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Florida, Nevada may be hit hardest by coronavirus economic shock: study – National Post

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WASHINGTON — Florida beaches remained packed with partying college students as the coronavirus crisis gathered force, and the Republican governor was slow to impose social distancing in a tourist-dependent economy.

That may come back to haunt the U.S. state – and not just in the form of a sky-rocketing case load. According to a newly released study by Oxford Economics, Florida is among the states most vulnerable to the economic shock being caused by the pandemic. (https://reut.rs/34cmzs3)

Oxford ranked the 50 U.S states and Washington D.C. using 10 measures its economists felt could make a local economy more vulnerable, including the share of the population over 65, dependence on retail sales, and the importance of the tourist industry.

Maine, with its proportionately older population and comparatively large number of people who are self-employed or work in small businesses, is considered the most vulnerable state economy, according to Oxford. Nevada, with its massive casino-based tourism industry, was second, while rural Vermont was third.

Florida is the only heavily populated state near the top of the list, with a comparatively large share of its 21 million residents over the age of 65, and an economy that is relatively dependent on retail sales and tourism.

The state’s COVID-19 case load topped 10,000 last week and it is adding a thousand cases a day. Governor Ron DeSantis imposed a statewide “stay at home” order that took effect Friday, weeks after some U.S. states.

“We see what’s going on in New York now, we see that people are dying,” Rick Scott, the Florida senator, told Fox News Channel on Saturday. “People are taking this very seriously now.”

States such as New York and California that have so far had the heaviest COVID-19 case loads may actually be among the more economically resilient, the Oxford team found.

“Lockdown and containment measures are the key determinants of first-round economic impacts of the coronavirus, but structural economic vulnerabilities determine the severity of second-round impacts,” Oxford lead economist Oren Klachkin wrote. Long-term results could depend on the strength of local government budgets and health systems.

Economists are struggling to get a grip on the potential aftermath of the crisis as it continues to deepen. Companies cut more than 700,000 jobs from their payrolls in March, a likely understated measure of rapidly rising unemployment: More than 6 million people filed for unemployment benefits in the week ended March 28 alone.

President Donald Trump initially downplayed the dangers of the virus and did not quickly recommend nationwide health orders. Local governments, which vary widely in their finances and ability to cope, had different initial responses to the threat, a fact that could shape the ultimate outcome of the crisis nationally.

The situation has produced a quick flowering of research on pandemic economics, with most studies finding that stricter health measures taken early on lead to deeper, but shorter, economic downturns and faster recoveries.

There are political as well as economic implications.

Florida, for example, is an important battleground state in the U.S. electoral system, and the perceived success or failure of efforts to control the virus and support local businesses and households could influence Trump’s reelection chances.

IHS Markit U.S. regional economist Karl Kuykendall also ranked Florida among the more vulnerable states, using a different methodology focused on estimated declines in employment and economic output. The state may lose about 8% of its jobs by the end of the year, he calculated.

The manufacturing heavy “rust belt” states from Pennsylvania to Michigan, also politically important constituencies that swung the 2016 race for Trump, are in line to take similarly heavy hits to employment, Kuykendall estimated.

Personal finance site WalletHub.com used a broader set of metrics, including work from home capacity and local financial strength, for another ranking.

Florida is in the middle of that pack because of its comparatively few small businesses and stronger state finances, WalletHub found. It said Louisiana was most “exposed,” with Maine and Nevada also high on the list. Among the more populous states, Pennsylvania and Illinois were in WalletHub’s top 10.

None of the studies accounted for the help coming to households, businesses and local governments from the $2.3 trillion emergency rescue package approved by Congress in late March, or the wide set of programs established by the Federal Reserve.

The combined aim of those efforts is to offset the economic impact of the virus. Officials are focused now on whether the aid can reach where it is needed fast enough to matter.

(Reporting by Howard Schneider: Editing by Heather Timmons and Daniel Wallis)

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Canada can hit climate targets without ruining economy, economists and climate experts say – CBC.ca

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Last November, the United Nations Environment Program released its annual Emissions Gap Report, which found that in order to limit global warming to 1.5 C above pre-industrial levels, CO2 emissions would need to drop by 7.6 per cent annually over the next decade. 

Given that worldwide emissions are estimated to have risen by about 0.4 per cent in 2019, this seemed like an unattainable goal.

A recent study published in Nature Climate Change, however, suggests that as a result of global shutdowns due to the COVID-19 pandemic, emissions in 2020 could drop by roughly seven per cent.

At first glance, it might appear as though a devastating economic shutdown is the only way to reach those UN targets. But some experts say this isn’t the case, and insist there is a way to have economic growth and reduce emissions that adhere to the UN guidelines.

Storefronts in Ottawa’s Glebe neighbourhood are reflected in a window sign on March 24, 2020, during the COVID-19 pandemic. (Justin Tang/The Canadian Press)

“We can’t have this [kind of a shutdown] for tackling climate change — absolutely not,” said Corinne Le Quéré, a Canadian professor of climate change science at the University of East Anglia and lead author of the Nature study. “This is a really painful way to get a decrease in emissions.” She also noted that it likely won’t last.

Don Drummond, an economist who worked for the federal Department of Finance for 23 years, pointed out that emissions in Canada have almost flat-lined, on average, over the past few years during a period of economic growth (prior to the coronavirus pandemic).

This, he said, is evidence that reducing emissions to UN guidelines is possible.

“We’ve achieved higher growth with flattening emissions and we can and should go further and achieve positive growth with declining emissions,” said Drummond, an adjunct professor at Queen’s University and former chief economist at the Toronto-Dominion Bank. “That can be done, but we need a more concentrated policy effort.”

