COVID-19 affected NC’s rural economies long before the first confirmed cases arrived there - North Carolina Health News

By Liora Engel-Smith

In mid-March, the pandemic that now encompasses every county in the state seemed like a decidedly urban problem.

As of March 16, North Carolina’s 33 confirmed cases were concentrated in population centers: the Triangle, the greater Charlotte area and micro counties — areas with smaller cities.

But even without confirmed cases, rural counties weren’t immune from the economic implications of the virus as Gov. Roy Cooper moved to close restaurants and bars on March 17, N.C. Department of Commerce data shows. In some rural counties, the percentage of people filing for unemployment in March rivaled those in urban areas, a North Carolina Health News analysis shows.

Unemployment figures don’t exactly correspond to unemployment claims. Some unemployed people never file, others may not be eligible. But the figures provide a rough idea of the magnitude of the pandemic’s economic impact in rural North Carolina.

That first wave of claims came mostly from the service sector, including hotels, restaurants, retail shops, auto repair and the like, none of which are particularly dominant in most rural areas, said Jason Gray, senior fellow for research and policy at the NC Rural Center. Rural economies tend to be weaker and less diverse than their urban counterparts, so even small changes to unemployment can be detrimental.

Economic crises, virus-driven or otherwise, have far-reaching health implications. Research following the Great Recession of 2008 linked job loss to poorer overall health, an increase in suicide rates and even lower birth weights.

But in rural counties, where hospitals are already struggling to stay afloat, the numbers of people losing jobs, and insurance that came with those jobs, could make matters worse, said Brock Slabach, senior vice president of member services at the National Rural Health Association, a nonprofit advocacy and research group.

“Everything is connected,” he said. “I mean, this is like a suit coat where you start pulling on a thread and the whole thing can start coming apart.”

Added strain to fragile economies

Rural economies in North Carolina never fully recovered from the Great Recession, Gray said, but things were looking up right before the pandemic hit. Some rural parts of the state “were just beginning to get back on their feet,” he added.

But the current uncertainty, coupled with a large number of job losses has ground that progress to a halt.

For example, Avery County had a 3.95 percent unemployment rate before COVID-19, according to the U.S. Bureau of Labor Statistics. In March, 8.65 percent of people in the workforce filed unemployment claims.

Mitchell, the neighboring county, had a nearly 5 percent unemployment rate before the pandemic. By the end of March, roughly 7 percent of the workforce filed for unemployment, the state’s data shows.

The pandemic also prompted hospitals to suspend elective procedures for a time, resulting in April layoffs at Vidant Health and furloughs at several other systems across the state, including Scotland Health Care System, Wake Forest Baptist Health and Harnett Health.

“The March data is just the beginning of the horror story,” Gray said. “It’s the first half of a Stephen King novel.”

Data lags in uncertain times

More than two months since the first coronavirus case was detected in North Carolina, the pandemic seems to have amplified existing disparities in the state, from race to income and geography. But its full economic impact is still unknown, not only because the crisis is ongoing, but because real-time data by county is not yet available.

The state Department of Commerce released the March unemployment claims data last month but has yet to release official county-level unemployment rates. The department intends to release county-level data regularly, said Meihui Bodane, assistant secretary of policy, research and strategy at the department, the effort is ongoing.

Last week, the department released some April numbers, which tell an even grimmer story. North Carolina’s April unemployment rate was 12.2 percent, compared with 4.3 percent in March and 3.5 percent in February. By comparison, at the height of the Great Recession, North Carolina’s unemployment rate was 10.9 percent. Unsurprisingly, almost every county in the state had more people filing for unemployment in April than in March.

Some of North Carolina’s most impoverished rural counties, including Cherokee and Columbus, saw their unemployment claims double from March to April.

As the pandemic advances, Bodane said, data will likely reflect other hardships that could have a greater economic impact on rural areas, from furloughs and layoffs in manufacturing to COVID-19-related shutdowns in meat processing plants.

But beyond that, the long-term economic implications of COVID-19 for the state, and for rural counties in particular, remains unclear.

“We don’t have any models,” said James Kleckley, an economist at East Carolina University. “Usually, if like a hurricane hits North Carolina, we can look at past instances of hurricanes in North Carolina and what things are going to be affected. … We’ve never had a thing when in effect the whole country shuts down.”

A temporary dip?

A few factors may temper rural North Carolina’s bleak economic outlook. Just ahead of Memorial Day weekend, Gov. Roy Cooper eased some of the restrictions, allowing restaurants to accommodate a limited number of dine-in customers and reopening hair salons, meaning that some people will return to work.

North Carolina’s rural hospitals appear to be holding on, too, at least for now. Despite the wave of furloughs and layoffs, there have been no rural hospital closures in the state since the beginning of the crisis, according to UNC’s Sheps Center.

Slabach, of the National Rural Health Association, said that federal support to hospitals through the CARES Act has helped rural health systems weather the first part of the pandemic. But that is a temporary infusion, he added, and the pandemic’s economic implications to rural hospitals may last longer than federal aid.

In the meantime, Cooper announced the creation of a pandemic recovery office that will disburse state and federal aid to counties.

With support, Slabach said, recovery isn’t out of reach of rural economies.

“We are, if nothing else, resourceful and resilient and collaboration and innovation have always been the hallmark of our existence,” he said. “And I think if we get the right mix of tools available, I think we will be well-positioned for the future.”