JEDE COVID-19 Update for June 12, 2020

MAJOR ANNOUNCEMENTS

• California Forecast:  Beacon Economics released its Summer 2020 economic forecast for the US and California, which continues to call for a strong, rapid recovery during the last half of 2020, including improvements in both employment and output. https://beaconecon.com/publications/beaconomics/ 

• Raising Social capital in the Times of COVID-19:  Five US foundations issue first social bonds to fund $1.7bn in grant making to address coronavirus emergency.  This is the first social bond issued on the behalf of non-profit foundations to be offered in the US taxable corporate bond market.  Bond proceeds will be used by the Ford Foundation, Doris Duke Charitable Foundation, MacArthur Foundation, W.K. Kellogg Foundation, and Andrew W. Mellon Foundation to provide increased grant-making above their normal pay-outs over approximately two years.  The Social Bonds Series 2020 will be underwritten by Wells Fargo Securities and Morgan Stanley.  There is also a commitment that a groups of diverse co-managers will participate in the offering.  By issuing debt (bonds), the foundations will be able to offer additional charitable support without having to liquidate any of their endowments during the current unstable market conditions.  https://www.pioneerspost.com/news-views/20200612/ford-foundation-announces-historic-1bn-social-bond

• Self-Employed Legal Clinic:  CAMEO is partnering with Zitrin Family Foundation, Legal Aid At Work. and the Renaissance Center to host a Free PUA Legal Clinic where qualified individuals will walk clients one-on-one through the application process.  Please help get the word out and encourage self-employed small business owners in California to call or sign-up for the Legal Clinic.  Law students with non-English language skills are available, including Spanish, Tagalog, and more. 

  • Online Toolkit with Flyers and Other Information:  https://docs.google.com/document/d/1DcQO1Gx98Yv2I94QUbKtxh2HOxAYCT_UQ3SQEX7m3vQ/edit

  • PowerPoint:  https://cameonetwork.org/wp-content/uploads/2020/06/PUA-Assistance-Info-Session-Full-Deck.pdf

  • Call for an Appointment:  (415) 484-8372

  • Complete an Online Form to Request an Appointment:  https://docs.google.com/forms/d/e/1FAIpQLSeaswxpC2ImR8W_PmT7RPazC9ygRNv6HR5EdcfA5Sm5wENmYQ/viewform

• New Market Tax Credits:  The US Treasury Department and the Internal Revenue Service released guidance on New Market Tax Credit transitions, which are impacted by COVID-19.  The new guidance applies to community development entities (CDEs) investing in and qualified active low-income community businesses (QALICBs) conducting businesses in low-income communities.  Notice 2020-49 provides a CDE or QALICB with relief for certain specified time-sensitive acts that are due to be performed between April 1, 2020, and December 31, 2020, in order to meet requirements under section 45D of the Internal Revenue Code and its regulations. A CDE or QALICB is provided time to perform the following acts by December 31, 2020: make investments, make reinvestments, and expend amounts on construction.

  • Announcement:  https://www.irs.gov/newsroom/treasury-irs-provide-tax-relief-to-investors-and-businesses-affected-by-covid-19-in-new-markets-tax-credit-transactions

  • Notice 2020-49:   https://www.irs.gov/pub/irs-drop/n-20-49.pdf

ECONOMIC RECOVERY

• The Role of Racial and Economic Inequalities in COVID-19:  The Federal Reserve Board of San Francisco released a framework for engaging on racial and economic inequities in the United States against the backdrop of COVID-19.  Given that the health and economic impacts of COVID-19 disproportionately affect people of color, society’s response to the pandemic will similarly have a greater impact on the future of these individuals.  The article states that equal treatment is not enough, that COVID-19 solutions need to be tailored to reflect these inequities, and provides recommendations on how.  https://www.frbsf.org/our-district/about/sf-fed-blog/racial-equity-primer/?utm_source=verticalresponse&utm_medium=email&utm_campaign=cd-digest

