenings.”
By adopting a “surgical approach,” Tennessee and Georgia were able to navigate the balance between public health and punitive economic measures.
What was the biggest takeaway for the Beacon Center of Tennessee?
Should a similar choice be presented to policymakers in the future, such as a prolific wave of a Covid-19 variant or another public health crisis, policymakers should be aware of the huge macro- and micro-economic consequences of broad-based restrictions and should instead focus on targeted measures that allow businesses that can comply with health guidelines to remain open.
As the delta strain continues across the state and calls for aggressive shutdowns return, it would be wise to heed that counsel.
[Chris Denson is Director of Policy and Research for the Georgia Public Policy Foundation. Established in 1991, the Foundation is an independent resource for voters and elected officials. The Foundation provides actionable solutions to real-life problems by bringing people together. © Georgia Public Policy Foundation (August 20, 2021)]