I’ve read a couple of analyses today that start with the fact that the Boston metro area has an annual GDP of about $326 billion and then leap to the conclusion that shutting it down for a day could therefore cost about a billion dollars. That’s silly.
Look at it on the income side. If you’re a salaried worker, this has zero impact on your income. Investment and rental income? Zero impact. Hourly wage income? Maybe. But we’re not looking at $326 billion divided 365 days in a year. We’re looking, at maximum, at a lost day of income from hourly wage earners. But even that’s an overestimate. The Boston-Cambridge-Quincy MSA includes all of Rockinham County and Strafford County in New Hampshire. It extends south into Plymouth County in Massachusetts. So we’re talking about a fraction of the MSA losing a fraction of a day’s worth of income. And that’s assuming that 100 percent of the employers whose hourly employees are impacted choose to act like jerks about this.
Then if you look at it on the expenditure side, you’ll see that even that’s an overestimate. There are probably some people who would have gone to the movies today if not for the manhunt. Some large fraction of those people will go see that same movie some other time. Ditto for people with plans to meet friends for dinner. With some of the expenditures displaced in time, probably some of the hourly wage work will also be displaced. Nobody really knows what the total economic impact will be, but it’ll be way way less than $1 billion.