Staggering unemployment numbers, public opinion should inform lawmakers’ decisions

Written by Derek Monson

April 10, 2020

As lawmakers prepare to convene a special session compelled by the novel coronavirus pandemic, it is worth asking: How big is the economic blow from public health measures in response to COVID-19? In a word, historic. The implications for governance and policymaking are of similar importance for Utahns’ public health and economic well-being.

For the last three weeks, we have been bombarded with bad economic news about record-breaking levels of job losses nationwide and in Utah. Some speculate we may be heading toward depression-level rates of unemployment. But another way to understand the depth of the economic damage is to recognize the historic speed with which it has hit.

The economic damage to the labor market in the last three weeks appears to be reaching depths that were only seen after several years of the Great Recession. Consider the average number of Utahns identifying as unemployed (the “unemployment level”) for example, as reported by the Federal Reserve Bank of St. Louis. From its low point pre-Great Recession (Q3 2007) to its high point post-Great Recession (Q2 2010) there were an additional 81,300 Utahns who became unemployed. By comparison, in the last three weeks alone 81,298 Utahns have filed new claims for unemployment insurance.

Of course, it must be stated that the unemployment level and unemployment insurance claims are not measuring the exact same things, so these numbers should not be equated to each other. But it is breathtaking that we can even talk about the last three weeks of damage to the labor market in a similar vein as the damage caused by the entire multi-year Great Recession.

It becomes even more mind-boggling when you consider that national picture.

The unemployment level for the US increased 124 percent from its low before the Great Recession to its high afterward (a three-year period). By comparison, the estimated 16.78 million Americans who filed new unemployment insurance claims in the last three weeks is 290 percent greater than the unemployment level in February 2020. The jump in the national unemployment rate in March (3.5 percent to 4.4 percent) is the highest single-month rate increase since January 1975. 

What does all of this data mean?

In Utah, at least as measured by recent Utah Policy public opinion polling, Utahns are more worried about the economic impacts of COVID-19 than they are the public health impacts by a margin of 60 percent to 40 percent. The unemployment numbers help explain why. We have not seen such a dramatic and swift pounding of the job market in America and Utah perhaps since the Great Depression.

Utahns’ emphasis on economic concerns could play out in various ways. Public opinion could simply shift over time, as it is a malleable thing and people can be persuaded to change their minds. But if it does not, then two scenarios seem possible.

First, Utahns may, at the behest of elected leaders and public health experts, simply swallow those concerns. Millions in state-taxpayer funded aid has been offered to businesses. Billions more in federal aid to families and businesses is on the way from the recently-enacted federal CARES Act. With all of this assistance (and likely more in the future) Utahns may be able to reasonably abide stay-at-home orders and social distancing guidelines for as long as required for the sake of public health. 

Second, as the weeks drag on, Utahns’ economic concerns may outweigh their public health concerns. State and federal aid may prove inadequate, and large numbers of Utahns could start choosing to not comply with ongoing public health orders and guidelines for economic reasons. This would seriously undermine county stay-at-home orders, the state Stay Safe, Stay Home directive and the Utah Leads Together plan, because their effectiveness comes from voluntary compliance by the overwhelming majority of Utahns, not from the enforcement power of state and local governments.

In the short-to-medium term, the economic and public health future of the state will hinge on two things: 1) policymakers’ civic understanding of effective crisis governance in a representative government, and 2) policymakers’ ability to correctly perceive the breadth and depth of Utahns’ economic concerns. If they can ground their policy decisions in the principle of the consent of the governed and accurately gauge public support for those decisions, then Utah will likely ride out the pandemic with as little additional economic and public health damage as possible.

Minimizing the damage as we balance public health and economic concern during a crisis should be the policy goal for legislators, the governor, and local elected officials. With leadership, determination and political acumen, it is a goal that Utah can achieve.

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