The Two-Track Jobs Recovery – WSJ

Pedestrians walking on 8. January went before the New York State Department of Labor.


Michael Nagle/Zuma Press

Remember the political panic after the Department of Labor announced that 140,000 jobs were lost in December? Today, the government’s employment report, released Tuesday, shows that these losses are largely due to business closures and that employment in less restrictive states is recovering quickly.

Despite the increase in the virus, employment rose last month in 15 states, including Texas (64,200), Georgia (44,700), North Carolina (33,600), Wisconsin (15,100) and South Carolina (14,600). However, these gains were more than offset by losses in Michigan (-64,400), California (-52,200), Minnesota (-49,800), Pennsylvania (-37,600) and New York (-37,200).

Democratic governors in recent states have closed indoor (and outdoor) restaurants in California, so it’s not surprising that almost all of the job losses are related to the hospitality industry. Nevertheless, most states have created jobs in various sectors, especially trade and transportation, and some, including Georgia and Texas, have even created thousands of jobs in the entertainment and hospitality industries.

This shows that the economy and employment in most states were recovering before Congress approved its $900 billion bailout package.

Joe Biden

became president. The states that have fought the most imposed excessive business closures have done no better at controlling the virus than states that have allowed companies to operate with social distance.

The table below shows the ten states with the largest employment declines between December 2019 and December 2020: Hawaii (-13.8%) suffered unique tourism losses, but how can Michigan (-10.9%), New York (-10.4%), Massachusetts (-9.1%) and others be explained except by their location? Most jobs were lost in the leisure and hospitality, health care, education and manufacturing sectors.

On the other hand, look at the 10 states with the lowest job losses relative to total employment: Most are located in the South, West and Midwest and have kept their economies largely open. Georgia (-1.7%), with its diversified economy, stands out in particular. Utah and Idaho have even found jobs.

In Florida, despite its heavy reliance on tourism and services, employment fell by only 4.6%, while in Texas it fell by only 3.3%. The national press laughed at these two states for not following California and New York in closing their economies.

The introduction of the vaccine should speed up the recovery, but in states like California, New York and Michigan that have crippled the economy for so long, the return to employment could be much slower. Several Democratic governors, including the governor of California…

Gavin Newsome.

and the New Yorker

Andrew Cuomo,

eased virus restrictions this week, but too little, too late for many restaurants.

Liberals say there is now a K-shaped recovery with rich and poor people struggling. The main issue is the economic disparity between states run by progressives and pragmatic conservatives, with the latter doing much better for the average worker.

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Appears in the print edition on January 28, 2021.

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