In Perry County, Kentucky, the local government is reducing garbage collection. Magoffin County fires public security workers. And in Floyd County, where food pantries report that demand tripled in the last month, officials are trying to figure out how to avoid cuts to a program to distribute food to families.
“A lot of these kids, this is the only meal they get in a day,” said Floyd County Judge-Executive Robert Williams, the chief elected officer. “I can’t ask a child to sit at a computer all day and not eat anything.”
In cases and deaths, Kentucky has not been as badly hit by the coronavirus as some other states. Like most of the country, it saw a spike this fall, albeit less severe than neighboring Tennessee. Even so, Kentucky’s economy is volatile, especially in rural areas that are already struggling.
“Before Covid, we needed urgent economic help,” said Matthew C. Wireman, the chief executive of Magoffin County, an Appalachian county that had unemployment rates of 16.7 percent in October and was one of the highest in the country.
The aid package that Congress passed this month and signed by President Trump on Sunday should help. The $ 600 payments to individuals criticized by the president and many progressives for being too small would go a long way if the typical household is making less than $ 40,000 a year. This also applies to the $ 300 weekly unemployment benefit supplement. And the bill contains provisions to support rural areas, including subsidies for broadband infrastructure and aid to smallholders.
Aid would come, however, over the objection of a Republican Senator from Kentucky, Rand Paul, who was one of only six to vote against the package in the Senate on the grounds that it was to distribute “free money. “And it would be smaller and later than it would otherwise have been due to the work of the other state Senator, Mitch McConnell, who, as the majority leader, was fighting to cut the package.
In particular, Mr McConnell has sought to rule out broad-based aid to state and local governments – aid that many local officials in his state believe are urgently needed.
However, a spokesman for Mr McConnell said lawmakers hadn’t been a hindrance and helped guide the federal response to the multi-billion dollar pandemic.
“The compromise bill is not perfect, but it will do a tremendous amount of good for the fighting Kentuckians and Americans across the country who need help now,” McConnell said in a statement on Sunday evening.
Paul’s office did not respond to requests for comment.
Unemployment rates in some rural areas are in double digits. The high hunger and poverty rates before the crisis have risen. Kentucky has lost more than 20,000 state and local jobs since February. With budgets crippled by falling tax revenues, officials have to choose between tax hikes and tax cuts.
“It’s frustrating that our own senator doesn’t support local governments,” said Democrat Wireman. “These are exceptional times and we must take exceptional action at the national level by our federal government to help the people.”
Like many rural areas across the country, Magoffin County is heavily dependent on the public sector. State and local government agencies account for nearly a third of all employment in the county, versus an eighth of all jobs nationally. Elliott County, two counties in the north, is even more dependent: nearly two-thirds of all jobs are government jobs, including more than 200 in a state prison.
“State and local government is the primary employer in many rural communities,” said Janet Harrah, executive director of outreach, Northern Kentucky University Business School.
State and local governments also offer “good jobs” – stable, relatively well paid, with perks – that have often closed the factories and coal mines that once played that role. Shedding more jobs, Ms. Harrah said, will slow the recovery.
The Kentucky economy has great strengths. Nationwide, the unemployment rate in November was 5.6 percent and thus above the national rate of 6.7 percent. The state’s central location has helped it become a logistics hub for UPS, DHL and Amazon, all of which thrived in online shopping during the pandemic boom. Toyota and Ford have factories in Kentucky; They closed early in the pandemic but have been brought back to life to meet increasing demand.
As across the country, however, the pandemic has further widened the gap between rich and poor areas.
Louisville, the largest city and the state’s largest economic engine, has suffered the loss of tourism and entertainment, but industries less affected by the pandemic such as healthcare and professional services have helped sustain the economy. This is not the case in many rural areas, where there may only be a handful of major employers.
“When the people of urban areas start spending again, there will actually be other businesses to replace those that have perished,” said Ms. Harrah. In rural areas it will be very difficult to replace these jobs once they are lost.
Daryl Royse tries to hold on. He is a co-owner of Heritage Kitchen, a convenience eatery on Main Street in Whitesburg, a small town near the Virginia border.
