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Rural area needs more help fighting pandemic

New COVID-19 infections have shifted increasingly to rural areas, leading some local and state governments to re-impose businesses restrictions. But without more federal aid, many rural areas will have a much harder time recovering from a second shutdown, and that could help trigger a “prolonged, deep recession,” senior economist Olugbenga Ajilore writes for the Center for American Progress.

Many studies say the pandemic could cause extra harm to rural areas’ economies and health, since they tend to have older and sicker residents, poorer infrastructure, and less access to health care. Local governments are likely to suffer disproportionately, since many are still recovering from the Great Recession and don’t have the tax base many larger communities have — especially in areas with high minority populations. “State and local governments have been hit on both ends of their budgets by the increased costs of fighting the coronavirus and the decreased revenue resulting from lower individual and business incomes and a drop in retail sales,” Ajilore reports.

The Coronavirus Aid, Relief and Economic Security Act gave $1,200 direct payments to households in April and expanded unemployment insurance, and that boosted spending and business revenues, especially in Southern rural communities. But though the percentage of small businesses that were open rose in May and early June, the number tanked by the end of June along with small-business revenues. That trend coincided with the rural spike in COVID-19 cases, Ajilore reports.

“In order to get the United States on the trajectory for economic recovery, policymakers need to ensure that states have adequate testing capacity and contact tracing programs in place in order to bring transmission of the virus down to a controllable level,” Ajilore writes. “Policymakers also need to provide substantial relief to state and local governments. Finally, policymakers need to extend unemployment insurance and deliver relief to households in the form of direct checks for as long as this public health crisis lasts.”

Source: The University of Kentucky Institute for Rural Journalism and Community Issues

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