• Minority-Owned Small Businesses:  McKinsey released a report, COVID-19’s Effect on Minority-owned Small Businesses in the US.  The report stated that while the COVID-19 emergency was affecting small businesses across the board, the crisis was likely to disproportionately affect minority-owned small businesses.  The two reasons cited for this disproportionate impact is that minority-owned small businesses, as a group, were more economically fragile prior to the crisis, and located within industry sectors most impacted by the Stay-at-Home orders and other coronavirus-related response actions.    https://www.mckinsey.com/industries/social-sector/our-insights/covid-19s-effect-on-minority-owned-small-businesses-in-the-united-states

• Racism and Economic Inequality:  The Economic Policy Institute released a report, Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality.  This report examines how these conditions have left “many Black workers with few good options for protecting both their health and economic well-being during the coronavirus pandemic. Persistent racial disparities in health status, access to health care, wealth, employment, wages, housing, income, and poverty all contribute to greater susceptibility to the virus—both economically and physically.”  https://www.epi.org/publication/black-workers-covid/?utm_source=Economic+Policy+Institute&utm_campaign=005fde17ac-EMAIL_CAMPAIGN_2019_02_22_11_12_COPY_01&utm_medium=email&utm_term=0_e7c5826c50-005fde17ac-58654365&mc_cid=005fde17ac&mc_eid=0fdbd68996

• The Pandemic Could Result in More Entrepreneurs:  A 2013 peer reviewed article in the Journal of Economics and Management Strategy, vol. 22, How the Great Recession Spurred Entrepreneurship, reported that during the Great Recession higher local unemployment rates were tied to higher rates of entrepreneurship. The article states that entrepreneurship rose by 17% from 2006 through 2009 and that individuals who were unemployed started more businesses than those who held jobs.   https://www.strategy-business.com/article/re00240?gko=c9bcf

• Federal Reserve Board:

  • Economic Forecast:  The Federal Reserve released a data table projecting that the US economy will contract by 6.5% this year and that unemployment will be under 10% by December 2020.  This data table will later be incorporated into a summary of economic projections released with the minutes of the June 9-10 Federal Reserve Board meeting. The Federal Reserve also signaled they intend to hold interest rates to near zero through at least 2022.  https://www.federalreserve.gov/newsevents/pressreleases/monetary20200610b.htm

  • The Monetary Policy Report:  The Federal Reserve Board to issued its mandatory report to the US Congress, The Monetary Policy Report, which contains discussion on current monetary policy, economic development, and future trends.  Special topics in this Monetary Policy Report include disparities in job loss during the pandemic and small businesses during the pandemic.  This report⁠ is submitted semiannually to the Senate Committee on Banking, Housing, and Urban Affairs and to the House Committee on Financial Services. https://www.federalreserve.gov/monetarypolicy/2020-06-mpr-summary.htm

• Recovery Predicted in Farm Country:  The Farm Credit Administration received a quarterly report at this month’s board meeting on economic issues affecting agriculture, together with an update on the financial condition and performance of the Farm Credit System (System) as of March 31, 2020.  According to the report, “The US economy appears to have turned the corner following its steep and rapid contraction following the COVID-19 outbreak. April's high unemployment rate edged down slightly in May, and weekly initial unemployment claims continue to decline… For agricultural producers, market volatility has been high for both crop and livestock sectors. Crop returns continue to be under pressure this year because of plentiful supplies and expected strong production. The livestock sector has seen the most disruption during the crisis, but low corn prices have helped reduce feed expenses. The loss of restaurant and food service demand and livestock processing capacity disruptions lowered prices across the livestock marketing chain.  Commodity prices are rebounding somewhat as the food system adjusts and regains its footing. However, challenges remain with processing backlogs, continued cases of COVID-19 among farm and food processing workers, and uncertain demand prospects.”  https://www.fca.gov/template-fca/about/2020JuneQuarterlyReportonFCSCondition.pdf?utm_medium=email&utm_source=govdelivery 

• Economic Outlook for Largest Global Economies:  The Organization for Economic Co-operation and Development (OECD) released a COVID-19-based economic outlook, which considers two most likely scenarios.  Under the first scenario, the virus continues to recede and remains under control, and under the second, a second wave of rapid contagion erupts later in 2020.  After initially establishing this pandemic has resulted in the worst global health and economic crisis since WWII, the report lays-out the case for why the recovery is anticipated to be slow and have lasting impacts, disproportionally affecting the most vulnerable populations.  The report recommends certain policy changes, including calling for global cooperation on the production and distribution of the vaccine; shifting from a “blanket to targeted support” to support workers’ transition to new jobs, and ensuring “rapid firm restructuring and provid[ing] social protection to the most vulnerable.”

