Liberty or Lockdown? How States with Shorter Stay-at-Home Orders Fared Compared to the Rest

Brian Carpenter | May 2021

A full Globe Life Park in Arlington, home of the Texas Rangers, a professional baseball team

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ver the past year, the United States has seen an unprecedented public health crisis, which in turn led to an economic crisis. How to handle these intertwined crises has, like seemingly all issues in modern day America, been staunchly divided along partisan lines. Democrats have clamored for longer lockdowns, mask mandates, and heeded public health expert Dr. Anthony Fauci’s advice. Meanwhile, many conservatives have viewed such restrictions as infringement upon their liberties and advocated for quicker returns to pre-pandemic life. 

 

Much speculation has occurred on both sides of the partisan aisle with regard to the efficacy of lockdowns and masking orders. Yet a verdict as to whether more “open” states fared better or worse than “closed” states remains to be reached. Nonetheless, economic and public health data from 2020 can be used to reach preliminary conclusions. 

 

Michigan and Texas: A Tale of Two States

 

Perhaps no two states highlight the partisan divide better than Michigan and Texas. In Michigan, Democratic Governor Gretchen Whitmer’s long lockdown in late spring of 2020 produced such contempt that it led to a plot to kidnap her. In Texas, Republican Governor Greg Abbott has taken a vastly different approach and in early April allowed the state to host the first maximum capacity sporting event in the U.S. since the lockdowns began. 

 

At this point, it is apparent that lockdowns have aided our ability to fight the virus, with one Reuters study estimating they have saved millions of lives. Yes, there are examples of states with shorter lockdowns having less deaths per capita than states with longer ones, but differing climates and population densities make state by state comparisons of the pandemic’s toll difficult to grasp. 

 

An oft-cited downside of these longer lockdown measures is the toll they can take on the economy at both the state and national level, which will be the focus of this article. 

 

The Economic Effects of More Lenient Pandemic Orders

 

The degree to which these lockdown measures have impacted the economy is difficult to quantify. A recent study published by FiveThirtyEight surprisingly reveals that many economic experts think the current state of the economy would be stronger if the initial lockdowns had been harsher, as stricter orders would have led to better early control of the virus and a faster return to normal. 

 

With this in mind, we can compare how states with longer lockdowns have fared relative to states with looser lockdown measures. In total, eight states never issued stay-at-home orders: Arkansas, Iowa, Nebraska, North Dakota, Oklahoma, South Dakota, Utah, and Wyoming. Republican governors preside over all eight of these states. Despite never issuing a stay-at-home order, all of these states nevertheless suffered economic downturns. Specifically, even these eight states saw, on average, a 29% decrease in GDP during the second quarter of last year, when the stay-at-home orders began being issued nationwide. This decrease in GDP was slightly better than the national average decline of 32%. Despite never issuing a stay-at-home order, these states did put into place other coronavirus regulations, such as restrictions on service industries and their capacities, which account for the large declines in output. 

 

States that saw more publicity and scrutiny regarding their coronavirus lockdown policies for differing reasons, including Texas, Georgia, Illinois, and Michigan, displayed that the negative economic impacts of the coronavirus could not be escaped through different lockdown lengths. Specifically, Texas and Georgia, states which had stay at home orders lasting 28 and 27 days, respectively, saw marginally more palatable decreases in GDP than Michigan and Illinois experienced, whose stay at home orders were nearly three times the lengths in Texas and Georgia, lasting 70 and 73 days. Texas and Georgia saw their GDPs decrease by 29% and 28% during the second quarter of 2020, compared to 30% and 38% declines in Illinois and Michigan. Yet this temporary economic advantage was largely lost due to larger third-quarter growth rates in the pair of Midwestern states. This third-quarter rebound can in large part be attributed to momentum generated by the reopening of industries that were already open in Texas and Georgia. 

 

While their economic output measures did not fare much better, it does appear that the states with shorter stay-at-home orders possessed an advantage in unemployment rate compared to those with lengthier stay at home orders. Michigan saw its unemployment rate reach nearly 24% in April of 2020 during its stay at home order, compared to roughly 4% in 2019. The Illinois unemployment rate was 12 percentage points higher in April 2020 than in April 2019. On the other hand, Texas and Georgia each saw smaller increases in their unemployment rates, which were each 9 percentage points higher in April 2020 than in April 2019. 

 

The eight aforementioned no-shutdown states also fared better compared to the national unemployment rate, featuring an average unemployment rate of 9.4% last April compared to a 14.8% national unemployment rate at the same time. The data appears to show that avoiding a stay-at-home order, or shortening it, appeared to have short-term benefits for employment. However, as previously mentioned, the FiveThirtyEight study shows that if lockdowns had been widely implemented and better enforced, perhaps the country would be closer to resembling economic normalcy due to better virus control.

 

In Conclusion

 

If a universal stay-at-home order had been implemented, it is impossible to predict the degree to which the American economy could have contracted or grown due to the unprecedented nature of the pandemic. Both GDP and unemployment data show that the shorter lockdowns had short-term economic benefits, but the size of these were negligible by the end of the third quarter of 2020, especially when one considers that the federal unemployment benefits last year were extremely generous and reduced some of the usual financial strain from unemployment. 

 

In the divisive fervor of partisanship last spring, the nation failed to come up with a universal plan on how to handle not only the public health pressures from the virus, but also the economic impact. With some states locking down, states without lockdowns were bound to feel some negative economic impacts due to the interconnectedness of our economy. The states that completely shut down were also unable to fully reap the benefits of the lockdown as the virus raged in areas that elected not to lock down. 

 

As is typical of any issue involving governmental influence on the everyday lives of Americans, the pandemic quickly became partisan. The partisan divide in turn determined the degree to which states would “close” their respective economies, evidently affecting the economic, social, and psychological well-being of their residents in disparate ways. Had the two parties attempted to build a bridge crossing the partisan rift, specifically in negotiating a more uniform national lockdown or a more effective federal protective equipment distribution program, the resulting economic disparities across states just might have been resolved. And at a time when our inefficient, partisan federal government appears to be more of a problem than a solution, we could all use a little more resolving. 

Brian Carpenter is a junior at the University of Michigan majoring in Philosophy, Politics, and Economics. His writing interests include international trade, monetary policy, and domestic politics. Outside of MC, Brian enjoys skiing, watching basketball, and playing Euchre with his friends.