New opportunities

Drummond, who was one of the architects of the Goods and Services Tax in 1991, said there is a long history in Canada of scare-mongering that a given new policy will kill the economy, from the GST to the North American Free Trade Agreement. Quite often, it doesn’t.

Many governments around the world are trying to stimulate their economies during the pandemic, and this could be an opportunity to funnel money into green technologies, said Le Quéré.

There’s been an increase in the popularity of e-bikes, a green alternative to getting around cities. (Francois Mori/Associated Press)

She said that one of the key findings of the Nature study was that the biggest drop in emissions during the pandemic, behind the aviation industry, has been in surface transport. This, she said, could be one sector governments could target.

“The biggest reason why the emissions [went] down now is mobility. So we just don’t go anywhere. We don’t use our cars. Governments could say, ‘Well, we’re going to tackle that as we get out of confinement,'” Le Quéré said. That could “include everything from encouraging home-working for those who want to and who can, then developing infrastructure for … walking or cycling.”

While Drummond believes the federal government is likely to invest in methods to reduce emissions, he said it will likely be a long time — perhaps years — before we see stimulus packages aimed at revitalizing the economy, such as specific jobs programs.

In the meantime, he said the government can use other means to reach the 7.6 per cent emissions-reduction goal, such as disincentives — like the carbon tax on things like gasoline and heating fuels — which can be effective in bringing down emissions, particularly when that money is recycled back to people and businesses, as the federal government is doing.

“If you have the right incentives or the right disincentives in place, there can be growth that takes place that is not environmentally damaging,” Drummond said. 

“I would say put a price on it … that’s what it really comes down to.”

Another could be investing in retrofitting buildings to make them more efficient, which would be very labour-intensive and could create more jobs. But Drummond said that would be “second best.”

On the path

Mark Jaccard, a professor of sustainability energy at Simon Fraser University, said transitioning to renewable energy isn’t as costly as some may think it is.

He said it would cost “at most, two years of economic growth spread over a 30-year period.” (In recent years, Canada has experienced annual growth in the 1.5 to 1.9 per cent range.)

Jaccard, who is currently working on the next IPCC report, said that this small sacrifice over an extended period of time is far better than the alternative.

Flood waters breach the Gatineau River and flood the neighbourhood in Gatineau, Que., in May 2017. More extreme weather is one consequence of climate change. (Sean Kilpatrick/CP)

“It’s a slight difference in economic output over a 30-year period in order to prevent the dramatic crashing in your economy because of wildfires, acidified oceans, rising seas, major storms and pandemics that can happen from climate change,” he said.

Drummond agrees, noting that concerns about emissions reductions harming the economy will likely always be around, even if they are without merit.

Canada is already on the right path, he said, and the country can ramp up its efforts to see both economic growth and a notable reduction in emissions.

“It’s not like we’re asking to do something that’s never been done before. We are doing it right now, we’re just not doing it enough,” he said. “If you asked me to move a three-tonne rock, if I can move it an inch, I’m pretty sure I can move it a foot.”

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Trudeau to offer premiers billions to help reopen the economy safely – EverythingGP

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Trudeau is offering to transfer the money to provincial and territorial governments, provided they agree to spend it on a number of areas the federal government considers necessary to reduce the risk of a second surge of the deadly coronavirus.

They include testing, contact tracing, personal protective equipment, bolstering municipalities, helping the most vulnerable Canadians and strengthening the health care system, possibly including improving conditions in long-term care homes linked to more than 80 per cent of the deaths in Canada so far.

Making a difference in just one of those areas — municipalities — is a pricey proposition. The Federation of Canadian Municipalities estimates communities across the country, which have been on the front lines of the pandemic, need $10-15 billion to make up for the loss of revenue resulting from reduced transit fares, user fees and deferred property taxes.

At the start of the pandemic, the federal government boosted transfer payments to provinces and territories for health care by $500 million — an amount that seemed large at the time but which has since paled in comparison with the more than $150 billion Ottawa has shovelled into direct financial aid to Canadians and economic stimulus measures.

While Trudeau is now offering provinces and territories substantially more money, there is likely to be some push back from some premiers over his attempt to direct the general areas on which it should be spent rather than letting them spend it as they see fit.

The prime minister is also expected to announce financial support for nearly four million disabled Canadians, who already faced some of the highest costs of living before the pandemic made daily life even more expensive.

Among other things, the pandemic has resulted in many people with disabilities having to rely on in-home care, pay delivery fees for groceries and other items, and fork out higher dispensing fees for prescription drugs.

This report by The Canadian Press was first published June 5, 2020.

The Canadian Press

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Trudeau to offer premiers billions to help reopen the economy safely – CP24 Toronto's Breaking News

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OTTAWA – Prime Minister Justin Trudeau is to offer premiers billions in federal funding to help them safely reopen provincial and territorial economies without triggering an explosive second wave of COVID-19 cases.

Trudeau is expected to present the offer to premiers during their weekly conference call today — the twelfth such call since the pandemic sent the country into lockdown in mid-March.

Precise details, including how to allocate each province’s share of the cash, are to be negotiated in the coming days, but federal officials hope agreements can be reached quickly to get the money flowing fast.

The offer comes with some strings attached, according to federal officials who spoke on condition of anonymity because they were not authorized to discuss it publicly.

Trudeau is offering to transfer the money to provincial and territorial governments, provided they agree to spend it on a number of areas the federal government considers necessary to reduce the risk of a second surge of the deadly coronavirus.

They include testing, contact tracing, personal protective equipment, bolstering municipalities, helping the most vulnerable Canadians and strengthening the health care system, possibly including improving conditions in long-term care homes linked to more than 80 per cent of the deaths in Canada so far.

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