Tennessee AG sues over COVID relief

A report from the Beacon Center of Tennessee says states that initiated strict lockdowns to mitigate COVID-19 last year saw steeper job losses than those who reopened more quickly and concludes that public officials should seek to mitigate future variants' spread in a more narrow fashion to minimize any economic fall-out.

The analysis from the free-market think-tank compared the economic impact of Tennessee’s pandemic response with three other states — Georgia, Kentucky and Michigan — that all had varying degrees of lockdowns and reopening plans. In Michigan and Kentucky, where lockdowns and capacity restrictions remained in place longer, the report says residents experienced nearly four times the number of job loss per capita than in Tennessee and Georgia, who both lost nearly 6,600 jobs per million residents between March 2020 and April 2021. 

Unemployment rates in each state fluctuated broadly, with Michigan reaching almost 25 percent in April 2020 compared to Georgia, which had the lowest among the four states at 12 percent during the same time frame. All four states have since recovered to a sub-5 percent unemployment rate, with Tennessee and Michigan taking the longest to get there. 

The states that imposed stricter lockdowns also are struggling to regain labor-force participation, which may be artificially lowering their unemployment rates, according to the report. Ron Shultis, Beacon’s director of policy and author of the report, says the massive wave of jobs losses early on in the pandemic could create an economic fallout similar to 2008. 

“We’re going to have to wait and see what some of those longer-term implications are — whether it’s lack of acquiring skills or experience, it could even be a delay in normal promotions that would have happened if they hadn’t had left those jobs for a period of time,” he said. “It’s sort of what we saw after the Great Recession with millennials, right? They have been consistently behind because they graduated during the Great Recession. I think we could see that with the economic fallout of the pandemic, but I think it still remains to be seen.”

The report concludes state and local officials should avoid lockdowns in favor of a more surgical approach to mitigating COVID-19 variants in the future, replacing the concept of “essential versus nonessential” with allowing businesses who can maintain public health and distancing guidelines to remain open. Shultis said he believes this is the best approach to balance public health and economic livelihood for individuals as the nation considers policy decisions surrounding emerging variants.

“What we saw in the pandemic is an interesting scenario where you have every state in the country going through the same crisis and challenges simultaneously. And so, from public policy perspective, it really provided an interesting opportunity to really compare and contrast what the impact of those policies are,” he said. “You may be able to have a lower unemployment rate and all that, but if you can’t also protect public health at the same time, then you have to decide: at what cost?”

Indeed, although Tennessee saw substantially lower temporary job losses than Michigan and Kentucky last year, the state recorded nearly 75 percent more active cases on average during the winter outbreaks. Among all four states, Tennessee has the second-lowest death rate per capita — reporting more than 12,900 deaths from COVID-19 in the past year — only behind Kentucky.