Making masks mandatory may save the economy too, Goldman Sachs economist says
TORONTO -- As more and more jurisdictions order face masks to be mandatory in public places, protests are springing up against the temporary restriction these orders place on individual freedom.
Although generally small and ineffective in changing public policy, the protests have attracted attention for their opposition to what are widely seen as useful measures designed to save lives.
Now, a new group of professionals is entering the fray, arguing that mandatory mask orders aren't just about protecting public health, but also about rescuing the economy.
Jan Hatzius, the chief economist at Goldman Sachs, released a report last week calling for a national mask mandate in the United States. If the country does not take that step, he argued, it will have to resort to more severe lockdown measures that could shrink the American economy by five per cent.
Investors are already worried about what will happen to the U.S. economy because of fast-rising COVID-19 caseloads in many southern states, Hatzius said.
"What Goldman Sachs is trying to say to people is 'There is a cost to not getting coronavirus under control,'" Marvin Ryder, an associate professor at the DeGroote School of Business at McMaster University in Hamilton, told CTV News Channel on Tuesday.
"If you don't get this under control, there are severe consequences. There's only one choice left, and that would be a severe lockdown."
Those lockdowns deal a severe economic blow, as businesses close and consumers stop spending money. The Canadian economy plunged by 7.5 per cent in March and an unprecedented 11.6 per cent in April as large parts of the country were shut down to ride out the initial wave of the pandemic. In the U.S., where the measures taken were less strict and more patchwork, the economy still contracted by 17 per cent between January and April, according to Goldman Sachs.
Many countries have made mask-wearing compulsory in at least some public gathering places during the pandemic, including the United Kingdom, France, Germany, Mexico and India. There is no such national mandate in Canada or the U.S., although some individual jurisdictions within each country have enacted similar policies. Wearing a mask in indoor public settings is now mandatory in Toronto and will be later this month in Montreal.
A recent poll conducted by Nanos Research for CTV News found that 54 per cent of Canadians support mandatory masks in all public spaces across the country, with an additional 25 per cent somewhat supportive. Some doctors and public health experts have been pushing for mandatory masks as well, arguing it would be an especially worthwhile initiative in the provinces where COVID-19 remains a greater public concern.
THE ECONOMIC IMPERATIVE
Ryder described the Goldman Sachs report as an attempt to convince those who do not agree with the public health message that there are other advantages to "[giving] up a little civil liberty" and accepting public mask requirements.
"A little compromise here means we can keep the economy going," he said.
Goldman Sachs' research found that states that mandated masks saw approximately 25 per cent of their population shift to always or frequently wearing them in public within the first month or so, in addition to those who were already wearing them often.
"[This] suggests that a national mask mandate could increase US face mask usage by statistically significant and economically large amounts, especially in states such as Florida and Texas that currently don’t have a comprehensive mandate and are seeing some of the worst outbreaks," Hatzius wrote.
The research also found that new COVID-19 case rates fall significantly starting about a week after a state's mask mandate comes into force, and continue to fall for at least the following month, with death rates decreasing as well.
States without mandatory mask orders accounted for half of the U.S. population but two-thirds of all new COVID-19 cases as of July 1, Hatzius said.
"If a face mask mandate meaningfully lowers coronavirus infections, it could be valuable not only from a public health perspective but also from an economic perspective because it could substitute for renewed lockdowns that would otherwise hit GDP," he said.
Regardless of whether face masks are mandatory or not, Americans are more likely to wear them in public than Canadians, according to recent polling by British firm YouGov.