Of state economies hit hardest by COVID-19, Utah ranks 48th (out of 51)
SALT LAKE CITY (KUTV) — While Utah's economy was definitely negatively affected by COVID-19, the economies of 46 other states and Washington, D.C. were hit harder, according to a new study.
The economies of only three states -- Oregon, Arizona, and Washington -- faired better than Utah. Hit hardest, in order, are: Louisiana, Oklahoma, Hawaii, Ohio, and Nevada.
Researchers at WalletHub took a look at 13 different metrics to determine its rankings.
Those metrics include data sets such as "the share of employment from small businesses to the share of workers with access to paid sick leave and the increase in unemployment insurance claims," the study says.
The study's methodology is posted at the end of this story.
The study actually included three different sets of rankings:
- Gross domestic product (GDP) that was generated by industries that were "highly affected" by COVID
- Share of employment from industries that were "highly affected" by COVID
- State economies most exposed to the coronavirus (overall rankings)
STATE ECONOMIES MOST EXPOSED TO CORONAVIRUS
- Louisiana
- Oklahoma
- Hawaii
- Ohio
- Nevada
- Alaska
- West Virginia
- Virginia
- New Mexico
- Wyoming
- Kentucky
- Mississippi
- New York
- Rhode Island
- Illinois
- Indiana
- Montana
- Kansas
- Wisconsin
- Florida
- Maine
- Texas
- Michigan
- Georgia
- Delaware
- Massachusetts
- Pennsylvania
- Tennessee
- Alabama
- New Jersey
- New Hampshire
- Connecticut
- Arkansas
- South Carolina
- Missouri
- Iowa
- Vermont
- North Carolina
- California
- Colorado
- South Dakota
- Idaho
- Maryland
- Minnesota
- Nebraska
- North Dakota
- Washington, D.C.
- Utah
- Oregon
- Arizona
- Washington
With the virus forcing millions of people to work remotely, many companies plan to keep it that way, even after COVID restrictions are lifted.
Warren Distinguished Professor of Law Orly Lobel, with the University of San Diego, said:
The pandemic has changed our working patterns, and these patterns of remote working are likely to stay at least in part after the pandemic is over. Companies have seen that they can reduce costs, and increase the talent pool, by allowing employees to work from home and many companies have already announced that work will remain remote for the foreseeable future."
GDP GENERATED BY HIGHLY AFFECTED INDUSTRIES AS SHARE OF TOTAL STATE GDP RANKING
- Nevada
- Hawaii
- Florida
- Vermont
- Colorado
- Maine
- Montana
- Utah
- Tennessee
- New Hampshire
- Arizona
- Louisiana
- Pennsylvania
- Rhode Island
- Maryland
- Missouri
- New York
- New Mexico
- Illinois
- West Virginia
- Ohio
- California
- Massachusetts
- Connecticut
- South Carolina
- Mississippi
- Washington, D.C.
- New Jersey
- Wyoming
- Oklahoma
- Idaho
- Oregon
- Texas
- Virginia
- North Carolina
- Indiana
- Minnesota
- Arkansas
- Wisconsin
- Georgia
- Michigan
- Washington
- Alabama
- Kentucky
- North Dakota
- South Dakota
- Kansas
- Alaska
- Iowa
- Delaware
- Nebraska
While many workers will remain remote, there are numerous industries that rely on in-person customers and sales, such as restaurants.
The study's authors asked several experts several economy-related questions, such as: "What are the biggest challenges facing the hardest-hit industries after reopening?"
Thomas C. Kohler, concurrent professor of law and philosophy at Boston College Law School, answered:
I think retail and hospitality, especially restaurants, will fall among those struggling if they managed to survive the pandemic in the first place. For restaurants, once they can reopen, attracting skilled employees may prove difficult. Chefs, cooks, and supporting workers, from what I have heard, are difficult to find. Servers may also prove a challenge. Many of these people have been out of work for some time and may have found other, possibly more stable positions in the economy or hope to find them. I suspect funding to re-open restaurants also may prove difficult to obtain. While I am sure there will be pent-up demand to dine out and to socialize in restaurant and bar settings, I expect it to take some time before people will be sufficiently at ease to return to previously established patterns."
Local governments and entities may share the brunt of the load when it comes to aiding struggling businesses and the unemployed.
Experts were asked: "What are the best ways for local authorities to offer support to struggling businesses and the unemployed population?"
Professor of Law Emerita Ann C. Hodges, with the University of Richmond, said:
Local authorities can support local nonprofits that aid in providing food, shelter, eviction diversion, and other essentials to unemployed workers. They can help with financial support and ensure the continuation of things like meals for school children even when school is not in session. Even small grants can help businesses adjust to the pandemic in ways such as offering curbside pickup, expanding takeout options, or building an outdoor seating area. Using multiple methods of communication for government information is important for those who do not have access to computers."
Jack and Lovell Olender Professor of Law Marcy L. Karin, with the University of the District of Columbia, David A. Clarke School of Law, expounded further:
First, local authorities need to improve and speed up access to vaccines and must engage in grassroots efforts to educate communities about their importance. Further, for now, regular testing remains important for all individuals, regardless of whether o they have been vaccinated. This should minimize operational disruptions and encourage consumer spending.
"Second, there is no one size fits all solution to supporting local businesses and unemployed individuals. Local governments can be creative with temporary supports that fit the needs of their communities. Maybe that looks like forgiving a particular type of business license fee for a year. Other localities might create campaigns to highlight safe ways for consumers to shop, eat, travel, or meet to conduct business. Or they can authorize shared work unemployment compensation, which allows struggling businesses to prevent layoffs by reducing workers’ hours and allowing them to get partial unemployment insurance. Other local governments may be able to authorize additional funding of benefits, or to raise caps on benefits that otherwise have run out, but they must do so in ways that minimize employers’ costs.
