Kerby Anderson

Cities and states are considering what they should do in light of increasing COVID cases. Before they set policies, they may want to read about the “Tale of Two Recoveries.” That was the title of a Wall Street Journal editorial. America has a two-track recovery. Unemployment was lowest in Nebraska, Utah, South Dakota, New Hampshire, Idaho, Vermont, Alabama, Montana, and Oklahoma. All are governed by Republicans, except Vermont, which has a Republican governor and Democratic legislature. By contrast, the states with the highest unemployment are run by Democrats: Connecticut, New Mexico, Nevada, California, Hawaii, New York, New Jersey, and Illinois. The editors don’t think that is a coincidence. Hawaii and Nevada rely on tourism, but that doesn’t explain the other states. The likely explanation is that Democratic governors maintained longer and stricter lockdowns. The situation in California provides an example. Although 12 percent of the US population lives in the nation’s richest state, it only accounted for 9 percent of employment growth. By contrast, states like Florida and Arizona lifted their business restrictions much earlier and added jobs at two to three times the rate of California. Add to this the harsh reality that California’s labor force declined by a half-million (540,000) workers since February of last year. Similar declines occurred in some of the other states already mentioned. High-tax Democratic states continue to lose population to lower-tax states. That certainly contributed to their shrinking workforces. There is one other problem. The prolonged lockdowns in these states also resulted in more small businesses shutting their doors. Small business owners and restaurants just could not survive the economic impact of the lockdowns. This is the sad tale of two very different recoveries.