Paul Prentice, economist and Independence Institute senior fellow, sits down with Jon Caldara to discuss his study Unequal Opportunities, Unequal Outcomes: The COVID-19 Recession in Colorado. The study explores Colorado’s policy responses to the COVID-19 pandemic and the economic and social consequences of those policies for various populations across the state.
I don’t know that the purpose of the lockdown was to hurt poor people, but there’s no question that was the outcome. That’s the gist of our report — it’s unequal opportunities and unequal outcomes that have been created by this. It’s not because a market economy let some people get rich and some people not…this was policy driven.
Among other things, the study finds that:
- The number of small businesses in Colorado declined by over 40% from pre-pandemic levels by June 2021, while stock prices for the Fortune 500 companies headquartered in Colorado increased by 61.4%;
- Overdoses increased markedly in 2020 with the sharpest increases occurring among the state’s Hispanic and African American minorities;
- The percentage of Coloradans with a household income under $75,000 who were working dropped to less than 50% in the spring of 2020 while it remained steady for those over $75,000;
- Workers making less than $40,000 per year accounted for 38.6% of the layoffs at the height of the pandemic recession; and
- The state’s largest minority group, Hispanics, comprise the highest percentage of workers in the industry hit hardest by the pandemic, hospitality.
From the interview:
Comparing U.S. states, “We found no statistically significant correlation between the degree of economic lockdown and the health outcome as measured by deaths per population…That’s what we have: all costs and no measurable benefits.”
“We found…tremendous disparities by income class and minority status.”
“We looked at 50 of the largest companies that were based in Colorado…their shareholder value and their wealth went up 40% during the shutdown while…40,000 small businesses were closed.”
“I interviewed a tremendous minority couple who had put their life savings into a small business and then expanded it to two locations just before they got locked down, and they lost it all.”
“It was an economic crime…450,000 people lost their jobs, and it was not the high tech oligarchs, it was not the people running these big corporations, it was people with small jobs in small places.”
“It was not an organic increase in wealth; it was a transfer of wealth.”
“We lost at a minimum $20 billion dollars of economic activity…That’s the downpayment. We don’t know the final result of this.”