"The reality is that unemployment (and underemployment) negatively impacts business AND health, housing, childcare, education, food security, caregiving, retirement planning, and so many other things—all of which have taken a hit during the pandemic. Data shows that these harms have disproportionally impacted and pushed people of color, disabled individuals, women, and other vulnerable communities out of the workforce. These lived realities need to be centered in local recovery and business reopening plans—and the best government responses to this “she-cession” and other harms will support both business and these broader communities."
SHARE OF EMPLOYMENT FROM HIGHLY AFFECTED INDUSTRIES RANKING
- Florida
- Colorado
- New York
- Utah
- Hawaii
- Connecticut
- New Jersey
- Nevada
- Illinois
- Texas
- New Mexico
- Louisiana
- Arizona
- Massachusetts
- Washington
- Pennsylvania
- Georgia
- Oklahoma
- Oregon
- Mississippi
- California
- Montana
- North Dakota
- Maryland
- Virginia
- Kansas
- Rhode Island
- North Carolina
- Alaska
- Minnesota
- Delaware
- Michigan
- Arkansas
- South Carolina
- West Virginia
- Ohio
- Wisconsin
- New Hampshire
- Tennessee
- Vermont
- Missouri
- Washington, D.C.
- Indiana
- Kentucky
- Wyoming
- Idaho
- Alabama
- Nebraska
- Iowa
- Maine
- South Dakota
So, how did WalletHub determine these rankings? They used 13 metrics across two key dimensions:
- Highly Affected Industries & Workforce
- Resources for Businesses to Cope Better with the Crisis
The study's authors said:
"We evaluated those dimensions using 13 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest value. We then determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample."
METHODOLOGY
Dimension #1 - Highly Affected Industries & Workforce – Total Points: 70
Metric #1 - GDP Generated by Highly Affected Industries as Share of Total State GDP: Double Weight (~10.00 Points)
Note: This composite metric includes:
- Accommodation and Food Services: Double Weight
- Arts, Entertainment, and Recreation: Double Weight
- Retail Trade: Full Weight
- Mining, Quarrying, and Oil and Gas Extraction: Full Weight
- Educational Services: Half Weight
- Real Estate, Rental and Leasing: Full Weight
- Other Services, Except Government and Government Enterprises: Full Weight
Metric #2 - Share of Employment from Highly Affected Industries: Double Weight (~10.00 Points)
Note: This composite metric includes:
- Accommodation and Food Services: Double Weight
- Arts, Entertainment and Recreation: Double Weight
- Advertising, Public Relations and Related Services: Full Weight
- Retail Trade: Full Weight
- Transportation: Double Weight
- Oil and Gas Extraction: Full Weight
- Educational Services: Half Weight
- Health Care and Social Assistance: Full Weight
- Real Estate, Rental and Leasing: Full Weight
- Employment Services: Full Weight
- Other Services, Except Public Administration: Full Weight
Metric #3 - WalletHub’s "States Whose Unemployment Claims Are Recovering the Quickest" Score: Triple Weight (~15.00 Points)
Note: This metric is based on WalletHub’s “States Whose Unemployment Claims Are Recovering the Quickest” ranking.
Metric #4 - Share of Employment from Small Businesses: Full Weight (~5.00 Points)
Metric #5 - Percent Change in All Consumer Spending: Full Weight (~5.00 Points)
Note: “Consumer Spending” refers to average consumer credit and debit card spending for the following subcategories: grocery, transportation, apparel & general merchandise, health care, entertainment & recreation, restaurants & hotels.
Metric #6 - Percent Change in Number of Small Businesses Open: Double Weight (~10.00 Points)
Metric # 7 - Change in GDP (2020 vs 2019): Triple Weight (~15.00 Points)
Dimension # 2 - Resources for Businesses to Cope Better with the Crisis – Total Points: 30
Metric # 8 - States Prepared for Digital Economy Ranking: Full Weight (~3.33 Points)
Note: The Digital States Survey, conducted by the Center for Digital Government, evaluates states’ use of technology to improve service delivery, increase capacity, streamline operations and reach policy goals. It assigns each state a grade based on quantifiable results.
Metric #9 - Share of Workers Working from Home: Double Weight (~6.67 Points)
Metric # 10 - Work from Home Infrastructure: Full Weight (~3.33 Points)
Note: This composite metric measures both the average internet speed and the access to communication infrastructure by state.
Metric #11 - Share of Workers with Access to Paid Sick Leave: Double Weight (~6.67 Points)
Note: Even with paid-time-off policies in place, workers may not be able, or may find it hard, to access medical care during the Coronavirus pandemic.
Metric # 12 - State Rainy Day Funds as Share of State Expenditures: Double Weight (~6.67 Points)
Metric #13 - State Fiscal Condition Index: Full Weight (~3.33 Points)
Note: This metric is based on the George Mason University Mercatus Center’s state fiscal rankings, particularly the State Fiscal Condition Index, which refers to the sum of cash, budget, long-run, service-level and trust-fund solvency indices for each state.
Sources: Data used to create this ranking were collected from the U.S. Census Bureau, U.S. Bureau of Economic Analysis, U.S. Small Business Administration, Raj Chetty, John N. Friedman, Nathaniel Hendren, Michael Stepner, and the Opportunity Insights Team, Government Technology, BroadbandNow, National Association of State Budget Officers Mercatus Center at George Mason University, Kaiser Family Foundation and WalletHub research.
You can view the full study here.
