With vaccination efforts allowing states to reopen more and more but the unemployment rate still high at 6.2 percent, WalletHub recently released updated rankings for the State Economies Hit the Most by Coronavirus, as well as accompanying videos.
To identify which states are most vulnerable economically, WalletHub compared the 50 states and the District of Columbia across 13 key metrics. The data set ranges from 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. To view the full report and your state’s rank, visit: https://wallethub.com/edu/state-economies-most-exposed-to-coronavirus/72631
Following are highlights from WalletHub’s report, as well as a Q&A with WalletHub analysts.
Impact of COVID-19 on California Economy (1=Most, 25=Avg.):
• 22nd – GDP Generated by Highly Affected Industries as Share of Total State GDP
• 21st – Share of Employment from Highly Affected Industries
• 22nd – WalletHub’s “States Whose Unemployment Claims Are Recovering the Quickest” Score
• 25th – Share of Employment from Small Businesses
• 37th – Share of Workers Working from Home
• 36th – Share of Workers with Access to Paid Sick Leave
• 29th – State Rainy Day Funds as Share of State Expenditures
• 11th – State Fiscal Condition Index
With Analyst Jill Gonzalez
Q: What will the coming months be like for most state economies?
A: State economies should be bolstered in the coming months through a combination of vaccination and the American Rescue Plan. As more people become eligible for the vaccine and receive it, states will continue to eliminate restrictions, which will lead to greater spending at businesses and a reduction in unemployment. The American Rescue Plan should work wonders for state economies, too, through a combination of individuals spending more due to their stimulus checks, businesses avoiding layoffs through PPP loans and states getting federal funding to replace lost tax revenue.
Q: What makes one state’s economy more exposed to coronavirus than another state’s economy?
A: This pandemic has hit certain industries especially hard, such as accommodation and food services, entertainment and retail trade. Some states have a higher concentration of jobs in highly affected industries or a higher share of state GDP from those industries than others. WalletHub’s study used 13 core metrics to measure the impact of COVID-19 on state economies, with the most weight going to the share of each state’s GDP and workforce that are from highly affected industries, along with the rate at which initial unemployment insurance claims are being made.
Q: Why has Louisiana’s economy been hit the most by coronavirus?
A: Louisiana’s economy has been hit the most by coronavirus because prior to the pandemic it had a high share of employment in some of the most impacted industries, including oil and gas extraction; accommodation and food services; arts, entertainment and recreation; and retail trade. Louisiana doesn’t have a lot of extra cash to fall back on during its financial troubles, as the state’s rainy-day fund is able to cover just 5.4 percent of its general fund expenses for 2021.
Q: Why has Washington’s economy been hit the least by coronavirus?
A: One reason why Washington’s economy is hit the least by coronavirus is that it has the third best work from home infrastructure and one of the largest shares of workers working from home. In addition to a good work from home infrastructure, Washington has seen one of the smallest reductions in Real GDP during the COVID-19 pandemic.