Just a few weeks ago, much of Europe was where Massachusetts is now in responding to a resurgent virus, restricting some but not all business activity in the hopes that those regulations would be enough to contain infections.
They were not, and now countries from Ireland to Italy, England to Germany, have closed up much of their economies, a hard but effective step that is starting to slow the spread in Europe. It could prove even harder in the United States.
The key difference is that European countries have backed up their more stringent closures with stimulus spending that softens the blow on workers and the economy. In the United States, similar programs kept the economy afloat in the spring and summer, but their absence now is robbing governors such as Charlie Baker and local mayors of a crucial backstop for the day when they may have to directly confront the question of a harsh lockdown.
“There’s a very straightforward connection here,” said Marc Draisen, executive director of the regional planning organization Metropolitan Area Planning Council. “If people see they’re getting some help to make it through, they’re going to be more receptive to restrictions.”
As the number of new infections has mounted, Baker has struck an increasingly ominous tone. But he has so far stopped short of tightening the restrictions that he rolled out in early November, which include curfews, early closings for restaurants, and smaller indoor gatherings.
The seven-day average of new cases in Massachusetts is higher per capita than in Germany, but below the US national average and lower than that of other European countries — about half that of Italy, for example, according to data tracked by Applied XL and Stat. Still, the spike in cases is approaching those seen during the first peak of the virus in the spring, with new infections well over 2,000 a day over the past week.
Many experts fear the coming winter and holiday celebrations could quicken the spread even more, and they’ve stepped up their responses. On Monday in New York City, for example, Mayor Bill de Blasio was warning of widespread restrictions if a resurgence in cases is not brought under control. By Friday, governors from Vermont’s Phil Scott to New Mexico’s Michelle Lujan Grisham were announcing new restrictions to stop COVID’s spread.
Still, most officials here are loath to lock down again with the state’s economy just barely treading water: In Massachusetts alone, hundreds of thousands of people remain out of work, and industries from restaurants to hotels to tourism are seeing little sign of a rebound.
The reality, said Alan Clayton-Matthews, a professor of economics and public policy at Northeastern University, is that businesses won’t really bounce back until the virus gets knocked down, and that could be an argument to take another hit, hopefully for just a few weeks, and shut down more fully.
“In Europe they seem to be making a calculus that the best thing to do is a more complete shutdown,” he said. “If you don’t tamp down the rate of new infections, the economy’s not going to recover.”
France, for instance, has set aside $7 billion in aid for small businesses this month alone.
“There is no limit to supporting shopkeepers and the economy because the worst thing would be tens of thousands of companies closing, having people unemployed and losing skills,” France’s finance minister, Bruno LeMaire, said last week.
Both the United Kingdom and Germany have extended government programs that pay 80 percent of wages for furloughed workers.
President-elect Joe Biden has promised to take a more aggressive tack in combating the virus. On Monday, he announced a task force that will help craft a federal pandemic response and provide guidelines for difficult decisions about local restrictions. But economists, business leaders, and local officials agree one thing that’s definitely needed from Washington now is money: a second federal rescue package.
Local mayors in Greater Boston have been weighing shutdowns of indoor dining and other measures, but these decisions are difficult without being able to offer financial relief.
“They are not painless calls,” said Somerville Mayor Joe Curtatone, who, despite laying out some of the strictest restrictions in Greater Boston, has seen case rates climb in his city in recent weeks.
“As a mayor, you are closer to the ground. If a business closes, it’s not a brick and mortar, it’s their hopes and dreams,” he added. “You can’t walk the fence on this stuff.”
It was simpler in the spring, when so much was unknown about the virus, including how long it might take to contain. Baker and other governors in hard-hit states swiftly shut down broad swaths of their economies. And Congress quickly passed the $2.2 trillion CARES Act, the biggest economic stimulus in the nation’s history. For several months, it helped.
More than $30 billion coursed through Massachusetts, according to the Massachusetts Taxpayers Foundation, helping small businesses maintain payrolls; bailing out big employers such as hospitals, colleges, and the MBTA; providing $1,200 stimulus checks to individuals; and boosting unemployment benefits for nearly 700,000 people who lost their jobs.
Without the federal infusion, the state economy “would have been in much more dire straits,” said Eileen McAnneny, president of the taxpayers group. “It was very necessary in keeping a lot of businesses and households afloat.”
But that money has been nearly spent, countless businesses have closed, and more than 300,000 still-laid-off workers are struggling to afford food, housing, and other essentials.
The end, in August, of expanded unemployment relief — an extra $600 per week for many laid-off workers — hit especially hard. The number of jobless people unable to pay their rent in Massachusetts has since surged, according to the Metropolitan Area Planning Council, from just over 5,000 households in July to nearly 25,000 in October. And that, along with the end of the state’s eviction moratorium, has housing advocates terrified many will be pushed out of their homes.
“The single worst thing we could do, from the perspective of this disease, is force people into a situation where they become homeless or have to double up in housing,” said Draisen, the MAPC official. “The evictions themselves are just the tip of the iceberg.”
A new stimulus package could include help for renters — a version passed in May by House Democrats allocated $100 billion for them. Trade groups for restaurants, tourism, and other hard-hit small businesses are pushing for aid as well. Much of the debate in Washington has centered on whether to bail out state and local governments. And, leading up to Election Day, President Trump had signaled support for direct aid to households.
In Europe, the current lockdowns aren’t as Draconian as those imposed on the continent in the spring. Schools, for example, remain open, some nonessential businesses can remain open, and there is often an end date to the new restrictions.
Kenneth Wattret, chief European economist at IHS Markit Economics, said early, decisive restrictions have proven most effective. And indeed, some major European countries — France, Belgium, and Ireland among them — have seen new case numbers fall in recent days.
“The countries that have accepted the problem, dealt with it most stringently, earliest, end up with the better outcomes,” he said.
While a more complete closure of the Massachusetts economy may seem premature to some, it should not be off the table, said Framingham Mayor Yvonne Spicer.
“You’re dealing with so many moving parts,” said Spicer, whose city has a higher-than-average positivity rate. “If we can avoid a complete lockdown, that would be great. It’s really going to be depend on the coronavirus numbers.”
But if cases do rise further in Massachusetts, the state will inevitably have to consider even more aggressive measures, said Sam Scarpino, director of Northeastern’s Emergent Epidemics Lab. A lockdown would be a lot more palatable, he said, with another big rescue package to cushion the economic blow.
“It’s one of the really tragic pieces, not having a second stimulus or a restaurant bailout,” Scarpino said.
Tim Logan can be reached at firstname.lastname@example.org. Follow him on Twitter at @bytimlogan. Shirley Leung is a Business columnist. She can be reached at email@example.com.