By Jeff Moore
Raleigh, NC – When the calendar flipped from 2020 to 2021, some breathed a sigh of relief. The advent of COVID-19 and the associated pandemic policies were a whirlwind of emergency measures that threw the state, nation, and world into disarray. What has transpired over the first half of this year could well be considered the aftermath, even as residents deal with reemerging government edicts in response to the Delta variant.
In addition to the novel coronavirus, this includes fallout from myriad and unprecedented COVID policies. Whether it be businesses struggling to meet ‘reopening’ demand while competing for labor with increased unemployment benefits, parents fighting for their kids’ return to school, or the state legislature figuring out how to allocate revenue surpluses — which many people would have assumed to be deficits only one year ago — 2021 has largely been a reaction to the response.
2021 N.C. General Assembly
Usually, the ‘long session’ of the General Assembly is dominated by the formation of a new biennial budget. This year, some of the most consequential legislative action came before budget writers had even wet their pens.
Multiple massive federal rescue packages approved by Congress meant lawmakers’ first order of business involved allocating billions in federal funding. In early February, the legislature passed, and Gov. Roy Cooper signed, Senate Bill 36, a COVID relief bill allocating millions for schools, vaccine distribution, rental assistance, and expanded broadband services. It included $1.6 billion for K-12 schools, $95 million in federal funding for vaccine distribution, $39 million to expand rural broadband internet access, and $546 million for the Emergency Rental Assistance Program; plus an additional $155 million in rental assistance distributed to local governments.
While passing out federal dollars enjoyed unanimous support, other priority COVID aftermath legislation endured far more debate. Cooper “strongly urged” elementary schools to open for in-person instruction in early February, a welcome sign for parents and students alike dealing with remote learning struggles, but middle and high schools remained closed. The General Assembly passed Senate Bill 37, mandating in-person instruction options for all schools, but Cooper vetoed that bill. It wasn’t until the next month that the N.C. Board of Education issued new guidance and subsequent negotiations yielded an agreement that led to the overwhelming majority of K-12 schools opening to students.
Yet the damage from months of remote-only instruction had been done. Closing the COVID education gap began in earnest soon thereafter, as the legislature passed the Summer Learning Choice for N.C. Families Act on April 1, with the governor signing the bill into law just eight days later. The bill provided for a summer school program to offer core academic courses and enrichment instruction to tackle learning deficits accrued after months out of the classroom.
Beyond reopening, schools were the question of the governor’s authority to make such sweeping actions in the first place. Throughout 2020, acrimony over emergency powers was palpable, and that tension extended into 2021. Eviction moratoriums, mask mandates, capacity restrictions and business closures; almost exclusively, the most impactful COVID-19 emergency orders were decreed by Cooper unilaterally. Over the spring, state House and Senate passed separate bills, the Emergency Powers Accountability Act and the Emergency Management Act Revisions Act, respectively, that shared a central aim. Both pieces of legislation pointed squarely at reining in the governor’s open-ended and unilateral use of emergency authority through reforming the N.C. Emergency Management Act to require multiple layers of concurrence, from the Council of State to the state legislature itself.
Neither bill passed out of the General Assembly, undoubtedly due to assured vetoes. But major elements of those reforms are now contained as policy items in the biennial budget just approved. Other bills targeting the end of the extraordinary supplemental unemployment insurance benefits, an effort to spur higher workforce participation as economic demand grew, were passed, but ultimately vetoed. Still, not immune to public pressures, and faced with undeniably waning cases of COVID-19, Cooper reluctantly began to lift the most onerous of emergency orders.
Incremental reprieve from executive orders
During the first half of 2021, the executive orders that disrupted life so significantly over the prior year began to slowly peel away. But not right away. Cooper began the year by extending stay-at-home orders that set curfews for businesses, capacity restrictions, a moratorium on evictions, and statewide mask mandates.
It wasn’t until Feb. 24 that Cooper suspended the statewide curfew and began to ease business restrictions, albeit incrementally. A month later, as COVID-19 vaccines became available, came more incremental easing of business restrictions. But another month later, on April 28, the outdoor mask mandate was finally lifted. These changes came because public sentiment turned decidedly toward reopening and the desired return to normalcy.
Still, Cooper retained the remaining restrictions with the promise of lifting them only as the state hit vaccination targets by certain dates. It was an ultimatum he couldn’t enforce, as consumer economic activity and public perception of the threat posed by COVID-19 began to diverge significantly from that implicated by the state of emergency.
On May 14, citing progress on vaccination, Cooper signed Executive Order 215, officially lifting all capacity restrictions and social-distancing requirements for businesses and venues and suspending the statewide mask mandate, except for certain settings. It marked a return to normal, largely, as coronavirus numbers continued to dwindle. The Delta variant, however, has sent towns, cities, and counties scrambling to set their own safety protocols, in the absence of a statewide mandate.
Still, COVID’s initial retreat this spring meant a return to work-search requirements for those receiving unemployment benefits. Cooper signed such an order May 24 as job openings increased markedly and labor market woes became pronounced.
