Economic Reality: This Is Going To Hurt
Businesses in the Cape Fear Region are facing an uncertain future, with many closing temporarily and some that may never recover. The U.S. Senate is racing to pass a trillion-plus dollar economic aid package. It is likely to include direct aid to individuals, and to small businesses in the form of long term no-interest loans to be paid back starting in 2021.
The economy is hurting. And no one knows how long the pain might last. Daniel Soques is an economist at UNCW.
“It's kind of a weird recession in essence. I think most people would call it now and you know, there's going to be a recession, say almost all macro forecasts that have come out in the past week. It’s just a matter of, we saw it, we see it on the horizon now, so we can see the clouds getting darker before, which usually doesn't happen.”
He says the state is on the right track, but needs to do more.
“So from the policy perspective, I think the state's been making the right moves in terms of social distancing. It's a weird problem because we basically need to hurt the economy in the short run in order to have these long run benefits of coming back to normal. But yes, I think on the fiscal policy side, both of the federal and state level, they need to do more. Most of those macro economists are calling for huge increases in spending, particularly ones that are targeted at these, individuals that are going to lose their jobs.”
He expects unemployment figures to climb quickly.
“Initial jobless claims came out this morning. It ticked up a little bit. We'll see those numbers start to skyrocket probably next week as, initial jobless claims, people start filing for unemployment insurance on a huge scale. Particularly restaurant workers, hospitality workers, and for Wilmington, New Hanover County, what's going to be a considerably large portion of our employers.”
Downtown Wilmington is unusually quiet. Ed Wolverton is in his office as a few cars slowly drive by his window. He’s the President of Wilmington Downtown Inc.
“It's a really tough time for everybody. There's just so much uncertainty as well. How long is this going to last? Are more measures coming down the pike and trying to figure out how to proceed is difficult for many people, but especially our small business owners.”
Wolverton is encouraged by this week’s federal legislation, to support individuals and businesses hit by the economic downtown – a downturn which is expected to get far worse.
“The notion of trying to get money to people quickly is a big element of all the plans that are being formulated now. And yet those seem to be a little bit more individualized. Well, it might go to an individual, but how does it affect a small business? One particular issue for local businesses, especially small businesses, is that when someone does claim unemployment, that business has to help pay for that. And that would also count towards the businesses calculation for next year. So the Governor waved that, along with some other things like being an unemployed for a week, having to do an active search while unemployed. So there were a couple of provisions that were immediately changed that will have some help, for both small businesses and people that are losing their jobs because of the shutdown.”
Wilmington Chamber of Commerce President and CEO Natalie English says she and her team are ready to help local businesses with their questions and concerns during the crisis, and to guide them to the resources they need.
“I believe that are state and federal government and I would include our local government are doing everything within their power to date, to sort of ease the bleed, if you will. And a help the business community weather this, this crisis, understanding that people who have jobs are directly connected to businesses and so it is not simply to make sure individuals have the ability to put food on their table and keep a roof over their heads. It's also critical hold that we keep businesses open so that whether, uh, an individual, it's currently safely employed or temporarily laid off when we come out of this crisis, if our businesses are not able to stay open and those jobs aren't available at the end of the crisis.”
English encourages everyone who is doing their shopping online, to first try and use local businesses if they offer that option, rather than the large national websites.
Vince Winkel, WHQR News.