Mounting case counts, hospitalizations and deaths. Soaring unemployment claims and nose-diving tax revenue. Mysteriously high infection rates among Latinos. No matter what part of the human toll and economic destruction wrought by COVID-19 in Rhode Island you focus on, the numbers have been staggering.
After a monthlong stretch of steady increases in many metrics, however, recent data suggests the worst of Rhode Island’s health crisis may be behind us.
But Gov. Gina M. Raimondo’s daily balancing act of turning the valve to the economy slow enough to ensure safety but fast enough to minimize the economic pain is also playing out in the minds of many Rhode Islanders: Is it really safe to restart the economy – but can we afford to wait?
State health officials say stabilizing hospitalizations – though higher than previously thought after the state updated its tracking system on April 30 – as well as decreasing numbers of people in intensive care units and on ventilators are encouraging signs. New state projections also suggest the peak of the virus has passed, despite the single largest daily death toll reported on May 3.
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SURGE LOSES POWER IN R.I.
After a doubling of hospitalizations from March 29 to April 5, the number of people hospitalized has not risen as sharply in recent weeks, and new models suggest the state has passed the peak. Meanwhile, the state saw its largest single-day increase in deaths reported on May 3, though the week-to-week climb has held steady. A 14-day decline or stabilization in current hospitalizations is one of two main benchmarks – the other is a 14-day decline in new cases – that Gov. Gina M. Raimondo says she is looking for when considering advancing the phased reopening of the state economy.
/ Source: R.I. Department of Health
. *Based on date reported, which might reflect a delay from when the death occurred.[/caption]
Rhode Island has done “fantastically” well in terms of slowing the spread compared with other regions, including nearby hotspots such as Boston and New York City, said Dr. Michael Fine, Pawtucket’s public health liaison who also leads the Central Falls Office on Health.
But many unknowns – how the virus spreads, how many people are asymptomatic carriers, whether a second infection among former COVID-19 patients is possible – remain.
“These are [not] hard and fixed rules because the virus doesn’t follow our rules,” Fine said.
A 14-day decline in new cases or a 14-day decrease or stabilization in current hospitalizations are the two main benchmarks that Raimondo looked for when considering advancing the phased reopening of the state economy, set to begin May 9.
[caption id="attachment_329675" align="alignright" width="187"]
TOO SOON? Dr. Michael Fine, Pawtucket public health liaison and Central Falls health policy adviser, is concerned about a second spike with Rhode Island moving to restart its economy while there are many unknowns. / PBN FILE PHOTO/MICHAEL SALERNO[/caption]
Fine, however, suggests a 21-day decrease or flattening of hospitalizations and new cases as a more-conservative benchmark to hit before reopening, based on what he estimated to be the lag time between infection and when people become sick enough to warrant hospital care, or die. While state officials have described the latest numbers as evidence of stability, Fine fears transmission and infection rates could spike again.
The daily increase in cases has bounced up and down, with the longest consecutive decline just four days – hardly enough to establish a trend, according to Emily Oster, a professor of economics at Brown University who helped develop the state’s projection model. Variables such as slower test-site traffic on weekends and foul weather also may depress new cases temporarily.
But with the state now regularly exceeding 2,000 tests per day – leading the nation in per-capita testing – the percentage of positive cases among those tested has held relatively stable, hovering around 13.5% since halfway through April.
Bill Ronci was counting down to May 9, when he planned to reopen his North Kingstown specialty olive oil and vinegar store, The Impressed Olive. Ronci said he felt positive state data trends supported his decision.
Considered an essential business selling food, the store could have stayed open during the crisis, but Ronci opted to close in March “to not tempt the hands of fate.” After more than a month of curbside and online-only sales – and more than a 50% drop in revenue – he was anxious to revive his livelihood and offer limited in-store hours.
“You can only stay closed for so long,” he said, adding that many of his neighboring business owners in Wickford village also planned to reopen May 9. “I had a thriving business before all this.”
While the statistics leave some business owners eager to reopen, others are less sure. Restaurant owner James Mark, however, sees only one choice.
The health risks posed by reopening too soon are far more important to Mark than the financial future of his Providence restaurants, big king and north, despite a drop in sales and staffing cuts as he has transitioned to takeout-only service in March.
And regardless of when the state deems it safe for restaurants to reopen dining services, Mark said he would not do so until a vaccine or clinically tested therapeutic treatment emerged, or a “massive” testing level that included both sick and healthy people was reached.
“I will close my restaurants and go bankrupt with a smile on my face before I put my staff at risk,” he said.
