- Budget experts found 3 million COVID-19 vaccines per day would boost employment by 2 million in July.
- The increase in shots would also boost GDP growth by a percentage point in the third quarter.
- Biden’s stimulus targets pandemic and unemployment aid, but higher vaccinations rates would speed up economic recovery.
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The US is currently administering, on average, 1.7 million COVID-19 vaccines per day. But budget experts say that is not enough to prompt the economic recovery the country truly needs.
In a report released on Monday by Penn Wharton Budget Model – a nonpartisan economic research organization at the University of Pennsylvania – it found that if the US increased daily vaccine doses to 3 million, then 2 million more people would find themselves employed. Also, 3 million daily doses would boost real gross domestic product by about 1% over the summer, with smaller effects later in the year.
“The COVID-19 pandemic and resulting widespread adoption of social distancing in March of 2020 led to the deepest recession on record – the continuation of the pandemic and social distancing represents the most significant drag on the economy in 2021,” the report said. “The pace of the economic recovery this year is therefore closely tied to the evolution of the pandemic, which in turn depends on the pace of vaccinations.”
John Ricco, a Penn Wharton Budget Model senior analyst and one of the authors of the report, told Insider that increasing the number of shots now will prevent an increase in COVID-19 cases in the summer.
“If you were able to get up to 3 million doses per day, you could really prevent that summer wave, and in response, the economy would look a lot better because our model tracks the interrelationship between the course of the pandemic and the economic recovery,” Ricco said. “So if the pandemic squares in the summer, then that means that you’re going to have fewer jobs and lower GDP.”
3 million daily vaccines would raise GDP by a percentage point in the third quarter
The report projected a total of 26.5 million COVID-19 cases in 2021 if 1.5 million vaccines continue to be administered daily in the US. However, if 3 million daily doses are distributed over the next few months, the report said, the total number of COVID-19 cases would drop to 24.5 million.
Here are the main findings on economic recovery in the report:
- At the pace of 1.5 million vaccinations per day, employment would rise to 152 million in July with 5% GDP growth in the third quarter;
- 3 million vaccinations per day would boost employment by 2 million – to 154 million – in July, raising GDP growth by a percentage point in the third quarter;
- Averaging over a full year, raising the daily vaccination rate to 3 million would increase employment in 2021 by nearly 1 million and GDP growth by a third of a percentage point.
The report noted that in the second half of the year, differences between the alternative vaccination rates will diminish because most people will be vaccinated by late fall, so the differences will be most noticeable in the summer.
Increasing vaccination rates has been a primary focus of President Joe Biden, who made a goal of administering 100 million shots in his first 100 days. And his $1.9 trillion stimulus plan, which is now under consideration in the Senate, includes funding for a more robust pandemic response, along with extended unemployment aid.
The pace of economic recovery is dependent on the pace of vaccinations, the report said, and with the country’s high unemployment rate, administering vaccines will be all the more urgent from a health and economic standpoint.
According to a report released on Monday from the Center on Budget and Policy Priorities, private and government employers have 10 million fewer jobs than they did in 2020, and economic recovery through pandemic relief will help restore the labor market.
“The relief package enacted at the end of the year provides important but temporary help to unemployed workers and others struggling to make ends meet,” the CBPP report said. “It should help strengthen the recovery, according to the Congressional Budget Office and other forecasters. But robust additional measures, such as those in the economic relief bill now working its way through Congress, are critical for relieving the widespread hardship among families and achieving a full, equitable recovery as quickly as possible.”
The Johnson & Johnson vaccine, which was approved by the Food and Drug Administration on February 27, will likely speed up vaccination efforts, Ricco said, and it has received support from experts who commend its single-dose usage.