  • Announcement:  http://www.oecd.org/newsroom/global-economy-faces-a-tightrope-walk-to-recovery.htm

  • PowerPoint:  https://read.oecd-ilibrary.org/view/?ref=134_134128-yslmloiby1&title=OECD-Economic-Outlook-The-World-on-a-Tightrope

  • Editorial:  https://oecdecoscope.blog/2020/06/10/after-the-lockdown-a-tightrope-walk-toward-recovery/ 

• UK Border Controls and Brexit:  The Financial Times is reporting that the British government has abandoned its plan to introduce full border checks with the EU on January 1 as ministers come under mounting pressure from business not to compound the chaos caused by the COVID-19 pandemic.  This is considered a significant policy U-turn.  Full border checks will be replaced with temporary “light-touch” checks at major UK ports like Dover.  The UK is one of California’s top ten trade partners and California policy makers and businesses are closely watching the British government’s disengagement with the EU.

DATA AND PROGRAM ANALYSIS

• Real Time Data:  The Council for Community and Economic Research and LMI Institute Forum held its 60^th Annual Conference virtually last week. The second session presentation, The Urgency for Real Time Data, addressed the challenges of reopening without having access to real-time labor market and workforce information. Because traditional data sources are often published with significant time lags, new sources of data are needed to understand the rapid economic changes that occur with re-opening and to develop timely and accurate projection of trends.  https://blog.c2er.org/2020/06/the-urgency-for-real-time-data/

• Corporate Disclosure and Transparency:  A Financial Times article, Investors Watch for Double Standards on Black Lives Matter, shows how US companies lag behind the rest of the world on diversity and inclusion disclosure.  “Transparency, or lack thereof, on important issues like diversity and inclusion reflects a company’s corporate governance approach, culture and risk mindset,” said Datamaran CEO Marjella Lecourt-Alma in the FT article.  https://www.ft.com/content/03328cea-b391-4517-8123-71ae65827074?utm_campaign=Newsletter%20-%20from%20June%202020&utm_medium=email&_hsmi=89362597&_hsenc=p2ANqtz-8iaKolTf25yotq_1wwXWJFgiHbYTr5olRR-yiikEfw8Gc9ouaewDLneWNWenpEopGxJJt5NtuYwfg45il_6-nOQbKTVg&utm_content=89362597&utm_source=hs_email

• ADA Compliance and Inclusive Workplace:   The US Department of Labor (DOL) released the results from its 2018 Survey of Employer Policies on the Employment of People with Disabilities.  According to the announcement, the Office of Disability Employment Policy uses the nationwide survey data in their compliance education activities with federal contractors and during compliance evaluations.

  • DOL 2018 Survey Report:  https://www.dol.gov/sites/dolgov/files/OASP/evaluation/pdf/EmployerSurveyFinalReport.pdf?utm_campaign=&utm_medium=email&utm_source=govdelivery

  • DOL Issue Brief, Implemented Disability Inclusion in their Workplace Policies and Practices:  https://www.dol.gov/sites/dolgov/files/OASP/evaluation/pdf/58088_DOL_PolicyBrief_%231_07-for508.pdf?utm_campaign=&utm_medium=email&utm_source=govdelivery

  • DOL Issue Brief, Implementation and Effectiveness of Disability-Inclusive Workplace Practices and Policies Brief:  https://www.dol.gov/sites/dolgov/files/OASP/evaluation/pdf/DOL-PolicyBrief-2.pdf?utm_campaign=&utm_medium=email&utm_source=govdelivery