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SUDDENLY JOBLESS
Unemployment claims skyrocketed in the weeks after the state ordered many businesses to close, spurring employers to lay off large percentages of their workforces. Daily increases quickly surpassed prior historic levels, including the 110,000 new claims filed for all of 2009 and the 5,300 single-week peak during the 1992 banking crisis, according to the R.I. Department of Labor and Training. Still, DLT Director Scott R. Jensen cautioned that some individuals have filed multiple claims because of panic and confusion over eligibility, which has inflated the total number of claims.
/ Source: R.I. Department of Labor and Training
*Does not include those filing for temporary disability insurance, including temporary caregiver insurance.
**Based on total labor force as of March 14 of 566,600 workers[/caption]
JOBLESS JUMP
What is clear is that the job market is unlikely to return to where it was anytime soon. Before the onset of the pandemic, the state’s unemployment rate hit historic lows of 3.4%. That changed in mid-March when state leaders enacted sudden, economy-crushing measures to slow the spread of coronavirus.
The effects were immediate. Unemployment jumped to 4.6% for the month of March, and it hasn’t stopped there.
Recent projections by Michael Lynch, an economist with IHS Markit, indicate the Rhode Island unemployment rate will reach nearly 16% by July – eclipsing the peak of 11.2% in the aftermath of the 2008 recession, as well as the state’s highest-recorded jobless rate of 13%, in 1975.
Daily unemployment claims also provide a glimpse of the catastrophic impact on the labor force. As of May 5, total claims filed hit 208,293, reflecting more than one-third of the labor force based on 566,600 workers as of March 14. In contrast, 4,755 claims were filed in the entire month of February.
Even during the Great Recession, new unemployment filings peaked at 110,000 over the course of 2009.
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CALM BEFORE THE COVID-19 STORM
(R.I.’s monthly seasonally adjusted unemployment
rate for the previous 12 months)*
In the year prior to the onset of the new coronavirus, Rhode Island’s unemployment rate had reached historic lows, which R.I. Department of Labor and Training Director Scott R. Jensen credited to workforce-training programs such as Real Jobs Rhode Island. The increase in unemployment for March, which reflects data through March 14, doesn’t capture the full extent of COVID-19’s impact on the labor force. However, even available data shows the unemployment impact in Rhode Island to be more severe than the national average or its regional peers.
/ Source: R.I. Department of Labor and Training
*April data not yet available.[/caption]
Scott R. Jensen, director of the R.I. Department of Labor and Training, said it was “too early to tell” what impact the wave of new job losses would have on the economy.
“From the perspective of planning, we need to be ready for a scale of unemployment that looks like the initial claim numbers,” Jensen said. “We are looking at a lot of factors, including the ripple effect of closures on long-term economic health.”
University of Rhode Island economist Leonard Lardaro wasn’t so measured, predicting the state’s jobless rate could rise to more than 20% and adding that a rebound could be a long time in coming. “I don’t see Rhode Island’s economy recovering for at least one to two years,” Lardaro said in late April.
Edinaldo Tebaldi, a professor of economics at Bryant University, hesitated to say how high Rhode Island’s unemployment rate could soar. But based on claims filed and the state’s reliance on leisure and hospitality workers – an industry decimated by coronavirus closures – Rhode Island’s economy is more vulnerable than others to long-term stagnation, Tebaldi said.
Another indicator Tebaldi said is needed to calculate the economic impact more precisely is the decrease in state revenue.
“States have very little ability to change the revenue side of the equation,” Tebaldi said. “They cannot just print money. A big challenge will be finding revenues to support government operations.”
Indeed, income and sales tax revenue comprise nearly two-thirds of the current budget’s $4.2 billion in general revenue, according to a new report by the Rhode Island Public Expenditure Council. Then there are the ramifications of closing the state’s two casinos March 14, which usually bring about a $1 million a day into the state’s coffers.
While the state has not published details on the extent of the financial hit for state government, the Federal Reserve Bank of Boston and Moody’s Analytics forecast up to $464 million in lost revenue for fiscal 2020, which ends June 30, and up to $592 million lost through fiscal 2021.
Then there’s the impact on small businesses, which comprise 99% of the state’s business community, according to the U.S. Small Business Administration.
Rhode Island applicants received more than 7,000 loans totaling $1.2 billion out of the first round of funding via the Paycheck Protection Program, and $22.6 million across 142 loans through the Economic Injury Disaster Loan program as of April 19.
As of May 1, another 6,800 loans worth $550 million had been approved for local small businesses under the second round of PPP funds.
But high demand for federal funding left many frustrated business owners unable to submit or even begin their applications for these programs, meaning the need among Rhode Island small businesses is likely far greater. When investment bank Goldman Sachs Group Inc. made $10 million available to help struggling businesses in Rhode Island, the money was depleted within hours.
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HIGHEST CASE COUNTS
IN EACH COUNTY* This map of the hardest-hit communities in each county shows that Providence and most municipalities that ring the capital city have been COVID-19 hot spots. One explanation is the high population density, making it easier for the virus to spread and harder for the sick to be isolated. Central Falls – which has the highest per-capita rate (2.6%) – Providence and Pawtucket have the state’s highest concentrations of Latino residents, who have been disproportionately affected by the pandemic.
