Five of the six states with the lowest unemployment rates in the United States are in the Midwest, have Republican governors and almost no restrictions to slow the spread of the coronavirus.
Governors say their decisions not to impose tighter restrictions are paying off with fewer business closings and more hiring reflected in strong jobless numbers. But economists say it's not that simple. While businesses struggling during the pandemic may benefit when governors choose not to require masks or limit indoor gatherings, other factors may play an even bigger role in producing such low unemployment rates.
And those same rules that could initially help states' economies are also being blamed for leading the nation in coronavirus infection rates, raising questions about whether their approach is sustainable. North Dakota and South Dakota have the most cases per capita in the US, with Nebraska and Iowa not far behind.
“If hospitalization and death rates go up, then you have an incentive for politicians to shut down the economy. That would be very lethal and push unemployment rates back up,” said Ernie Goss, an economist at Creighton University in Omaha.
For now, however, these Midwestern states have a lock on the top of the unemployment rankings, well below September's national average of 7.9 percent. Nebraska leads the nation with an unemployment rate of 3.5 percent, followed by South Dakota, Vermont, North Dakota, Iowa and Missouri.
Most Midwestern governors imposed some restrictions last spring, but were among the first to ease them, arguing they needed to balance efforts to slow the spread of the virus with the need for a strong economy.
“I have to think that if you shut down harder, you're going to see a more severe impact on your industries, and the longer you shut down, the harder it's going to be for those industries to recover,” Nebraska Gov. Pete Ricketts told The Associated Press.
Missouri Gov. Mike Parson, who tested positive for COVID-19 in September, has touted a balanced approach to dealing with the pandemic. And Iowa Gov. Kim Reynolds urged residents not to let the virus rule their lives.
In South Dakota, Governor Kristi Noem said, “There are consequences to what we've seen happen in other states — that closing businesses, disrupting people's lifestyles has some devastating effects. We take a very balanced approach.”
Instead, Vermont Gov. Phil Scott, a Republican, has worked aggressively to fight the virus, including closing some businesses in the spring and enforcing a mask mandate. Vermont now has one of the nation's lowest rates of COVID-19 infection along with the third lowest unemployment rate.
Like the Midwestern states, Vermont is largely rural with industries that were not as badly affected by the pandemic.
Economists say this is no coincidence, noting that states dominated by agriculture and some types of manufacturing have been able to operate closer to normal and have been able to recover more quickly. This contrasts with tourism-based states such as California, Nevada and Hawaii, which have the highest unemployment rates in the country.
“A rural state's economy is structured differently, so more people work in industries that wouldn't really be disrupted by the need for social distancing like agriculture,” said Eric Thompson, who heads the Office of Business Research at the University of Nebraska-Lincoln.
Midwestern states already had extremely low unemployment rates before the pandemic and benefited early from a lack of population density, with lots of open space and few large cities where it would be harder to avoid contracting the virus. More recently, however, many of these rural areas have seen some of the highest virus rates in the country.
Even in industries like meatpacking that were initially devastated by workers infected by COVID-19, companies have been able to make changes that have allowed operations to return to near-normal.
Thompson said the lack of restrictions may have been more important in the spring. At the height of the shutdown in April, Nebraska's unemployment rate peaked at 8.7 percent, which was slightly more than half the national rate of 14.7 percent at the time.
Nathan Kauffman, an executive at the Omaha branch of the Federal Reserve Bank of Kansas City, said fewer businesses closed in those states because many of them are in industries considered essential.
Ricketts agreed that Nebraska's mix of industries has played an important role in helping the state's economy.
“The things we are strong in are agriculture, manufacturing, finance and technology. Once you have industries that are not going to be affected as much by a pandemic,” Ricketts said.
But even if business has remained better in these states, that doesn't mean they've been spared entirely. Restaurants, hotels and other types of businesses are still struggling as people remain cautious about resuming their normal shopping, and that financial cost could rise amid spikes in virus rates.
Despite low unemployment rates, all states now have fewer jobs than before the pandemic hit. Nationally, the economy has recovered only about half of the 22 million jobs lost.
But many Midwestern business owners and leaders say they appreciate the lighter touch of their governors.
In Rapid City, South Dakota, Black Hills Bagels never had to close because the wholesale side of its operation continued to provide products to grocers and its store turned to carryout and delivery options, owner Debra Jensen said. It even had trouble hiring the workers it needed this year because unemployment remained so low.
“I'm just happy that the state and the people in South Dakota made the right decisions to make sure our economy doesn't come to an end,” Jensen said.
Arik Spencer, president and CEO of the North Dakota Chamber of Commerce, said he doesn't think shutting down the economy is the right approach, but every state is trying to help the economy while managing the virus.
“We hope that with the thoughtful approach of decision makers here in North Dakota, we are poised to recover quickly. But if there was a silver bullet for recovery, every state in the country would be using it right now,” Spencer said.