(CN) — One month after President Donald Trump declared the spread of coronavirus in the U.S. a national emergency, policymakers are weighing how soon social-distancing restrictions should be relaxed to stimulate economic activity.
Many economists, however, continue to prescribe a slow return to work guided by public health experts.
“There’s no tension between good social distancing measures and long-run economic outcomes,” said Heidi Shierholz, senior economist at the Economic Policy Institute in Washington D.C. “As an economist, I will step back and say follow public health experts for guidance on when to reopen the economy.”
Even as Goldman Sachs calculates unemployment in the U.S. could reach 15% in the third quarter and average 7.1% in 2021, the investment firm is also looking for the light at the end of the tunnel.
"If policymakers fill in the remaining holes on macro policy and manage to thread the needle between continued virus control and a gradual reopening of the economy, the level of GDP should begin to move higher in May/June,” said Jan Hatzius, chief economist of Goldman Sachs, in a statement.
One recent outbreak at a Colorado meatpacking plant exemplifies the difficulties of this balancing act. Two workers at the JBS plant in Greeley have died from Covid-19, while 50 others have tested positive and the plant’s other 6,000 workers are now under quarantine.
“Talk is cheap — workers’ lives are not," wrote Kim Cordova, United Food and Commercial Workers Local 7 Union President, in a letter asking the plant to provide hazard pay and personal protection equipment. "We fully understand the seriousness of a plant closure and its economic impact. However, safety must take precedence over profits."
Since closing, JBS pledged to spend $1 million to test all employees and deep-clean the facility, which it hopes to reopen April 24.
“Colorado’s beef industry is a critical part of our state’s economy, which is why we continue working closely with the Weld County Public Health Department to ensure the safety of the JBS workers and get the plant open as soon as is safe in order to protect the food supply,” said Colorado Governor Jared Polis at a news conference.
Many people nevertheless wonder how much the market shutdowns cost and how long they can last.
One back-of-the-envelope estimate published by Duke Law's Global Financial Markets Center compares income, education and international commerce across U.S. counties. The center roughly calculates gross domestic product drops an average of 5% each month the restrictions remain in place.
“We show how as long as the shutdown is not too long, we should be able to weather the storm,” said study co-author Christos Makridis, a research assistant professor at the W. P. Carey School of Business at Arizona State University. “I am eager and confident that we are in the process of a turnaround.”
He added: “It's important to not discount the significant economic losses, especially in areas that are not quite as much at risk of contagion.”
Over the past three weeks, 16.8 million Americans filed new claims for benefits — about 5% of the total population. Additional analysis from Janet Yellen, the former chair of the Federal Reserve, predicts the U.S. economy will shrink at a 30% annual rate over the second quarter.
Benjamin R. Page, a senior fellow at the Urban-Brookings Tax Policy Center, believe the economy would have taken a hit even if government did nothing.
“Some people blame the official restrictions, the shutting down of our economic activities and gathering places for the economic difficulties, but those things would have happened anyway,” Page said. “With many more people getting sick and dying, people would stop going to the restaurant all by themselves.