With the release last week of the Labor Department’s U.S. state-level employment data for December, we have a great new handle on the relationship between the various lockdown and stay-at-home policies mandated throughout the country, and the still horrific toll on job losses during the CCP Virus era.
And as with recent statistics on state-level economic growth (and contraction) rates (see here and here), the numbers seem to point to the economic curbs themselves as the biggest influence on employment levels and changes, as opposed to other factors, like individuals’ virus-induced fear of using various types of in-person services (like travel) and the resulting knock-on effects throughout the entire economy.
One major indication of the mandates’ impact comes, as with the growth figures, from the outsized job losses experienced in New York and California, two states with some of the most severe lockdown regimes imposed over the past year.
In December, 2019, just before the virus began spreading to the United States, New York and California accounted for 18.37 percent of all the nation’s non-farm jobs (the Labor Department’s U.S. jobs universe.) But one year later, their employment losses came to 27.91 percent of the U.S. total.
Additional reasons for blaming the mandates for the employment damage come from comparing the performances the best and worst jobs performers, and the least and most restrictive states. As with the previous post on growth levels, the ranking of mandate strictness comes from the Wallethub.com website. (And sharp-eyed readers will note that the rankings have changed over the last few months, which makes perfect sense since the lockdown regimes’ extent has fluctuated, too.)
First let’s see the Wallethub ranks of the states with the best employment records between December, 2019 and December, 2020. (The lower the rank, the more “open” the state.)
Top 10 job performers (by % change) Wallethub.com rank
1. Idaho: +0.6 14
1. Utah: +0.6 6
2. Mississippi: -1.4 21
3. Alabama: -1.7 12
3. Georgia: -1.7 18
4. Nebraska: -2.3 17
5. South Carolina: -2.4 10
6. Arizona: -2.8 30
6. Arkansas: -2.8 4
6. Indiana: -2.8 20
7. Montana: -2.9 13
7. South Dakota: -2.9 2
8. Missouri: -3.1 7
9. Tennessee: -3.2 19
10. Texas: -3.3 28
Right off the bat you’ll see that because of ties, the Top 10 is really a Top 15 – which actually serves our purposes even better. And the big takeaway here is that with one exception (Arizona) and one near-exception (Texas), all of these states rank in the top half on the open/closed scale (26 and lower for the 50 states plus the District of Columbia).
And of these 15 states, four were among the ten most open, and twelve were among the twenty most open.
Does the reverse proposition hold? Have the most closed states generally compiled the worst employment records? Here’s what the numbers say:
Bottom 10 job performers (by % change) Wallethub.com rank
1. Hawaii: -13.8 43
2. Michigan: -10.9 29
3. New York: -10.4 39
4. Massachusetts: -9.1 49
5. Vermont: 9.0 45
6. New Hampshire: -8.8 23
7. Rhode Island: -8.7 36
8. Minnesota: -8.3 32
9. California: -8.0 51
9. New Jersey: -8.0 34
10. Delaware: -7.8 33
10. Pennsylvania: -7.8 35
10. Oregon: -7.8 37
Because of the “tie effect,” this Bottom 10 set is really a Bottom 13. Four of them fall in the category of ten most restrictive states (ranked between 51 and 41 on the Wallethub scale), and seven more are among the next ten most restrictive states. Moreover, only one state (New Hampshire) has been in the top half of most open states. So the relationship between lockdowns and employment performance looks strong from this perspective as well.
The issue can be examined the other way around, too – by examining the employment performance of the most open and least open states. Here are the results for the ten most open states. (As with the list of ten most closed states below, the Top Ten here really is a Top Ten.) They’re presented in descending order of openness.)
Ten least restrictive on lockdowns Job creation rank (out of 37)
South Dakota: 6
South Carolina: 4
Revealingly, fully half of these states were among the ten states with the best employment records, three more were in the next ten. Consequently, eight of the ten ranked in the top half on the openness scale. (Because of the “tie effect,” the top half here starts at number 19 – of 37 differing state rankings).
And although Oklahoma looks like something of an exception here (the most consistently open state being only the 15th best jobs performer), there’s a pretty simple explanation: Oklahoma’s economy is energy-heavy, and that sector has been absolutely slammed the deep recession experienced during the CCP Virus period.
Florida, which relies so heavily on tourism, has an “excuse” as well. (By the same token, though, it’s no coincidence that the worst employment performer, Hawaii, is tourism-dependent as well, along with fellow job laggards California and, to a lesser extent, New York.)
Finally, the table below shows how the most closed states fared in terms of job loss. These are presented in descending order of “closed-ness.”
Ten most restrictive on lockdowns Job creation rank (out of 37)
District of Columbia: 21
New Mexico: 26
North Carolina: 10
Fully four of these ten have been among the five worst employment states during the virus period (including tourism-reliant Hawaii and California). Three more (Illinois, New Mexico, and the District of Columbia) joined them in the bottom half. Of the two exceptions, Virginia’s solid employment record surely stems from its status not only as a state with a strongly growing information technology sector and an army of federal workers (many of whose jobs in turn owe to federal contracting).
One last point should be remembered as well: As extensively documented, the lockdowns and stay-at-home orders have generated their own serious healthcare damage . So the states with the relatively limited mandates surely have curbed both these CCP Virus costs as well as economic damage. Meaning that the already compelling case for anti-virus measures targeting the most vulnerable rather than indiscriminately putting the clamps on businesses and other forms of activity has just grown that much stronger.