Despite Claims to the Contrary, Data Shows Shutdowns Weren’t the Major Force Behind Job Losses

menus at a restaurant closed due to COVID shutdowns

Menus are seen at the hostess station at a closed restaurant, Sunday, Jan. 10, 2021, in the Hell's Kitchen neighborhood of New York. The boarded-up windows and For Rent signs are all over the place in Manhattan’s Hell’s Kitchen neighborhood. Nearby, the Broadway theaters are all dark. (AP Photo/Mary Altaffer)

By Elle Meyers

January 26, 2021

New data shows people in the United States started staying at home before government officials ordered any shutdowns.

Despite claims that COVID shutdown measures are solely responsible for massive job losses, data shows that people began staying home and spending less before government officials issued official stay-at-home orders. 

The United States is suffering through another surge of COVID-19 infections as the country records more than 416,000 deaths. In mid-January, 900,000 people across the country filed for unemployment benefits. The Department of Labor reported that more than 5 million Americans are continuing to use state jobless benefits. So far, communities of color, the hospitality industry, and restaurants have been hit with massive job losses. Critics of COVID-19 shutdowns, designed to slow the spread of the virus, have blamed shutdowns for stifling economic recovery and creating more job losses. 

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However, data shows that shutdowns aren’t the root cause of pandemic-related job losses. “Most of the economic damage we’ve seen is produced by people’s reaction to the virus,” Coady Wing, researcher and associate professor at the O’Neill School of Public and Environmental Affairs at Indiana University, said. 

Economists at Indiana University reviewed more than 60 pandemic and social distancing studies to understand the impact of the stay-at-home orders and the economy. Wing said that while “social distancing policies mattered… they were layered on top of a major change in personal behavior.”

Studies of the widespread shutdowns last spring show that people began staying home well before actual shutdown orders were put in place. Researchers studied anonymized cell phone data to look at people’s movements in the weeks leading up to state shutdowns. According to cell phone data, in every state, people stopped commuting to work around the weekend of March 14 as the World Health Organization officially declared COVID-19 a pandemic. 

Additional studies came to similar conclusions; the rise of COVID-19 diminished people’s movement. Shutdowns slowed activity further but were not necessarily the driving force. A study from the University of Chicago Booth School of Business found that business fell by 53% whether an area was officially shut down. Areas that had official stay-at-home orders saw a further dip in movement by about 7%. 

 “If pandemic concern or fear leads both to people staying home and policymakers imposing lockdowns, then the fear is the true driving force,” Chad Syverson told the Washington Post. “Economic declines and lockdowns happen to be correlated because they’re pushed by the same thing, even though one isn’t necessarily causing the other.”

Syverson and Austan Goolsbee, the researchers who conducted the University of Chicago study, also found activity declined even further in areas with high rates of COVID-19 deaths, highlighting the way fear had an impact on keeping people at home. 

Additionally, business did not jump back up as soon as shutdowns were lifted, the studies found. Goolsbee explained that it is clear that shutdowns aren’t the primary cause of people staying away from businesses because if that were the case, activity would have rapidly increased after governors lifted shutdowns.

Studies also debunk the thinking that there was a significant difference in job losses between red and blue states. Data from researchers at Ohio State University shows that both rural and suburban areas of red and blue states saw recovery at about the same pace. 

The latest round of economic stimulus payments to individuals and the promise of additional financial help is expected to jumpstart the country’s recovery. Experts also expect the economy to rebound more quickly as more of the population is vaccinated and return to some form of normalcy. 

READ MORE: Data from December’s Job Losses Show Black and Latina Women Were Impacted the Most


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