California Needs to Reassess Stay-at-Home Orders to Prevent an Economic Tragedy

Before the public health and economic disasters wreaked by the COVID-19 pandemic ruins more lives, California policymakers need to carefully assess the costs of a long-term lockdown and make common sense adjustments.

About one-sixth of California workers have filed for unemployment insurance since Gov. Gavin Newsom issued a statewide shelter-at-home order to prevent the spread of the coronavirus.

While every coronavirus-related death is a tragedy, there is also an economic tragedy brewing in California that will impact lives and health. The 3.1 million unemployment applications filed by Californians since mid-March are the tip of an iceberg of economic misery that will likely afflict our state.

While being able to work from home has insulated some workers, including many government employees and technologists from the economic crisis, the impact is being borne by service workers who generally have lower incomes and less savings. Federal stimulus payments and unemployment supplements will likely do relatively little to help these individuals in high-cost California.

No policy change can bring all the lost jobs back. Contrary to President Donald Trump’s claims, it’s highly unlikely there will be an immediate economic bounce-back or “V-shaped recovery.”

Until a COVID-19 vaccine is found and fully deployed, many people will understandably remain hesitant to travel, shop, attend entertainment events or dine out. A lot of businesses that provide services in these categories will fail, and no amount of newly minted cash from the federal government would fully offset the effects.

Local governments are watching receipts from sales taxes, transient occupancy taxes and other revenue sources crater. Further economic distress could impact property tax revenues by increasing delinquencies and lowering valuations. The revenue declines should be expected to force local spending and service cuts, layoffs and possibly even municipal bankruptcies.

As Newsom works with other governors on a plan to re-open, they can protect public health and limit the economic damage by adjusting their policies and their messaging by taking a closer look at available data. Instead of a one-size-fits-all lockdown, varying policies should be applied to different groups.

The data show that COVID-19 is having far more severe health impacts on older people. Four California counties — Santa Clara, San Mateo, San Diego and Orange — have been publishing granular age profiles of coronavirus deaths. Of the 167 fatalities reported by these four counties through April 15, only 10 involved individuals under the age of 50. This data is consistent with national data from the Centers for Disease Control and Prevention, which show only 9% of coronavirus deaths are suffered by individuals under 55.

Officials should consider partially, or fully, exempting individuals below the age of 50 from the shelter at home policy. People under 50 who live with older relatives or with others who have underlying conditions that put them at a higher risk, such as respiratory illnesses and heart disease, could remain at home.

So-called “non-essential” businesses should be allowed to reopen with appropriate social distancing guidelines so they can employ and serve those who have been released from the lockdown. When widespread coronavirus testing becomes available, exemptions from the quarantine could be extended.

While attention has focused on a handful of severe coronavirus cases among the less vulnerable group, it would be more informative and encouraging to speak in terms of probabilities.

Based on available data, the risk of coronavirus-related hospitalization for people under 50 who don’t have any pre-existing high-risk conditions appears minuscule. That probability should be officially calculated and published so that, if confirmed, the people in the less vulnerable categories get full information and reassurance.

As the shutdowns continue, California is risking a level of unemployment, homelessness and despair not seen since the Great Depression.  This will have its own extremely negative impacts on public health.

While government has a responsibility to protect public safety, California needs to reduce restrictions that have brought daily life to a halt. Scarce public resources should be focused on vulnerable populations, while others safely resume their lives and livelihoods.

This commentary was also published at CalMatters.