WSJ: Job gains are much greater in states that have reopened faster.

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Job gains are much greater in states that have reopened faster.

WSJ

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.

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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.

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