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Jul 25, 2020

The Economics of Wearing A Mask

Face covering requirements have turned into contentious political debate across the country, even as top Trump administration officials say that mask-wearing could revive the economy within 2 months. Centers for Disease Control director Dr. Robert Redfield, a previous mask skeptic, said in a recent interview that if “we could get everybody to wear a mask right now I think in 4, 6, 8 weeks we could bring this epidemic under control.”

That’s why face masks are now required nationwide at all Walmart, CVS, Kroger, Kohl’s, Starbucks, and Best Buy stores, as CNN Business reports. But surging numbers of COVID-19 cases threaten to shut the economy back down, as some cities and states are returning to their previous stay-at-home orders.

It’s becoming more clear that we either go back into lockdown if we don’t don the masks, or we can have an economic recovery in just a couple months if we’re resolute about wearing face coverings. A Goldman Sachs study estimated that a nationwide mask mandate would save America $1 trillion, or 5% of the country’s Gross Domestic Product. We can save the economy if everyone masks up, and a refusal to wear masks endangers not only our collective health but the whole country’s ability to return to our full financial livelihoods.  

The US is not the only country where masks have been controversial. Great Britain has been even more hesitant to wear masks, according to the Washington Post. But the US  leads the world in both coronavirus cases and fatalities, despite being only the 3rd most populous country. Any rapid, V-shaped recovery is unlikely unless the country starts wearing masks, and it might help to consider this in economic terms. 

Wearing Masks is Worth $1 Trillion

The full Goldman Sachs report on face masks and the economy breaks down the very real possibility that much of the country will be forced back into stay-at-home orders, as the outbreak is now far worse than during the original lockdowns of March and April. The report uses complex “analytical tools” to ultimately conclude that a nationwide, mandatory mask requirement would end shutdown orders—and prevent any new ones—with an economic benefit of $1 trillion—or $3,000 per person.

How did they determine these dollar amounts, and are they credible? Goldman Sachs is the largest investment bank in the world, and they conducted their research by asking 3 basic questions:

  1. Do mandatory mask orders really lead to more mask wearing?
  2. Do masks really work against COVID-19 prevention, and if so, by how much?
  3. How much is it worth to the US economy if we lowered the spread of coronavirus to whatever degree that a mandatory mask rule would stop transmission? 

Goldman Sachs does not mask their findings and covers each of these answers in detail. 

Do Mandatory Mask Orders Work?

Their research notes that the United States has been among the world’s least restrictive countries when it comes to mask requirements, pretty much leaving mask rules to individual state governors. Russian and Brazil have also allowed regional officials to decide mask rules, and, well, it’s not working out well for them either.

Other nations have been significantly more successful at containing the spread of coronavirus, requiring masks outside the house at all times. China, France, Germany, and Japan have all gone this route and have dropped their totals to some of the lowest recorded COVID-19 rates in the world.  

“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,” Goldman Sachs says in its analysis. “Specifically, we estimate that a national mandate would increase the national average share of people who ‘always’ or ‘frequently’ wear masks by 15%.”

Do Masks Stop COVID-19 Transmission? 

This is the trillion-dollar question we’ve all been thinking about lately. And research strongly suggests that masks do significantly halt the transmission of coronavirus. 

Goldman Sachs factors together 3 different models in this analysisa county-by-county analysis in states that imposed mask orders, an analysis of other nations that enacted mask orders, and then a 3rd model factoring in how other COVID-19 protections (like limiting mass gatherings) may have limited the spread less or more than masks did.

Their analysis found that in states that don’t have a mandate, new cases would be cut by almost 2/3 if they did. For states with mandates, new cases would be cut by half, as the study found people take national mandates more seriously than state mandates. Averaging those 2 together, a mandatory mask rule would be extended to lower new COVID-19 infections by about 58%, a drastically effective move that would contrast with months of otherwise nonstop increases.

How Could Mask Wearing Be Worth $1 Trillion? 

Goldman Sachs’ analysis considers that sizable 58% drop in new cases but also worries about another round of shutdowns and stay-at-home orders now that the COVID-19 infection and death rates are nearly as bad as they’ve ever been.

“Our analysis suggests that the economic benefit from a face mask mandate and increased face mask usage could be sizable,” the report says. “A national face mask mandate could potentially substitute for renewed lockdowns that would otherwise subtract nearly 5% from GDP.”

Or in plain English: GDP stands for Gross Domestic Product, or the monetary value of all the goods and services the US economy is producing. A 5% loss represents the US losing $1 trillion, or $3,000 per person. If you think the economy is bad now, imagine every American losing another $3,000 and the calamity that would come with that.

Masks Make Money

Aside from the big picture improvements that masks bring to the US public health and the economy, there is also the matter that masks are a boon for small business. The Verge reports that e-commerce site Etsy doubled its overall sales in the month of April, powered almost entirely by the sales of masks. The platform sold 12 million masks in the month of April alone, to the tune of a cool $133 million.

The European and Chinese economies are currently enjoying the recoveries that we had hoped to be having right now. That’s because their governments were stricter about demanding masks. It’s time to face reality, America, that the economy will not fully reopen or rebound until we start wearing the masks.

About the author

Joe Kukura
Joe Kukura
Joe Kukura is a San Francisco freelance writer whose work also appears in SF Weekly and SFist. He’s written financial advice for NerdWallet, tech industry analysis for the Daily Dot, sports content for NBC Bay Area, and good, old-fashioned clickbait for Thrillist.

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