When will life get back to “normal?”
It’s the question many are asking as shelter-in-place orders have been extended around the country amid the COVID-19 pandemic. While leaders in Memphis and Shelby County are working to mitigate the local spread of the virus, they’re also discussing ways to revive one of the pandemics’ biggest bystanders – the economy.
“When it’s time to lift our safer-at-home order we want to make sure that we are ready to get our economy back up and running, but we don’t know when that time will be just yet,” Mayor Jim Strickland said during Wednesday’s COVID-19 joint task force briefing.
Already riddled with high poverty rates, how will Memphis and Shelby County bounce back from the economic blow that has resulted in surging unemployment rates?
As of Monday, Tennessee officials reported dealing with 250,000-plus unemployment claims across the state.
Strickland, Shelby County Mayor Lee Harris and other mayors statewide have been in talks with Tennessee Gov. Bill Lee regarding the logistics of restarting local economies.
Lee, who on Wednesday ordered school buildings closed for the rest of the academic year, earlier announced the formation of the state’s Economic Recovery Group to work on a plan to potentially allow Tennesseans to get back to work in May.
“It’s clear the economy cannot shut down for months on end,” Mayor Harris said. “But you will probably see a phased-in approach.”
President Donald Trump and his administration recently revealed the launch of a draft plan that calls for a step-by-step approach to the reopening of the country. The plan, obtained by the Washington Post, does not give firm dates for re-openings but says some areas with less virus transmission could go first, starting “not before May 1.”
Ultimately, the decision to reopen locally will be based upon the input from multiple levels of local, state and national political, business and health officials.
Strickland has said that there will need to be at least 1,000 people tested daily in the city to effectively gauge the effects of the virus. As of Tuesday (April 14), 15,082 residents had been tested, according to the Shelby County Health Department, with 31 deaths.
Meanwhile, initiatives have been unveiled to help mitigate the coronavirus’ slamming of the local economy. Monday the city announced two micro-loan programs to provide some relief to local business owners. The loans range from $5,000 to $35,000.
The Economic Development Growth Engine of Memphis & Shelby County (EDGE) has crafted a grant assistance program, Neighborhood Emergency Economic Development (NEED), that is intended to help small locally-owned companies in mainly distressed areas. EDGE also plans to launch an additional program geared specifically towards recovery for these same type businesses.
“We recognize that when the emergency is finally lifted, companies will need assistance to help them during recovery,” said Reid Dulberger, president and CEO of EDGE. “Many of our local small businesses won’t survive and unless we can help them collectively. it may take a generation to rebuild.”
Dulberger said it’s difficult to pinpoint the steps of recovery for one main reason.
“No one’s crystal ball will be totally precise on this because we don’t know the extent of the health outcomes,” he said. “One thing is for sure. We will be in a global recession and recovery will likely be slow, greatly affecting smaller companies.”
Economic effects on non-business owners
Elena Delavega, a poverty expert and associate professor at the University of Memphis, sees the poor being plagued by the effects of the pandemic long after restrictions are lifted.
“I expect unemployment to remain high for a while and the economy to be depressed for a long time after this is all over,” she said.
Shelby County’s poverty rate is 21.7 percent; the city’s 27.8. Delavega, who co-authors the annual “Poverty Fact Sheet,” expects those rates to almost triple.
“I’m thinking it will be about 60 percent – and that may be too optimistic,” she said. “The virus does not distinguish between rich or poor, black or white; but the impact of it will disproportionately affect the poor, many of who are African Americans.”
Almost 31 percent of African Americans living in Shelby County do so in poverty. In Memphis, the poverty rate for African American is 33.8 percent.
Delavega particularly is concerned about the pandemic’s effect on children and education. Shelby County Schools closed for Spring Break. With Lee’s order on Wednesday, school building are to be closed for the rest of the academic year.
“What you have is a group of children who will be at a disadvantage when this is over. And I find it hard to believe that they will catch up. …This affects poverty in the long term,” she said.
“This will come down to what the leadership does to support the community” she added. “In Memphis, we have an opportunity to bounce back quicker, if businesses really take care of workers by increasing wages to $15 an hour and providing employee benefits.”
Delavega suggests city and county leaders look at “reinventing the system.”
“We can’t go back to the way it was after this pandemic,” she said. “We should look at the points where the system has failed people living in poverty and do something about changing it. That’s the only way we will recover.”
With talks of reopening underway, Strickland repeatedly has said a definitive date is still unknown and that “the city wants to be prepared.”
A local economic recovery group, consisting of area politicians and business leaders, is being formed, he said. That group is set to meet for the first time on Thursday (April 16).