Commentary, NC Budget and Tax Center

COVID-19 damage will worsen and linger without quick, robust policies from state leaders

The speed and strength of our economic recovery from COVID-19 will depend on the timeliness and inclusivity of our state’s policy response.

If we wait to deploy dollars and connect more people and businesses to the necessary supports for health, housing, and income, North Carolina’s recovery will take longer. It will also result in costly long-term damage to the wealth, stability, and health of our neighbors. As researchers at the New York Fed have found the importance of timely and adequate early policy interventions during a public health crisis can make a significant difference in the trajectory of a community’s  recovery.

Already, the Congressional Budget Office is projecting that unemployment rates will remain as high in 2021 as they were during the highest points in the Great Recession — 10%.

Nationally, the scope of need is staggering and unlike any economic event in modern history.

Yesterday, 100 county snapshots for North Carolina were released to show the barriers that persisted through the last economic expansion for too many communities and people in our state. This data — along with emerging measures of need in light of COVID-19 — should signal the urgency of a robust response that seeks to secure recovery for everyone and all communities.

It’s worth repeating: Quick deployment of dollars and policies to minimize the harm to people will strengthen the state’s recovery and ensure that the new rules of the game better support our collective well-being.

The needs are stark and make clear the wide-reaching effects of the virus on every person. For example, there have been nearly 15,000 confirmed cases of COVID-19 and more than 500 deaths in North Carolina since the start of the pandemic, adding to the already high numbers of people without health insurance.

With reopening underway and people returning to their jobs, too many workers are at greater risk for infection because protections are not in place. Personal protective equipment is available at varying levels, with just 31 days’ worth of supply for N95 masks and no gowns.

And since our last economic expansion kept too many people living paycheck to paycheck, many families are struggling even more now to meet basic needs. Food and housing insecurity were already high before COVID-19, and evidence of missed meals and missed rent payments is mounting.

North Carolina also needs to address the need for public infrastructure and staff to deliver services. There are fewer state and local employees to serve the needs of our growing state than we would have if we had the same staffing levels as pre-recession. There are public programs running on antiquated technology; too many households lack broadband access so they can connect to a new mode of public service delivery.

For those small businesses that have been hit hard by losses in consumer demand and had to close temporarily or are at risk of closing permanently, the support to cover their fixed costs and help them shift to new ways of delivering their products is critical. North Carolina also needs to fix the state’s unemployment insurance for those workers who have lost hours, wages and work, and for whom the same job might not be coming back.

Our investments today can address these needs and strengthen our recovery.

Absent a timely, robust policy effort, the damage of COVID-19 will only deepen and linger. We know that when people lack health insurance, they are more likely to delay health care, develop chronic conditions and incur medical debt when they do seek treatment. When people lack stable housing, they are more likely to live in substandard homes or move often. Frequent moves disrupt children’s education and create neighborhood instability.

While COVID-19 impacts everyone, not everyone has been affected equally. People with relative access to wealth have been insulated from some of the most threatening aspects of the disease and resulting economic fallout. Our policy responses should center the needs of people who have been under-served for decades and, as a result, who will be hardest hit by the current pandemic.

Providing sustained support to those who need it most now will help prevent even more costly outcomes down the line.

Alexandra Sirota is the director of the N.C. Budget & Tax Center.

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