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The Risk of Reopening

With the Coronavirus pandemic continuing to plague the U.S., many are beginning to wonder if the shelter in place orders have gone on long enough. Some American’s have even begun taking to the streets to protest the lockdown. Growing pressure to reopen has resulted in several states lifting shelter in place orders, and others wondering what effect the shelter in place had on stemming the virus, and the economy.

Researchers from San Diego State University’s Center For Health Economics And Policy Studies conducted research on how effective California’s shelter in place order was. California was one of the first states to issue a shelter in place order, the Executive Order was originally issued on March 19th, and the impact of such an order was unknown. 

The researchers found that the shelter in place order had positive impacts on health, but negatively affected unemployment during the short-run study. Findings indicate that the order “led to as many as 1,661 fewer COVID-19 deaths.” The potential lives saved came at an abrupt cost, as an estimated “400 jobs were lost per COVID-19 death averted.” These findings were supported by an increase in unemployment insurance claims by 2.83 million in the first four weeks of the shelter in place order. At the time of writing, California’s unemployment rate has risen from 3.9% in February to 5.3% by the end of March. It is just this economic cost which is driving the campaign to reopen states.

While the long term effects of the shutdown remain to be seen, the risk of a second wave of the virus remains very real. Georgia was one of the first states to reopen, with Governor Kemp announcing a plan to begin reopening some businesses starting April 24th. In the time since reopening, Georgia has seen an increase of nearly 4,000 additional cases, and nearly 43,000 additional tests since last week. Cases increased by roughly 18% over the last week as compared to the national average increase of 21%. Currently, Georgia has the 12th highest number of infections in the U.S. and when compared against the average increase of those 11 states above Georgia, Georgia’s increase was above the average, 18% as compared to 14%. While demographic and policy differences might account for some of this difference, a cautionary approach might be best suited to preventing a second wave of the virus. 

“Second wave of the Spanish Flu saw the majority of the U.S. deaths occur”

Spanish Flu Pandemic

The results of states beginning to reopen remains to be seen, but there might be some historical precedence for being wary of states reopening. The 1918 Spanish Flu Pandemic saw a distinct three waves, with the second wave proving the most deadly. A tale of limited health resources, the rapid onset of a second wave of the Spanish Flu saw the majority of the U.S. deaths occur. While medical practices have evolved since the time period, and there is no World War to pull away medical staff, the threat of a second wave of COVID-19 remains.

Dr. Fauci, advisor to President Trump, warns of an “inevitable” second wave of the virus, and that without appropriate countermeasures “we could be in for a bad fall and a bad winter.” Already a second wave has been seen in Japan, as the March 19th easing of lockdown restrictions was met with a second wave of the virus. 

Ultimately, the outcome of states lifting restrictions is undecided, but historical examples predict a grim future if caution is not appropriately exercised. Undoubtedly, however, shelter-in place orders have had a negative impact on the economy, and the growing pressure could drive policy makers to lift restrictions. The divisive question then remains, is the U.S. economy worth the potential cost of additional American lives?

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Thomas Moore
Thomas is a graduate, with a bachelors in economics and a minor in statistics. He's focused on writing about economics, current policies, and trends in the U.S. with an analytical approach. He hopes to pursue a PHD in labor economics in the future.

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