Based on its new Coronavirus Policy Response Simulator, Penn Wharton Budget Model predicts that 18.6 million Americans will lose their jobs by the end of June if each state maintains its social distancing restrictions as of April 30.
PWBM is a non-partisan initiative that provides economic analysis of public policy’s fiscal impact for policymakers to make data-based decisions. Released on May 1, the Coronavirus Policy Response Simulator shows health and economic projections for each state at the end of June. These projections include the number of cumulative reported cases and deaths, percent change in gross domestic product, and employment change based on different scenarios of state reopenings.
The simulator projects that if all states maintain their current restrictions as of April 30 and individuals continue current social distancing practices, 18.6 million additional jobs will be lost nationwide by June 30 and the number of deaths will rise to approximately 117,000 in the United States.
If people continue social distancing but all states fully reopen by June 30, the simulator projects a loss of 500,000 jobs in the next two months and approximately 350,000 cumulative deaths.
After weeks of enforcing statewide stay-at-home orders, some governors have started reopening their states in hopes of stimulating the economy. As of May 4, 24 states have reopened at least partially and six states, including Pennsylvania beginning May 8, will lift stay-at-home orders soon, according to The New York Times.
PWBM held a virtual panel discussion Tuesday on LinkedIn with PWBM Director Kent Smetters and senior analysts Alex Arnon and John Ricco, both of whom worked on the simulator. Smetters said the simulator was created to predict how people might act under different lockdown policies and is not a commentary on whether saving lives or jobs is more important.
“Fundamentally, it’s really a tradeoff between 300,000 deaths versus saving 18 million jobs,” Smetters told The Daily Pennsylvanian. “We are not going to take a position on how you think about that tradeoff, but they’re very stark choices.”
Stay-at-home orders have recently prompted people to take to the streets and protest the lockdowns in states such as Colorado, Washington, Texas, and Pennsylvania. Protesters argue that the restrictive measures are an overreaction and will cause long-term damage to local economies.
Users of the simulator can view different projections based on whether the state maintains its current restrictions as of April 30, partially reopens, or fully reopens. A partial reopening is an immediate lift of emergency declarations, stay-at-home orders, and school closures, and a full reopening also includes lifting restrictions on businesses and restaurants, according to the simulator.
Users can also view projections based on individuals' decisions to maintain current social distancing practices or relax these efforts for a return to pre-pandemic behavior by the end of December 2020.
Arnon said that the PWBM's simulator is unique from others in its ability to project the impact of different levels of policy for each state based on data at the county level like population density, public transit, and labor force and industry characteristics.
“Something we’re really focused on handling well is that there’s really not one epidemic going on, there’s at least 50 across states and really more within counties," Arnon said.
After collecting all available data for local economies and epidemiological conditions in U.S. counties, Arnon and Ricco carried out a statistical analysis to understand the effects of policies and social distancing on employment and GDP growth for each county.
Arnon and Ricco plan to update the model on a weekly basis and hope that policymakers will use it in the coming weeks to assist in their decision-making.
“We hope that the public will find it useful, but the goal here is to be useful for state and local policymakers, because they have some really difficult decisions to make both now and in the coming weeks and months,” Arnon said.