Michael R. Strain, Columnist

Four Reasons the States Need Pandemic Aid

Yes, tax revenues are up in many places. But the national recovery depends on bringing back jobs.

February 17, 2021 at 3:30 PM UTC

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”

Local education-sector employment is down by 650,000 workers.
Photographer: John Moore/Getty Images

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The U.S. economic recovery from the pandemic been surprisingly swift, with output increasing, consumer spending recovering, and unemployment falling faster than expected. State and local governments’ tax revenues recovered rapidly as well, despite the dire predictions of many governors.

But what matters from the perspective of the overall national recovery is state and local government employment, not tax revenue. That hasn’t recovered. And that’s one of several reasons those governments need additional federal assistance.