Wednesday, May 29, 2024

Rural Center chief worried about pandemic impact on N.C. small businesses

More than 500,000 people in North Carolina have filed jobless claims since the outbreak of the coronavirus pandemic, marking one of the largest surges in the nation, according to various employment studies. Those job losses include 9,500 positions at N.C. companies that filed Worker Adjustment and Retraining Notification notices since February with the N.C. Department of Commerce, reflecting furloughs or permanent plant closures.

Most of the WARN filings have occurred in the state’s major metropolitan areas. Mecklenburg County companies have reported 2,541 lost jobs, while Guilford and Wake County employers have indicated reductions of 1,472 and 1,260, respectively.

But those numbers aren’t representative of where the impact will be truly felt in the state, says Patrick Woodie, president of the N.C. Rural Center, which works to develop and improve the quality of the North Carolina’s 80 rural counties.

[/media-credit] N.C. Rural Center President Patrick Woodie

“It is true that just as this whole process has unfolded that rural communities are the last place that are feeling the impact, but there’s no question we’re feeling the impact in every part of this state,” he says. “We have a saying when urban North Carolina gets a cold, rural North Carolina gets pneumonia.”

Rural counties and small-town communities are often the forgotten victims of major crises. There are also fewer jobs in rural parts of the state than 20 years ago, because many areas of North Carolina haven’t fully recovered from the past two recessions, Woodie says. When tragedy strikes, these communities are often hit deeper and face slower recoveries.

Woodie says disproportionately 75% of all businesses in North Carolina’s rural counties have fewer than 10 employees. “Those not only small businesses — but very small businesses — are really the meat and potatoes of local rural economies. And they’re also the most vulnerable.”

Several rural counties already face higher unemployment rates than urban North Carolina, and it’s often seasonal due to the heavy reliance on the tourism and hospitality industry in coastal and mountain communities. Woodie says the pandemic is going to blunt sales and occupancy tax collections, which will hurt local governments.

To combat the impending effects, the N.C. Rural Center has teamed up with seven Community Development Financial Institutions across the state to start the North Carolina Rapid Recovery Loan Program. The $15 million bridge loan program is being funded by the Golden LEAF Foundation and is intended to quickly fill the gaps for small businesses until Payment Protection Program assistance arrives. State lawmakers are considering adding another $25 million to the fund.

Woodie says the initial $15 million program was quickly oversubscribed after businesses in 98 counties filed 3,400 applications, requesting $122 million in assistance with an average loan request of $36,000. “The volume is unlike anything we’ve ever seen before with our disaster relief because virtually every business in all 100 counties is impacted,” he says.

Woodie says it’s positive that state leaders are discussing the right way to slowly reopen the economy. “They’re having the right conversations about how do we minimize the length of time, of debt, the losses that we’re incurring, and trying to get back to normal to whatever the new normal is.”

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