Canada’s response to the COVID-19 pandemic continues to be hampered by the false belief among some government leaders that restricting activity and movement will “damage” the economy. In fact, growing international evidence confirms that there is no “trade-off” between protecting health and protecting the economy: in fact, they go together. In this column originally published in the Toronto Star, Jim Stanford explains:
Health and the Economy Go Hand in Hand
By Jim Stanford
With new stay-at-home orders covering many parts of the country, Canadians are settling in for several more weeks (at least) of daunting isolation. Restrictions are being tightened to slow the spread of COVID, until vaccines can turn the tide of the pandemic.
Despite accelerating infection and overflowing hospitals, many oppose the new restrictions on grounds that their economic costs are just too high. Business lobbyists grumble that health rules are onerous and unfair: including retailers, airlines, cinemas, ski resorts, gyms, and more. Each invokes comparisons to other sectors which supposedly get off easier. The common thread in their resistance is an assumption that strong health restrictions are deeply damaging the economy.
As the pandemic rolls on, however, it is increasingly clear that the best way to protect the economy is to stop COVID. Yes: lockdowns reduce economic activity and employment. But not locking down, letting the virus run rampant, causes more economic damage – on top of the toll in lives and suffering. Anyone concerned about the economy should be pleading for fast, powerful lockdowns, not demanding a return to business-as-usual.
The correlation between controlling contagion and economic recovery is clear across Canadian provinces: those with less COVID cases have achieved the strongest employment results since the pandemic hit. It’s not often that New Brunswick leads the nation in employment growth – but it did last year. Its near-elimination of COVID was the obvious reason.
In this context, the protestations of premiers Doug Ford and Jason Kenney that fighting COVID must be “balanced” against the interests of business were always self-defeating. Even if they were motivated solely by desire to protect business, their top priority should have been stopping COVID. The faster and harder that battle was waged, the better business fared.
The correlation between COVID suppression and economic performance is also obvious in international data. Several countries moved fast with severe but temporary restrictions on mobility and business; and they are now harvesting the fruits of their foresight. COVID-slaying nations like Australia, China, New Zealand, Korea, and Taiwan are already enjoying powerful and sustained economic recoveries. Their economies (forecast to grow by 5 to 8 percent this year) are racing far ahead of those still lurching from one wave of infection to the next.
No-one escaped the economic fallout of the pandemic. But after powerful action to suppress contagion, these countries are now recovering strongly and predictably. Elsewhere, the economic outlook is far less certain. In Canada, for example, our hopeful summertime recovery is already disintegrating: employment is now falling again. America, Britain, and other places where COVID suppression failed miserably are faring even worse.
A particularly powerful illustration of the link between public health and economic recovery is provided by the experience of Victoria, the second largest state in Australia. After initial success limiting COVID’s spread, a second wave took hold in Melbourne (Victoria’s capital), infecting 700 people per day by early August. The state government ordered a strict lockdown, more severe than anything yet experienced in Canada: overnight curfew, closure of most workplaces, and strict bans on social gatherings and travel.
The government was pilloried for its response – facing sustained attacks from its federal counterpart, business groups, and conservative commentators, all lamenting Victoria’s descent into “dictatorship.” Yet after 111 long days, Victoria achieved something almost unheard of: mass community spread was stopped, and new cases fell to zero by late October. Now the state economy is blossoming: employment rebounded 2.2% in November alone, retail sales grew 22% the same month, and Victorians are flocking back to restaurants, pubs, and malls. All those CEOs whining about Canada’s late and half-hearted restrictions must be drooling with envy.
Leaders like Kenney and Ford were unduly influenced by short-sighted concern with business profits. Their reticence has created needless harm, for both public health and the economy. If we’d moved faster and more powerfully to limit contagion, business would already be better off.
The economy is made up of human beings who work, produce, and consume. There’s no trade-off between the economy and the health of those same human beings. The sooner we recognize they are one and the same, the sooner we can finally get serious about winning this battle.