In the following weeks, most of the executive’s attention then shifted to vaccination as a primary focus. With progress toward vaccination targets slowing as nearly half of all adults received their shots, Cooper signed an executive order to implement a vaccine lottery incentivize more to get inoculated. Four $1 million prizes and four $125,000 scholarships for adults and kids, respectively, who got at least one dose of the vaccine, were offered via a random lottery funded by federal COVID money at the executive’s disposal. Winners have been announced, but the incentive hasn’t resulted in a renewed rush for vaccination. North Carolina is still short of Cooper’s goal to have two-thirds of adults vaccinated, with an original target date of July 4.
North Carolinians’ interest in bringing back summer was not slowing down, however. The pre-Memorial Day orders in effect cleared the runway, and the confluence of federal stimulus checks, savings, and pent-up demand provided the motive power to take off.
The term ‘Carolina Comeback’ was actualized over late spring and early summer. The state last year saw the steepest job losses on record in a span of a mere few weeks in spring 2020, yet the intervening months proved V-shaped for many segments of the economy. Stock markets retraced losses and broke out to new highs, and unprecedented federal spending packages landed in consumers’ pockets, complementing a similarly historic injection of liquidity into the financial system from the Federal Reserve.
North Carolina was no exception. From 3.5% in January 2020, the unemployment rate in North Carolina topped out at 13.5% in April and May 2020, according to numbers from the U.S. Bureau of Labor Statistics. Since then it has moved in the opposite direction. At the outset of 2021, the state’s unemployment rate stood at 5.9% and has continued to fall as the state emerged from pandemic restrictions. Preliminary numbers for June 2021, the latest month on file, put the unemployment rate at 4.6%, a level similar to that enjoyed in 2017.
It’s even lower in certain areas of the state, such as the Crystal Coast of North Carolina, where tourists have flocked to enjoy vacations by the sea. At 3.6%, the unemployment rate in Carteret County is near a historic low, and visitation numbers are breaking record highs. It has not been without pain points. Remember, this is the aftermath. This, as Director of Economic Development for Carteret County Don Kirkman puts it, “creates a severe workforce challenge.”
While consumer demand came surging back, and restrictions were lifted, businesses rushed to reclaim lost revenue and get back on their feet. Job openings began to pile up. Heading into the summer, ‘Help Wanted’ signs were more numerous than ‘Grand Re-Opening’ signs in towns across the state. The same unprecedented measures taken in Washington, D.C., which left many consumers flush with cash, also added a supplement to unemployment benefits that changed the calculus for the unemployed to accept a job offer. That means businesses hiring low-skill labor, hospitality workers, and seasonal jobs, had to compete with Uncle Sam. Those pressures aren’t unique to smaller towns. Even businesses in relatively large labor markets have felt the effects of the aftermath.
“Labor, getting enough workers, has been our No. 1 struggle over the last six months,” says Heath Stanley, owner of Captain Stanley’s Seafood Restaurant in Raleigh. After having to let workers go last spring and relegated to take-out orders only for months, the restaurant struggles to keep enough floor and kitchen staff to service a demand that has returned to pre-pandemic levels. And it’s not the only ripple effect of 2020 they are feeling.
“Then comes food scarcity and rising costs of goods. Moving forward it will be rising wages,” Stanley adds.
The wave of COVID cash has met with the large ripples of supply disruption still reverberating throughout the economy. Everything from lumber to chicken wings, to paper and liquor, has faced some level of supply crunch, and with it a spike in prices.
Mountaire Farms, one of the nation’s largest chicken product producers, operates some of the largest poultry plants in the country right here in North Carolina. Community Relations Manager for the company’s Siler City plant, Jarrod Lowery, says his company is doing all it can do to keep up with demand, after facing product surplus challenges only months ago.
“We were deemed essential workers from the beginning, and we took precautions to make sure our workers were safe, but it’s been full-speed ahead in 2021,” Lowery said. Last spring, Lowery helped organize community sales — refrigerated trucks full of 40-pound bags of chicken — to distribute surplus production direct to consumers, as disruptions in the supply chain stifled demand from large customers. Then, he says, “It was like a switch flipped. One day we have too much chicken, too few buyers, and the next day it seemed like we couldn’t get enough. We literally called a truck back that had been sent to distribute surplus, because it changed that fast.”
In the meantime, Mountaire Farms has managed to grow from the sixth- to the fourth-largest producer of chicken in the country. The company harvest about 880,000 chickens each day. Lowery credits the company’s workforce, and the focus on keeping them safe and productive, for the growth. Still, Lowery worried for a time he would have to hatch chicks himself when labor got so tight.
“We treat our workers well,” Lowery said. “They’re making $19.50 an hour to start, and it was a struggle earlier this year for a lot of the industry to keep enough workers to meet demand. We were well-positioned, but there were times we’d help out other producers who just didn’t have the labor to harvest all the chickens they had coming on a given day.”
Things are running apace now, but Lowery says challenges remain. Namely, exporting has become more difficult as world trade bounces back but containers remain scarce. North Carolina doesn’t exist in a vacuum, after all, and the policies of pandemic panic still reverberate on a global scale.