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A national mask mandate could reduce US GDP losses by 5%

Karen Ho
By Karen Ho

Global finance and economics reporter

A national mask mandate could help the US avoid another round of COVID-19-related lockdowns, as well as the steep economic losses they would generate, according to research by Goldman Sachs.

The investment bank calculates that social distancing and government restrictions to curb the spread of the virus reduced the US’s gross domestic product by 17% between January and April. A nationwide requirement to wear masks would cut the number of infections, staving off shutdowns and sparing the US economy from a 5% hit to growth, the bank said in a note to investors.

Goldman’s research analysis, led by chief economist Jan Hatzius, is based on data from more than 20 countries and 20 US states, including their mask policies, implementation dates, and mask usage rates. It comes as the number of cases is growing in parts of the US.

The US Centers for Disease Control and Prevention have called masks a “critical preventative measure” and recommend that people wear them in public settings. But the US is currently not requiring mask-wearing, which research has shown can significantly reduce infections.

The share of people who say they always wear a mask in public varies widely from state to state, according to Goldman Sachs, which used public opinion polls from YouGov in its analysis. It ranged from about 30% in Minnesota to nearly 80% in Massachusetts.

A national mask mandate would have the biggest health and economic benefits in states like Florida and Texas, which are experiencing some of the worst COVID-19 outbreaks, according to the bank. These states also lack statewide mask-wearing policies. Florida governor Ron DeSantis, for example, has explicitly said he will not make masks mandatory despite the rapidly escalating number of cases in his state.

Goldman Sachs estimates a national mandate would lead to a 25-percentage-point rise in mask usage in states that currently have no mask policy. In places that already require masks, the increase would be smaller: five percentage points.

Implementing a national mandate in the US wouldn’t be easy, given the backlash against masks among some Americans, including president Donald Trump.

There are other ways to curb the spread of the virus without shutting down economic activity. A May analysis by the International Labor Organization, a United Nations agency, found testing and tracing could reduce labor market disruptions by up to 50%. The agency estimated that the average loss of work hours in countries with the most robust testing and tracing programs was about 7%, compared with 14% in countries that had the weakest ones. “Widespread testing and tracing enables countries to better utilize information and rely less on severely restrictive measures,” the report noted.

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