INTRODUCTION

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By mid-March 2020, it was apparent that a major pandemic was in process. Estimates were that millions upon millions of Americans would die from COVID-19 and that there would be insufficient hospital resources to treat all the expected chronic cases. As a result, almost all states instituted shelter-in-place emergency orders. Given the available information, the idea was that we should lock down for two weeks to “flatten the curve”—that is, to spread out the timing of infections so as to preserve hospital capacity. 

Colorado joined in the effort, shuttering all businesses but those deemed essential by the governor. While this might have been a reasonable response at the time based on humanitarian concerns to preserve life, Colorado repeatedly extended its emergency orders in spite of mounting evidence of severe unintended consequences. This study examines those consequences for the economy, for mental health, and for education. We find that the most severe negative consequences were borne disproportionately by Colorado’s low-income earners and minorities. 

KEY FINDINGS

• Government lockdown policy in Colorado exacerbated the economic impact of COVID-19, compared with less-restrictive states. 
• Leisure and hospitality—the lowest paying industry by category in Colorado—has been hit harder than any other segment of the Colorado economy. Hispanics—the largest minority group in Colorado—comprise the highest percentage of workers in this industry compared with other industries surveyed.
•  The number of small businesses in Colorado declined by over 40% from pre-pandemic levels by June 2021. Both nationally and in Colorado, large businesses enjoyed rapid increases in earnings and share price as small businesses were shuttered.
• In Colorado, the percentage of lower income adults who postponed a medical procedure was almost twice the percentage of higher-income adults who postponed a medical procedure. The long-term economic impact on the poor of reduced health outcomes, while difficult to measure presently, is certain to increase inequality in the future.
• Nationally, students of color and students from low-income backgrounds faced greater academic struggles with government-mandated school closures during the pandemic. Since education is highly correlated with earnings, this is certain to increase inequality of income and wealth in the future.
• The COVID-19 pandemic accelerated the rise of overdose rates in Colorado, with an outsized effect on minority groups. In Colorado, drug overdoses increased markedly in 2020 across racial and ethnic groups, with the sharpest increases occurring among Coloradans who are Hispanic and black or African American.
• When responding to COVID-19 and similar public heath crises in the future, policymakers should consider all the negative effects policies will have on the well-being of the populations they are intended to protect, not just those related to the spread of a virus.