Programs may need to be redesigned to respond to the current downturn

The economic downturn caused by the COVID-19 pandemic has taken a painful toll on small businesses nationwide. State policymakers and economic development organizations find themselves on the front line in helping them weather challenging times, but existing incentive and finance programs may not be appropriate to address what these businesses face today.

Ellen Harpel is the founder of Smart Incentives, a consulting firm that helps state and local governments make sound decisions throughout the economic development incentives process. With a Ph.D. in regional economics from George Mason University’s Schar School of Policy and Government, Harpel brings decades of experience to her work. She also serves as a senior research fellow with the Center for Regional Economic Competitiveness (CREC), based in Arlington, Virginia.

Thirteen states have allowed unemployment benefits to fall below the poverty level of $245 a week, or $12,760 a year, according to a study released Monday by the Government Accountability Office (GAO).

The change has occurred since the the end of July, when a federal program providing $600 in supplemental weekly benefits expired.

The CARES Act signed into law in March provided the weekly $600 payments to all unemployment benefit recipients. The amount was an attempt to bridge the difference between average weekly payments that came in at $333 per week and median income.

Like millions of Americans, Kathleen Kroeger lost her job in the pandemic and needed help. Five months later, alongside scores of other Americans, she’s still looking for it.

States are swamped with unemployment claims, delaying the resolution of even minor paperwork issues. In some cases, it has taken legal action to break the logjam. It’s a problem states are wrestling with in different ways, ranging from adding phone staff to hiring contractors, and a challenge President-elect Joe Biden’s transition team has made a priority.

“Just the basic unemployment, $345 a week, would have made a big difference,” said Kroeger, 40, who managed a restaurant near her home in Piedmont, South Dakota, until it closed its doors in March because of the pandemic. She left soon afterwards to battle her own COVID-19 case and other health problems.

A slew of recent studies underscore the difficulties many workers of color, including Hispanics, are facing as a result of Covid. The Latinx community finds itself over-represented in industries such as hospitality and construction, which suffered mightily at the hands of the pandemic. But there are also bright spots: Hispanic unemployment began to drop at a rapid pace this summer as pandemic restrictions eased and work began to return to these sectors. The totality of the statistics is a mixed bag, highlighting areas where Hispanics are vulnerable, and places where opportunities for advancement are present.

While data from earlier in 2020 showed that Hispanics (especially Hispanic women) suffered the highest unemployment rate, thanks in large part to the Covid pandemic, those figures began to rapidly improve by the third quarter of this year.

Mortgage rates again sunk to a new low this week, according to Freddie Mac, marking the 14th time in 2020.

But the record comes just as a new refinance fee goes into effect, eroding some of the savings from historically low rates.

The rate on the 30-year-fixed mortgage fell to 2.71%, exceeding the previous low of 2.72% where it has been for the past two weeks. This is the lowest on records dating back to 1971 when the government agency that backs millions of mortgages started tracking rates.

Quick cash can be tempting

With big, bright signs offering quick cash, storefronts for payday loans are hard to miss. But while they may offer plenty of promises for easy financial help, there’s more to them than meets the eye.

Before you go down the financial rabbit hole payday loans can create, there are some things you may want to know.

Average credit card debt nationwide fell 6%

Southern states are facing the highest burden of credit card debt during 2020, and Louisiana residents have the biggest burden of all, a recent CreditCards.com survey found.

For the Pelican State, the average household carries $7,940 in credit card debt and earns a median income of $51,073, according to the data released Monday.

If residents pay off debt with 15% of earnings, it would take a Louisiana credit cardholder 15 months to absolve their debt, while paying $1,013 in interest, analysts noted.

Platform raised $50 million in a Series B funding round that included investment from singer Justin Timberlake, music group The Chainsmokers and retired athlete Eli Manning.

Step, a challenger bank aimed at the Gen Z market, announced a new round of high-profile investors Wednesday, just two months after the platform's official launch in late September.

The San Francisco-based startup said it raised $50 million in a Series B funding round led by Coate Management, with new investors singer Justin Timberlake and music group The Chainsmokers joining returning investors Stripe, Crosslink Capital, Collaborative Fund and singer and actor Will Smith's Dreamers VC.

Voters in 4 states approved measures on adult-use cannabis, but this new tax source could prove unreliable

Voters in Arizona, Montana, New Jersey, and South Dakota on Nov. 3 legalized recreational marijuana in their states, joining 11 others that already allow regulated use and sale of the drug.

Policymakers in these states pitched legal cannabis in part to bring in much-needed revenue. For example, in New Jersey, Governor Phil Murphy (D) said the money would “help fund critical priorities like education and infrastructure.” But tax revenue from marijuana has proved uncertain in normal times, and pandemic-driven economic disruptions and consumer behavior shifts may only add to that uncertainty.