  • DOL Issue Brief:  Employer Practices and Attitudes toward the Employment of People with Disabilities:  https://www.dol.gov/sites/dolgov/files/OASP/evaluation/pdf/58803_DOL_PolicyBrief_%233.pdf?utm_campaign=&utm_medium=email&utm_source=govdelivery

GRANTS, LOANS, TAX CREDITS

• CalMoneySmart - Funding for Financial Education:  The California Department of Business Oversight released an RFP for the CalMoneySmart grant program.  CalMoneySmart is a grant program created by Senate Bill 455 (Ch. 478, Stats. 2019), which can award up to $100,000 grants to eligible entities to develop and deliver free financial education and empowerment programs to help unbanked and underbanked communities.  Funding is conditioned upon an appropriation in the 2020-21 State Budget.  Applications due by 5 p.m. PT on July 3, 2020.  Grant funds will be disbursed in full to grantees on or about September 21, 2020.  https://dbo.ca.gov/calmoneysmart/

• PayPal Empowerment Grants for Black Businesses Program:  Association for Enterprise Opportunity announced a $10 million grant initiative, PayPal Empowerment Grants for Black Businesses Program.  The program will provide grants of up to $10,000 per business to Black business owners impacted by COVID-19 or civil unrest, to cover expenses related to stabilizing and reopening their businesses.   https://aeoworks.org/paypalgrant/

• Bank of America Funding Commitment:  Bank of America pledged to donate $1 billion over 4 years to help communities hurt by coronavirus.  The programs will target people and communities of color that have experienced a greater impact from the health crisis, with a focus on health, job support and creation (training, reskilling and upskilling) and support for small businesses and housing needs.  https://newsroom.bankofamerica.com/press-releases/bank-america-announces-four-year-1-billion-commitment-supporting-economic

• Tax Credit Demand More than Double Supply:  The CDFI Fund released information on its 2020 application round.  The CDFI Fund received applications from 588 organizations for a total of $535.4 million in awards.  Available funding is $199.5 million.  https://www.cdfifund.gov/news-events/Pages/news-detail.aspx?NewsID=382&Category=Updates

• More Grant Info:  Additional information about grants and loans is available through the JEDE COVID-19 resource page:  https://ajed.assembly.ca.gov/content/business-coalition-and-philanthropy-loans-and-grants

COVID-19 PROGRAM UPDATES

• Update on UI and PUA:  California Policy Lab, through a partnership with the Labor Market Information Division of EDD, released the fourth of a bi-weekly series that analyses initial UI claims.  Their goal is to provide a near real-time look at how the COVID-19 crisis is impacting various industries, regions, counties, and types of workers.   https://www.capolicylab.org/california-unemployment-insurance-claims-during-the-covid-19-pandemic/#int-Media

• Donation of Leave to Support Charities:  The IRS released guidance (Notice 2020-46) for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic. Notice 2020-46 provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation.  Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.  Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of either section.  https://www.irs.gov/pub/irs-drop/n-20-46.pdf 

• CA Fraud Alerts – New Interactive Website:  The Federal Trade Commission (FTC) launched a new interactive COVID-19 complaint data dashboard.  Through the new platform, individuals can retrieve state-level data on complaints filed about different COVID-19-related fraud.  So far, the FTC has received more than 91,000 total COVID-19-related complaints between January 1 and June 8, 2020. Consumers have reported losing a total of more than $59.2 million to COVID-19-related fraud.  Reports regarding online shopping problems currently top the list of complaints in most states. California has reported the largest number of COVID-19-related complaints.  https://www.ftc.gov/enforcement/data-visualizations/explore-data?utm_source=govdelivery 

• CA Small Business Loan Activity:  The SBA regularly reports to the Governor’s Office of Emergency Services on disaster loan activity from California small business.

• Great Plates Delivered:  The Great Plates Delivered program provides three meals a day to qualifying seniors.  FEMA just granted a 30-day extension to allow the program to continue to July 10.  As shown in the chart below, the demand for meals far exceeds the number of businesses under contract.  Interested restaurants and food providers are encouraged to fill out this form: https://state-of-california-agency.forms.fm/great-plates-delivered-food-provider-interest-form/forms/7917  

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