coronavirus

COVID’s unique economic impact evident in employment data

Last week not only marked the anniversary of the COVID-19 pandemic, but also the release of updated employment data from the U.S. Bureau of Labor Statistics (BLS). The monthly data shows that the pandemic had a very unusual effect on workers, experienced both as a uniquely-chaotic period of labor force participation, but also as an unprecedented immediate drop in employment. The graphic captures just how chaotic the last year has been.

$1.9 trillion American Rescue Plan Act boosts help for innovation

The American Rescue Plan Act, a $1.9 trillion spending package to address the ongoing health and economic impacts of COVID-19, was signed into law today. The legislation includes several initiatives that could strengthen regional innovation economies. Most notable among these is the $10 billion State Small Business Credit Initiative (SSBCI), $3 billion for the Economic Development Administration (EDA), and $350 billion for state and local government relief.

SSBCI Reauthorization

Congress reveals COVID bill with $10 billion SSBCI

The U.S. House of Representatives is working through the coronavirus relief package in committee markups this week, and there are several provisions that could have a significant impact for regional innovation economies. The highest-profile of these is $10 billion for a new State Small Business Credit Initiative (SSBCI) program. Reauthorizing this program has been a top priority for SSTI's Innovation Advocacy Council, as SSBCI was one of the federal government’s only sources of funding for equity investments in the past two decades.

Innovation proposals in Biden's COVID plan would provide emergency, long-term assistance

Last week, the incoming Biden administration announced an “American Rescue Plan” to address immediate health and economic threats from COVID-19. On the economic side, the plan goes further than immediate relief and begins to address some longer-term strength and resilience concerns. Among other provisions, it would provide $35 billion for a new business finance program that support venture capital, $350 billion for state and local governments to help address budget shortfalls, $35 billion for higher education and $3 billion for the Economic Development Administration.

Newest COVID relief package provides some aid; short on true relief for states

The relief bill passed last night falls short of assisting states that face strains on their budgets and increasing demand for assistance from their constituents. However, the bill does provide $900 billion for the first broad COVID-19 relief package to pass since the CARES Act was signed into law on March 27th. The major items in this legislation are the extension of unemployment insurance benefits, direct payments to individuals, and a new round of loans through a modified Paycheck Protection Program.

Targeted policies to mitigate economic effects of COVID-19 show most promise

COVID-19 could affect 3.1 percent of private sector jobs due to business failure among small and medium-size enterprises (SMEs) in 17 different countries (not the U.S.), according to a new working paper from the Federal Reserve Bank of Atlanta. Findings also revealed that the fiscal cost of an intervention that narrowly targets at-risk firms can be modest (0.54 percent of GDP), while non-targeted subsidies can be substantially more expensive (1.82 percent of GDP) to achieve the same level of effectiveness.

Women’s progress could be setback decades due to pandemic fallout

As the pandemic turned workplaces upside down, women in particular have been negatively impacted. Women, especially women of color, are more likely to have been laid off or furloughed and the supports that working women relied on, namely school and child care, have been upended.

States finding creative uses for CARES money to speed and sustain recovery

As the shock of the first wave of the coronavirus pandemic settled and the extent of the economic impact began to become clearer, states are developing creative and long-term plans and programs to breathe life back into their economies. States initially focused federal funds from the Coronavirus Aid, Relief and Economic Security (CARES) Act towards the urgent public health needs of responding to the unfolding crisis and to mitigating the impacts of mandatory business closures. Commerce has gradually resumed, yet unemployment remains high, job creation slow, and states face continued revenue shortfalls months after the outbreak. States are increasingly using novel and impactful ways to leverage CARES Act funding to speed the recovery, and to fortify their economies in a persistent environment of uncertainty over the virus.

COVID-19 magnifying economic inequality

COVID-19 is not just wreaking havoc across the national and global economies but is specifically causing that damage in a way that widens the existing fault lines between the “haves” and “have-nots.” Further, as countries and companies contemplate the possibility of managing operations alongside the new coronavirus, rather than an entirely “post-COVID” society, there is little reason to believe the worsening economic inequality will mend without specific intervention. The problem will not be easy to solve.

Clearer picture emerges of pandemic’s toll on small businesses, nonprofits

The longer the pandemic lasts, the greater the jeopardy to many small businesses. A recent report from McKinsey & Company finds that the sectors most affected by the coronavirus and the least financially resilient include 1.7 million small businesses, employ 20 million workers, and earn 12 percent of U.S. business revenue.

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