Mr Royse’s business survived the first wave of the pandemic with a loan from the federal paycheck protection program and small grants from local groups. But that aid is gone and the pandemic is hurting his business again.
The economic aid package that President Trump signed on Sunday evening will issue payments of $ 600 and distribute federal unemployment benefits of $ 300 for at least 10 weeks. Find out more about the plan and what it includes for you. For more information on how to get help, please visit our hub.
- Do I get another incentive payment? Single adults with adjusted gross income A 2019 tax return of up to $ 75,000 per year would be paid $ 600, and heads of households up to $ 112,500 and a married couple (or someone whose spouse died in 2020) earning up to $ 150,000 per year would be paid receive double that amount. If they have dependent children, they will also receive $ 600 for each child. People with incomes just above this level would receive a partial payment that decreases by $ 5 for every $ 100 of income.
- When could my payment arrive? Treasury Secretary Steven Mnuchin told CNBC that he expected the first payments to be made before the end of the year. However, it will take a while for everyone to receive their money.
- Does the agreement concern unemployment insurance? Legislators agreed to extend the length of time people can receive unemployment benefits and restart an additional federal benefit that is on top of the usual state benefits. But instead of $ 600 a week it would be $ 300. That would take until March 14th.
- I am behind on my rent or expect to be soon. Do I get relief? The deal would provide $ 25 billion to be distributed through state and local governments to help backward tenants. To get help, households would have to meet several conditions: Household income (for 2020) must not exceed 80 percent of the area median income. At least one household member must be at risk of homelessness or residential instability. and individuals must be eligible for unemployment benefits or face direct or indirect financial difficulties due to the pandemic. The agreement states that priority will be given to support for lower-income families who have been unemployed for three months or more.
Last month, in response to the surge in virus cases, Governor Andy Beshear stopped eating inside the state. He canceled the order this month, but Mr. Royse’s business has not recovered. Since reopening, it has not occupied more than three tables at a time. Without federal help, he said, getting through the winter could be a struggle.
“There’s sort of a division between people who go to Washington and the people they represent in very small communities, especially in rural areas,” Royse said. “We really need the help.”
Communities like Whitesburg struggled long before the pandemic. The coal mines that fuel the economy in eastern Kentucky have been in decline for decades, and despite federal and regional revitalization efforts, the area suffers from high rates of chronic health conditions, low education, and widespread poverty.
Post-Great Recession economic expansion failed to undo many poor rural communities, and the pandemic has undermined much of the progress made.
“What Covid did was it pushed them back further,” said Olugbenga Ajilore, an economist with the Center for American Progress who has studied the impact of the pandemic on rural America. Many factors that contributed to the pre-pandemic battles in the region – inadequate digital infrastructure, lack of access to health care – made the area particularly vulnerable, he said.
In addition, high rates of poverty mean that many families have gotten into the pandemic with few resources to weather the storm. And many of them have suffered permanent financial damage during the months of delay in aid, said Jason Bailey, executive director of the Kentucky Center for Economic Policy, a liberal group.
“It’s no different than anywhere else, except that we were just looking at so many people who were on the fringes anyway, with no savings, no buffers,” he said.
The pandemic has cut the incomes of Alicia Hardwick, a hairdresser near Pikeville, an hour north of Whitesburg, in half. She was entitled to partial unemployment benefits, around $ 90 every two weeks, but payments stopped in early October and she was unable to contact anyone from the state employment service to resolve the issue.
Mrs. Hardwick tried to make masks as a way of making money, but it was never much. Her husband has been more successful in doing some freelance marketing videos for a little more money. But it wasn’t enough – just as the couple feels they are being caught up, another bill is due and the cycle continues.
“Then we’ll be broke again and have to go to work and make more money to give it away,” Ms. Hardwick said. “It’s the little people who are suffering right now, and the rich get richer.”
She said she was skeptical of the federal government even before the pandemic. This year’s events cemented that feeling and demonstrated to her that the people of Washington are unable or unwilling to help those they represent.
“I didn’t trust the government that much before because we know they were keeping things from us, but now it’s almost like the government is angry,” Ms. Hardwick said. “It really brought me home that I was right not to trust them fully – never, never, never.”
Patricia Cohen contributed to the coverage.