We are now six months into an economic downturn of historic proportions. To provide national perspective, we invited Tom Barkin, President of the Federal Reserve Bank of Richmond, to the August meeting of the Golden LEAF Board of Directors. I’d like to share some of the key takeaways from his presentation and what they mean for Golden LEAF:
The national economy is both real and surreal.
While national unemployment is currently at 10.2 percent, down from 14.7 percent in April 2020, retail spending on goods like cars, houses, and clothing is back to normal spending levels. Yet this does not mean we are in recovery. The economy would likely be much worse off overall without federal stimulus payments and enhanced unemployment providing direct support to individuals and families. There continues to be a decline in spending in more high-touch service areas like entertainment and restaurants, consistent with current COVID-19 precautions and closures.
Although unemployment is high, the jobs market is still suffering.
Many employers are having trouble finding qualified workers due to lower labor force participation and available labor lacking the skills necessary for manufacturing, trades, or other open positions. With fewer options for safe care, more people are choosing to leave the workforce to stay at home with children or older parents. Available labor, including workers who lost jobs in the service industry, will need training in order to meet the demand from employers for skilled labor.
Available workers will need training to meet the needs of employers.
Golden LEAF works with nonprofits and North Carolina’s community colleges to close the skills gap in high demand fields through workforce training and education programs that meet the needs of local employers for specific job openings. For example, at the August meeting, the Golden LEAF Board approved funding for Martin Community College’s Apprentice Line Technician Academy to help meet the needs of local and regional energy providers.
To make these education and workforce programs even more attainable, Golden LEAF provides scholarships for rural students to attend the state’s community colleges, with funds specifically reserved for students in occupational programs. In April, the Golden LEAF provided $500,000 to participating community colleges to support students affected by the pandemic. Golden LEAF has increased its funding for curriculum programs to $2,250 per year and occupational programs to $1,000 per year beginning this Fall 2020.
Small business defaults are up, but not what you would normally expect during a recession of this magnitude.
The Paycheck Protection Program (PPP), Small Business Administration Economic Injury Disaster Loans, state and local loan programs as well as low interest rates have helped many businesses remain open. Businesses are still facing uncertainty, although many have taken the entrepreneurial approach and pivoted operations to meet market demands or made other changes to help keep operations going.
In Brevard, SylvanSport, a camping equipment manufacturer, is now making face shields for first responders and hospitals throughout western North Carolina. SylvanSport is also manufacturing foot-operated door openers, surgical masks, Tyvek suits, and sneeze shields needed by businesses and educational entities. In Boone, Watauga Opportunities Inc. is supporting efforts to administer COVID-19 testing by assembling and packaging the sample collection vials used in COVID-19 test kits and lab testing.
Telehealth is helping most healthcare providers continue to provide access to quality care during this crisis. Because the Martin-Tyrrell-Washington District Health Department’s behavioral health office was already set up for telepsychiatry, the department was ready to switch all its services to telehealth when the COVID-19 pandemic reached North Carolina.
In March, Golden LEAF launched the NC COVID-19 Rapid Recovery Loan Program. To-date, more than 996 Rapid Recovery loans, totaling more than $35 million, have helped retain 6,362 jobs. New loans are still available for small-business owners and family farms, and the application can be found on the NC COVID-19 Rapid Recovery website. Applicants can contact [email protected] to connect with technical assistance to complete the loan application.
Will we see growth in smaller towns?
The real estate market is up. Remote work is prevalent. Large towns are more at risk for community spread. And the charm and beauty of our smaller towns have always been a big selling point. Many of our smaller towns may benefit from these unique circumstances, especially those with the right infrastructure in place.
While many are suffering and this pandemic is not going away overnight, there is hope.
Golden LEAF will remain laser focused on its mission of long-term economic advancement, especially in rural, tobacco-dependent and economically distressed areas. We will continue to build our economy by focusing on workforce preparedness and education, economic investment and job creation, agriculture, and community vitality. And we will remain a strategic partner in providing critical funding to help our communities recover from economic disasters.