Fed’s Bostic: Recovery Must Be Shared Across Income And Racial Groups So People Who Put Themselves At Risk Are Not Just Discarded On The Other Side
The pace and shape of U.S. economic recovery will vary across the country and will depend mainly on stabilizing the infection rate, Atlanta Federal Reserve President Raphael Bostic said on Tuesday during a webinar.
About half of all U.S. states have partially lifted coronavirus shutdowns in an attempt to reopen their economies, inviting the 95-percent-plus Americans under stay-at-home orders to venture out despite rising infections in some areas.
Don’t expect a V-shaped recovery — one where the economy suffers a sharp economic decline but recovers quickly and strongly.
“In many communities, the ‘V’ recovery is going to be very difficult to achieve,” Bostic said, according to a Reuters report. “But across the country there has been a fair amount of diversity of experiences, diversity of vulnerability, and that will translate into diversity of recoveries.”
Georgia, one of the first states to reopen businesses, has seen a spike in coronavirus cases. New infections continue to climb by the hundreds daily in metro Atlanta, where Mayor Keisha Lance Bottoms clashed with Republican Gov. Brian Kemp over ending lockdown restrictions too soon.
Black people make up 30 percent of the Georgia population but about 50 percent of the state’s coronavirus deaths.
“This could be catastrophic,” Lance Bottoms said.
Consumers apparently have more faith the U.S. will rebound quickly from the coronavirus pandemic than economists. Consumers think the economy will be significantly improved six months from now, according to the two longest running surveys of consumer confidence compiled by the Conference Board and University of Michigan, Marketwatch reported.
The Conference Board’s index of future expectations improved from 86.8 in March to 93.8 in April.
In the economic recovery, the Fed’s Bostic said there should be a focus on making sure any recovery is broadly shared across income and racial groups, since those with low incomes made up a disproportionate number of essential workers.
“Many of the essential jobs are low-paying jobs,” Bostic said. “We’re going to have to collectively think about how do we make sure that the people who have put themselves at risk through this are not just discarded once we get to the other side.”
Asked about whether the Paycheck Protection Program had adequately served Black-owned and minority businesses, Bostic said that the federal program to help small businesses was designed by Congress with an emphasis on speed, Reuters reported.
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About 90 percent of Black-owned businesses were shut out of the PPP program, the Center for Responsible Lending said on April 6. Meant to help small businesses keep their employees on the payroll, the PPP disproportionately favored larger white-owned businesses, according to research from the Brookings Institution.
The program is part of the CARES Act economic relief package that is now approaching $3 trillion. In addition touneven disbursement of funds, it has been criticized for technical glitches. Underserved communities who may have lacked prior relationships with the program’s lenders found access more difficult or impossible.
“I think there’s more to be done,” Bostic said, adding that this was a conversation for lawmakers in Congress.