John Locke Update / Research Brief

A Covid Misery Index

posted on in COVID-19 Series, Economics, Human Flourishing
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North Carolina has responded to COVID-19 with opaque data used in questionable ways to produce complicated rules that an increasing number of people seem to disregard. Gov. Cooper’s briefings rarely mention the commonly acknowledged economic effects of these restrictions in terms of businesses closed and jobs lost.

Since each state’s business restrictions temporarily sacrifice jobs to save lives, a reasonable question would be, “How are states doing?” That is the point of the Covid Misery Index, which measures each state on jobs lost per million state residents since February and the number of Covid-related deaths per million state residents. Just as the misery index of the 1970s added inflation and unemployment, the Covid misery index adds the rate of lives lost and the rate of jobs lost.

To make comparison easier, each measure is indexed to the difference from the highest level in May 2020. In that month, New Jersey had the greatest number of deaths per million people and Nevada had the greatest job losses per million people. The sum of these two indexed numbers then provides an overall misery index.

Lower numbers in this index represent less misery, and for that reason are better than higher numbers. If a state has more people working now than in February, that part of the index would be negative (which would be good). If those job gains offset the relative increase in deaths, the overall misery index could be zero or negative. Alaska achieved both of these benchmarks in October.

North Carolina’s death rate is among the lowest for Southern states, on par with Virginia’s, and also below the national average. North Carolina’s job losses have exceeded the national average, about even with Illinois and Pennsylvania. Still, the state has lost fewer jobs as a share of population than Virginia or Florida. Among neighboring states, North Carolina has more balanced pain, with overall misery about the same as Tennessee, which has more deaths but fewer job losses.

Among the nine states with populations greater than 10 million people, North Carolina is second to Ohio for lowest combined misery. The slow increase in deaths and relative gains in employment have helped the state move from 19th most miserable in April and May to 19th least miserable in October. North Carolina’s relative improvement in the index, however, is due in large part to other states suffering more in the fall. Deaths in North Carolina have accelerated since August, its best month on the combined index, and job gains have slowed.

This analysis may not provide a clearer policy prescription, but it does provide a simple way to compare the generally acknowledged tradeoffs between health and economic effects from the pandemic and policy responses. There is plenty to debate and more that can be refined, including the proper weighting between job losses and deaths, whether to consider higher deaths from other causes, positive tests and hospitalizations, the economic composition of different states (Florida, Nevada, and Tennessee), the lingering effects of early mass casualties in New York and New Jersey, and the differences between the European/East Coast and the Asian/West Coast variants of the virus.

I hope this index proves helpful in providing a broad view of how North Carolina and other states are doing over time and compared with one another.

As Senior Fellow, Joe examines fiscal and tax policy. He previously headed the North Carolina Government Efficiency and Reform initiative within the Office of State Budget and Management, which led to changes in automotive fleet management, natural and… ...

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