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Here’s How Much Wearing a Mask Can Save the U.S. Economy

Last Updated September 25, 2020 8:41 PM
Stephanie Bedard-Chateauneuf
Last Updated September 25, 2020 8:41 PM
  • More U.S. states step back from reopening as virus cases surge.
  • Going back into full lockdown would be too damaging for the economy.
  • A national mask mandate could slash infections and save the U.S. economy from a 5% hit.

All 50 states began to reopen after the pandemic pushed the United States into lockdowns in March. Now, an increasing number of states have rolled back reopening plans and imposed new restrictions, as local virus cases have spiked. The virus is spreading because not enough people are wearing a mask.

U.S. Can’t Afford To Go Back Into A Complete Lockdown

While they have helped to save lives, lockdowns hit the U.S. economy hard. Nearly 50 million Americans have filed for unemployment  since mid-March. Many retailers went bankrupt or closed their doors permanently.

Goldman Sachs estimates that lockdown efforts –both official government restrictions and actual social distancing–subtracted 17% from U.S. GDP between January and April. Other countries with more aggressive restrictions have seen even more significant economic impacts.

Going back into complete lockdown would be very damaging to the economy. The United States can’t afford another lockdown.

Hartmut Issel, head of APAC equities at UBS Global Wealth Management, said :

Locking down an entire country … cost(s) you up to 3% of GDP per month, so even the richest nations on the planet cannot afford another two, three months complete lockdown.

But as infection rates rise following a broad reopening, we need to find a solution to slow down the spread of the pandemic. Wearing a mask appears like the best solution since there’s still no vaccine or effective treatment available. Masks have been proven to help  prevent the spread of the virus.

A study from April 2020 reports :

As governments plan how to exit societal lockdowns, universal masking is emerging as one of the key NPIs (non-pharmaceutical interventions) for containing or slowing the spread of the pandemic.

A National Mask Mandate Would Be Beneficial

The problem is that wearing a mask is still not mandatory across the United States, and many Americans are refusing to wear a mask . Trump’s refusal to wear one doesn’t help. Unlike the president, Vice President Mike Pence encourages wearing a mask  to slow the virus spread.

Trump should order face mask wearing for all Americans, as it would do a lot of good.

According to Goldman Sachs, a face mask mandate would meaningfully reduce the daily growth rate of new cases and save the U.S. economy up to 5% in GDP instead of additional lockdowns that would hit GDP.

Jan Hatzius, Goldman’s chief economist, said that a national mask mandate  could increase the percentage of people wearing a mask by 15 percentage points and cut the daily growth rate of cases by one percentage point to 0.6%. He also found that the rule could replace a lockdown that would subtract nearly 5% from GDP growth.

Goldman Sachs research
Goldman found that mask mandates are associated with significant declines in virus cases and fatality. | Source: The Market Ear 

A mask mandate would thus be beneficial not only from a public health perspective but also from an economic perspective.

A study found that if 80 to 90%  of the population wears a mask, the disease will ultimately be eliminated.

But without masking, we could face a second wave in four-to-five months. This would mean more infections and more deaths, which in turn would cause a deeper recession. A brutal stock market correction could follow.

Nobody wants those things to happen.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.