Giving up on fighting COVID-19 is Alaska’s worst option

The COVID-19 pandemic has certainly taken its toll on Alaska’s economy. Many local businesses are struggling and some have closed. Unemployment is at a record high, and many Alaskans are anxious about being able to pay their bills and want to get back to work. Tools such as the Opportunity Insights Economic Tracker make it possible to see in real time the economic impact of COVID-19 on Alaska. Job postings in the tourism industry are down almost 40% compared to January, even though summer is the peak season, and the number of small businesses open in Alaska has declined by more than 30%.

A recent study shows that almost 90% of the decline in economic activity is due to people voluntarily choosing to stay at home. As people become increasingly aware of the potential for serious long-term consequences, even for the young and those who experience relatively “mild” symptoms, they are less likely to risk infection. Therefore, getting the economy back on its feet requires continued diligence to get the outbreak under control. As Gov. Mike Dunleavy noted in a recent op-ed, protecting Alaska’s long-run economic health is directly linked with successfully containing the virus’ spread. Reopening the economy without accompanying measures to protect public health would be ineffective and costly.

Only when Alaska has successfully limited the prevalence of the disease and people feel safe will the economic recovery truly begin. Fighting the virus will entail a multi-pronged approach that requires shared sacrifice. Restrictions and mandates, such as targeted temporary shutdowns of high-risk businesses, limits on occupancy, travel restrictions, workplace regulations and mask mandates are effective at reducing transmission, but the costs are often disproportionately borne by the affected businesses and their employees. They are suffering in the interest of public health and deserve compensation. Moreover, continued financial support for these businesses and employees is vital to limiting long-run economic damage.

Fighting the virus also requires a more active federal policy in response to the pandemic, including expanded resources for testing and contact tracing to make it possible to identify and isolate infected individuals. This federal support, in combination with new and continued state and local restrictions that are targeted at the most likely pathways for the virus to spread, would allow Alaska to control its current outbreak. Our congressional delegation and state political leaders need to fight the virus and keep impacted Alaskans afloat until the pandemic subsides.

The pandemic will end in one of three ways. We can reach herd immunity through community spread, with the associated death toll and potential overwhelming of our healthcare capacity. A vaccine could be developed, mass produced and widely distributed, but even the most optimistic projections indicate that this solution is still many months to a year away. The final option is to fight the virus — exhaustively test, identify and quarantine the infected, continue mask-wearing, social distancing and comply with temporary restrictions and mandates designed to protect public health. Fighting the virus is our best option, because it buys time for a vaccine to be developed and protects our health care system as we move toward herd immunity.

All authors are economists at the University of Alaska Anchorage: Kevin Berry, Assistant Professor; Hannah Hennighausen, Postdoctoral Researcher; Alexander James, Associate Professor; Michael Jones, Term Assistant Professor; James Murphy, Rasmuson Chair of Economics.

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