Some red states saw their economies recover from pandemic lows, and it shows how complicated reopening is

Salt lake city
Salt Lake City in Utah, which has bounded back. DenisTangneyJr/Getty Images
  • Some red states have seen their economies come roaring back, Politico reported.
  • Meanwhile, states like New York and Massachusetts continue to remain well below pre-pandemic levels.
  • Utah and Idaho are the only two states above their pre-pandemic levels of employment.
  • See more stories on Insider’s business page.

Utah’s economy came roaring back and then some from pandemic devastation. Meanwhile states like New York, Hawaii, Massachusetts, and Nevada continue to lag far behind their February 2020 economies.

That’s according to an index from the Federal Reserve Bank of Philadelphia, which tracks improvements and declines across four major economic measures in each state. As of April, at least 12 states have registered gains since February 2020. That indicates that their economies have not only fully recovered, but are showing gains and even growth.

As Politico’s Rebecca Rainey and Eleanor Mueller reported in an analysis, states led by Republicans may be faring better in economic recovery. For instance, Utah’s recovery has blown other states out of the water, according to the Philadelphia Fed index. Idaho also follows Utah in seeing robust recovery and growth.

In fact, those states are the only two that currently have more people employed than in February 2020, as can be seen in the map below:

Utah was 1.4% above pre-pandemic employment in May, and Idaho was 1.2% above pre-pandemic employment. On the other hand, Hawaii is almost 15% below pre-pandemic employment. Nonfarm payroll employment is one of the four metrics used by the Philadelphia Fed to look at a state’s economy.

The unemployment rate is also one of the measures used by the Philadelphia Fed to look at how well a state economy is doing. Both Idaho and Utah have unemployment rates well below the national rate of 5.8%:

Nevada, New York, California, and Connecticut – all states with Democratic governors – were among the states far below their February 2020 Philadelphia Fed indexes. All four had high unemployment rates in May, ranging from 7.7% to 7.9%. GOP-led New Hampshire had the lowest unemployment rate among the states and DC in May at 2.5%.

A couple key factors boosting red state economies are earlier reopenings and generally more relaxed restrictions. As Politico reported, Utah was one of seven states that did not enact a stay at home order. In contrast, states like New York and Massachusetts – both of which were hard hit by the virus and its economic impact – continue to stay far below economic levels from February 2020.

But that model of earlier reopenings comes with its own downsides and risks for the workers fueling the boom. Service workers keeping economies afloat in states that opened earlier have faced risks to their own health and safety. As Gaby Del Valle reported for Eater, many restaurant workers felt anxious about returning, policing customers’ safety protocols, and their own financial stability.

Female tipped workers surveyed by advocacy group One Fair Wage said that tips were down and harassment was up during the pandemic, prompting advocates like Sen. Bernie Sanders to call for an end to the tipped wage.

The robustly recovering economies also seem to run counter to claims that enhanced unemployment benefits were keeping workers from coming back; the Philadelphia Fed data is from April, prior to announcements from governors in 26 states that federal benefits would be cut off preemptively in an attempt to get workers back.

Northeast states are also seeing their own signs of recovery, Insider’s Grace Dean reported, with the Wall Street Journal finding that high vaccination rates may be propelling a flurry of activity and drops in unemployment.