One Michigan economist says trade off between economy and public health “doesn’t exist”
National debate over whether to open the country back up sooner or later following coronavirus shutdowns has posited a trade off between the US economy and public health.
One Michigan economist said he doesn’t believe such a trade off exists.
Officials with Michigan’s hospitality industry have said the state could lose one-third of its hotel and restaurant jobs due to coronavirus.
Earlier this week, President Trump floated opening the country by Easter.
Gabriel Ehrlich is an Economic Forecaster at the University of Michigan. He said the shutdowns of most restaurants and businesses will have huge negative consequences for the economy. But, he said, those consequences will be paid sooner or later.
“Shutting down now and in some sense frontloading those costs allows us to address public health,” Ehrlich said. “If we just go about business as usual restaurants and businesses would still be need to shut down… eventually.”
Ehrlich said the reality is the country should not open up if the virus is still in full swing.
“I think a lot of the conversation has been framed as a trade off between public health and the economy. I don’t think that trade off exists. We need to get control of public health before the economy can start to function again.”
Ehrlich points to the auto industry which he said closed down before the Governor’s stay at home order.
He said that was in part because workers were afraid of coming to work.
And, he said, people will be less likely to go to restaurants if they are worried about contracting a potentially deadly virus.
That isn’t to say the impact to the economy won’t be huge. Ehrlich predicts Michigan could see double digit unemployment by the end of the year.
But, Ehrlich said, the U.S. economy was strong before the shutdown. He said if the congressional package can freeze the economy in place during the shutdown there is hope for restarting the economy in a strong position.
Ehrlich’s latest work involves two models - one looking at the impacts of a short and long term closure due to the coronavirus.