/ *As of May 6
. **Based on 2018 U.S. Census Bureau population estimates
. Source: R.I Department of Health[/caption]
‘CORE’ ISSUES
The pandemic has taken a psychological toll, too.
Calls to United Way of Rhode Island’s 211 service increased by more than 40% in March 2020 compared with the same period a year earlier, with 40% of the 17,903 calls related to COVID-19. Not only has the number of calls gone up, but so has the anxiety and stress levels of those calling – a kind of qualitative benchmark of the impact of COVID-19, according to Cortney Nicolato, United Way of Rhode Island CEO and president.
The disparity between the haves and have-nots in the state is not new, but the pandemic has brought increased attention to the plight of those without adequate resources, Nicolato said.
“We know every data point shows the lack of educational resources, lack of housing resources, lack of economic mobility experienced by our callers well before COVID even happened,” she said.
A majority of calls come from “core cities” such as Providence, Pawtucket and Central Falls – some of the communities with the highest per-capita infection rates. As of May 4, Central Falls led in per-capita infections, with 2.6% of its residents testing positive, followed by Providence (1.7%).
The higher concentration of COVID-19 cases is what prompted Providence Mayor Jorge O. Elorza to enact early limitations on businesses and residents, he said. Central Falls Mayor James A. Diossa also adopted stringent restrictions early on, such as requiring residents to wear face masks in public.
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THE SEARCH FOR NEW CASES
Case counts continue to increase, though health experts warn that positive cases are not a true measurement of the spread of the virus, but rather the state’s case-finding and testing abilities. A better measurement, according to some, is the number of positive cases as a percentage of total tests performed, which appears to have stabilized in recent weeks – a possible indicator that the spread of the virus has slowed. Federal guidelines name a 14-day stabilization or decrease in positive cases as a percentage of total tests as one barometer for reopening state economies, though Gov. Gina M. Raimondo has announced her own set of benchmarks for a phased reopening in Rhode Island.
/ Source: R.I. Department of Health[/caption]
The state’s urban communities also have higher percentages of minority residents, who have been disproportionately impacted by the coronavirus. Latinos comprised 44% of cases and 33% of hospitalizations as of May 4, though they make up just 16% of the state population.
Fine attributed the higher rate of infection among Latinos to several factors, including that they are more likely to live in crowded conditions that hasten transmission and work in industries that require their presence in spaces where social distancing is difficult to maintain.
“There’s nothing magic about speaking Spanish that puts you at greater risk,” Fine said. “This is born out of social conditions under which they live that put them at risk of serious consequences from any virus.”
Elorza agreed.
“There really aren’t too many places at this point where the public is gathering, but the places that do exist disproportionately are operated by and worked in by Latinos,” he said.
Diossa and Elorza anticipated that new testing sites in Providence, Pawtucket and Central Falls would increase case counts in their cities, as more residents are able to access testing.
Among the markers Dr. Claire Levesque, chief medical officer for commercial products at Tufts Health Plan, is awaiting is information about immunity among those already infected.
“That gives us a better ability to say whether there will be a significant second wave,” she said. “If most people are still not exposed and there’s no immunity, the concerns for a second wave of infections will be greater.”
And the question over which numbers – health or economic – should inform reopening was simple for Tebaldi.
“That conversation should be guided by health experts, not economists,” he said. “This is a health crisis and should be treated as such.”
[caption id="attachment_329679" align="aligncenter" width="1024"]
LONG RECOVERY AHEAD?
(R.I.’s seasonally adjusted unemployment
rate every January since 2007)
According to historical monthly unemployment rates, Rhode Island did not return to its pre-recession unemployment level until the end of 2016 Ω eight years after the downturn hit. While the full impact of COVID-19 on Rhode Island’s unemployment rate remains unclear, R.I. Department of Labor and Training Director Scott R. Jensen said his office was prepared for a prolonged period of high unemployment Ω similar to or potentially worse than the aftermath of 2008. /
Source: R.I. Department of Labor and Training[/caption]
Mark agreed. He empathized with the financial losses incurred by protesters at the Statehouse demanding reopening – his own business has seen ups and downs with even the highs nowhere near their pre-COVID-19 levels. But that would never be worth risking the life and health of his workers.
“If my specific restaurants don’t make it, that’s OK, because the people will still be there,” Mark said. “If you lose the people, then you’ve lost your business anyway.”
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
The question is – would businesses enjoy opening to get their part of the economy going, and pay people to run the place, as no one comes in? It’s way too early to open anything. At least another 30 days. Completely disagree with opening as people are still consistently getting sick and dying.