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Blue State Governors Punish Working Class with Severe Lockdowns

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Coronavirus Infects Stock Market: Part LIX

Severe lockdowns in blue states are driving unemployment to Depression Era levels, and devastating the finances of working-class residents. Before their governors went wild with lockdowns, these same workers had been enjoying their best economy in decades. The Journal reports on the skyrocketing unemployment in blue states:

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The Labor Department on Friday reported jobless rates in May for the 50 states, and the news is the greater than usual variation. Some state economies are recovering much faster than others, and the worst performing tend to be those that have imposed the most severe lockdowns.

The national jobless rate was 13.3% in May, but 10 states still have unemployment rates above 15%. From highest down, they are: Nevada (25.3%), Hawaii (22.6%), Michigan (21.2%), California, Rhode Island and Massachusetts (16.3%), Delaware (15.8%), Illinois and New Jersey (15.2%), and Washington state (15.1%).

The Nevada and Hawaii economies rely heavily on tourism that has been walloped by the pandemic. But all of these 10 states have had some of the strictest lockdowns. The Michigan rate is especially striking compared to the lower rates in Wisconsin (12%) and Indiana (12.3%, down from 17.5% in a month). New York, the state hit hardest by the virus, had a jobless rate of 14.5% in May, down somewhat from 15.3% a month earlier.

Nine of the 10 states with the highest jobless rate are run by Democrats, who have tended to demand that the economy should stay locked down and in some cases are still resisting opening. One exception is Colorado, where Democratic Gov. Jared Polis was one of the first to reopen. His decision is paying off as Colorado’s jobless rate in May fell to 10.2% from 12.2% in April.

Other states well below the national rate include Georgia (9.7%), Arkansas (9.5%), Arizona (8.9%), Utah (8.5%), and Nebraska (the lowest rate in the country at 5.2%). These tend to be states that resisted total lockdowns or reopened sooner.

Some of this variation may be related to statistical noise from rapid labor shifts that are hard to track. Over time the rates should tend to converge closer to the national average.

But so far these numbers suggest a tale of two U.S. economies. States that are reopening faster are recovering faster and easing more economic suffering. The states that put a premium on trying to reduce the spread beyond the original purpose of protecting hospitals and the health-care system are lagging. It isn’t clear that those shutdowns reduced the rates of infection and fatalities from the coronavirus compared to other states even as they continue to do more economic harm.

If your governor is preventing you from working, it may be time to look for a better place in America.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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