May 11, 2020

Austin: Shutdown caused unintended economic consequences

Posted May 11, 2020 3:31 PM
Michael Austin
Michael Austin

By NICK GOSNELL

Hutch Post

HUTCHINSON — An economist with the Sandlian Center for Entrepreneurial Government with the Kansas Policy Institute believes that the choice of locking down the state to stop the spread of COVID-19 has created more economic problems than the health problems it has solved.

"Using a lockdown to combat COVID-19 is very much like using a sledgehammer to crack a nut," said Michael Austin. "Not only is it overkill, but it's such a blunt instrument you're guaranteed to have unintended consequences. In Kansas, lockdown policy has turned a potential public health crisis, I think, into a severe economic recession."

Homebase is a scheduling and time-tracking tool used by 100,000 businesses and their hourly employees. Some statistics from earlier in the month illustrate how much of a slowdown was caused by COVID-19 restrictions.

"As of May 4, which is day one of the phasing out lockdown plan, about 31% of all Kansas businesses are closed. Roughly 29% of hourly employees are off the job. Productivity-wise, hours worked is down about 35%."

Austin says Homebase updates its data daily, so we'll be able to tell how quickly businesses bounce back as the reopening happens.

"I think that the slow approach undertaken by state and local governments here, unfortunately, will make the economic recovery take far longer than it needs to," Austin said. "When you make public health the sole goal of government, I know it most certainly can seem laudable, but there are also consequences we just can't ignore. Social gathering restrictions, the continued closure of some businesses and the early inability to get those unemployment payments out, means a higher chance some families go into poverty."

The balance between legitimate economic damage concerns and the public health threat will continue to be a source of tension for as long as COVID-19 continues to shape policy.