Editorial: To rebuild our economy, we can’t just reopen

On Friday, businesses in the city of Richmond, Accomack County and Northern Virginia entered the long-awaited Phase One reopening period.

Some key beneficiaries of eased COVID-19 restrictions are restaurants and breweries (outdoor dining, 50% capacity); places of worship (indoor gatherings, 50% capacity); retail stores deemed nonessential (50% capacity); barbershops and salons (visits by appointment); and gyms and fitness centers (outdoor classes).

We welcome their safe return. But Phase One guidelines can’t capture how each Virginia household is moving through COVID-19 at its own pace. Federal Reserve Bank of Richmond President and CEO Tom Barkin recently highlighted some areas that deserve the same attention as a socially-distant drink or a much-needed haircut.

There’s an income divide. A recent Federal Reserve Board survey found 39% of people earning less than $40,000 per year incurred job loss over the past two months, versus 13% of people making at least $100,000 per year.

There’s an education divide. The Fed survey showed unemployment among people with less than a high school education is above 20%, versus 8% for people who have at least a bachelor’s degree.

There’s a spending divide. In May 2019, a study from NORC at the University of Chicago provided a snapshot of the financial habits of around 1,000 Americans. Half said missing one paycheck would spark hardship. In lieu of savings, credit cards (47%) and payday loans (17%) were floated as alternatives.

There’s a flexibility divide. The Fed survey found 63% of college degree holders have jobs with telework options. Only 23% of people with a high school diploma or less have such benefits.

And there’s a behavioral divide. Households with less money, less education and fewer work-from-home options are more likely to resume normal economic activity at a quicker clip. Barkin notes families living paycheck to paycheck historically use their stimulus checks right away.

If families live in an area without broadband or a lower volume of COVID-19 cases, they might have more reason to enter stores to make purchases. And people who have been going out to work since the start of the pandemic might be less worried about being in the presence of others.

“Higher-income households are cautious and can afford to be,” Barkin added.

In rebuilding our economy, we can’t just reopen. We have to learn from recent vulnerabilities and create opportunities in new — and existing — industries. Who can — or wants — to be a customer will greatly vary until a better public health solution is found.

Source: www.dailyprogress.com