April 9, 2020 | Volume 24, Issue 15
SSTI

Fed research shows links between financial distress and COVID-19 vulnerability, offers fiscal policy guidance

Early-stage research from the Federal Reserve Bank of St. Louis examines the correlations between an area’s level of financial distress and its vulnerability to both the health and economic impacts of the COVID-19 pandemic. The Fed’s initial findings indicate that areas with low levels of financial distress were infected with the coronavirus and reached the point of exponential growth in new infections before areas experiencing greater levels of financial distress, while the rate of new infections is higher in more distressed areas. It also finds that a greater share of workers from areas of higher distress work in industries that are more vulnerable to the economic shocks caused by the virus than workers from areas of lower financial distress.

As shown in the chart below, the researchers divided counties into five groups, or quintiles, based on a county’s level of financial distress — measured by the proportion of people who become 30 and 90 days delinquent on a credit card payment throughout the year.  Read more  | 

 

SEC opens public comment period for changes to exemption regulations

The U.S. Securities and Exchange Commission is accepting public comments regarding their proposed changes to exempt offerings regulations. These modifications, originally announced last month, aim to streamline and expand the fundraising abilities for businesses while still qualifying as exempt from the SEC’s registration requirements. These changes include the separation of “demo days” from the general solicitation category, providing a new outlet for companies to advertise to potential investors. Read more 

Addressing barriers for women is crucial to STEMM success

A report released earlier this month by the National Academies of Sciences, Engineering, and Medicine, addresses the barrier of inequality that women, despite making up more than 50 percent of the population, experience in the fields of science, technology, engineering, mathematics, and medicine (STEMM). Further, women of color are severely underrepresented in every STEMM discipline. The report focuses on promoting systemic change in the STEMM enterprise in order to mitigate structural inequities, biases, discrimination, and harassment faced by many women, which consequently discourages education and careers in STEMM. Read more

Startup trends examined in recent reports

While startups consistently create more jobs than older firms, the Federal Reserve Bank of St. Louis took a look at the trends in startup’s share of jobs and found that startup employment share has been declining for more than a decade. The Fed story provides an overview of startup employment dynamics between 1994 and 2018. While it found that the construction industry and leisure and hospitality industry contributed to the decline more than did the rest of the economy, the story calls for future research into the reasons behind the decline. Specifically, it notes that questions both about a decline in startups and about a change in employment dynamics among aging firms should be explored.

A separate report from the Kenan Institute of Private Enterprise and the Entrepreneurship Center at UNC takes a closer look at entrepreneurship. Read more 

Census Bureau expands institutional participation for Post-Secondary Education Outcomes

Despite having no coordinated outreach and growth strategy, the Census Bureau’s Longitudinal Employer-Household Dynamics (LEHD) program has increased university participation in its Post-Secondary Education Outcomes (PSEO) survey — which illuminates the employment and earnings outcomes of graduates as well as what industries they work in and which region of the country they live in after graduation — and is already in the process of negotiating a significant expansion for the next wave.   Read more 

GAO issues recommendations on efforts to prevent sexual harassment and discrimination

A recent report from the U.S. Government Accountability Office (GAO) detailed findings of a review of federal efforts to prevent sexual harassment at universities that receive grants for STEM research. The GAO reviewed five agencies (the Department of Energy, U.S. Department of Agriculture, NASA, Department of Health and Human Services, and the National Science Foundation) that provide approximately 80 percent of federal STEM research grants and found that four of the five received few complaints under Title IX from individuals at universities. Title IX prohibits sexual harassment and other forms of sex discrimination in education program that receive federal funding. Federal agencies are required to enforce the law at universities they fund. Read more 

State News


While it will be weeks before states’ officials know just how bad their fiscal situations are, due to the economic downturn caused by the coronavirus pandemic, it is apparent that the problem is so great that some experts are discussing the idea of large-scale debt forgiveness. While others argue for allowing states to have the ability to deficit spend by either suspending or repealing the states’ balanced budget requirements.

According to a newly released study, Florida, Hawaii, Idaho, Louisiana, Maine, Montana, Nevada, Oregon,  South Carolina, and Vermont are identified as the states most vulnerable to the economic shock being caused by the pandemic.  

Earlier this week, Oklahoma lawmakers granted Gov. Kevin Stitt increased and broad emergency powers under the Governor’s Emergency Health Declaration. The measure, which covers 30 days and can be renewed by additional vote, allows the governor to overturn rules and regulations in the state’s fight against COVID19. The declaration, passed after 9/11, has never been used until now.

According to data recently published by the Pew Charitable Trusts, states ended their 2019 fiscal years with record levels of savings and budgetary surpluses, which are now quickly being put to the test. Those states with the largest portioned budgetary reserves — Wyoming, Alaska and North Dakota — are able to continue their services for 100 days or more, while Kansas and Illinois reportedly have the smallest amount in rainy day funds, which are estimated to cover less than a week.
 

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This week's Staff Picks:

Smart Cities Dive: Higher air pollution lined to coronavirus deaths: study
 A Harvard study makes an explicit link between air pollution and COVID-19 deaths, though experts have argued for some time that related respiratory symptoms can be exacerbated by poor air quality. Read more

The Hill: Trump rollback of Obama-era mileage standards faces challenges in courts
President Trump’s rollback of Obama-era mileage standards last week may prove to be one of the administration's most vulnerable environmental overhauls as opponents prepare to challenge it in court. Read more

Governing: Why state legislatures should go virtual in a time of crisis
This opinion piece argues that when an emergency like the coronavirus makes it too dangerous for lawmakers to convene in person, they should be allowed to meet, debate and vote remotely. Read more

APLU: Letter urging Congress to provide $26 billion in emergency funding to support U.S. research enterprise
The Association of Public and Land-grant Universities, the Association of American Universities, Association of American Medical Colleges, and American Council on Education called on Congress to approve $26 billion in emergency funding for the nation’s major federal research agencies to address an array of challenges due to COVID-19. Read more

US Census Bureau: Nation’s population growth slowed this decade
The nation’s growth continues to slow, according to Vintage 2019 population estimates by the U.S. Census Bureau — the last estimates before results of the 2020 Census count of the U.S. population are released at the end of the year. Read more

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