America’s economic recovery from the Great Recession has been terribly uneven, with growth concentrated mainly in large urban areas while many rural communities hemorrhage jobs and population. A new study by Olugbenga Ajilore, of the Center for American Progress puts numbers to this phenomenon. The takeaway: Business growth has been positive in “graying” communities and areas with large concentrations of Latinx or Latter-Day Saints residents, but tepid in “working class” communities, rural Middle America and the “African American South.”
While some rural communities are experiencing firm growth, there may be a role for the federal government to support local governments through expanding the capacity of community development corporations. The establishment and growth of new firms is critical to productivity growth, and productivity growth is at the heart of broader economic growth. Until policymakers consider business dynamism a critical issue in any effort to revitalize left-behind communities, these rural areas will continue to struggle in their recovery.
In Louisiana, as The Advocate’s Mark Ballard reports, the governor has tapped former state Sen. Ben Nevers to lead a state task force that will recommend ways to end this downward spiral. The group will look at issues such as infrastructure spending, crumbling schools and underpaid teachers that have long been a drag on rural opportunity, and is tasked with developing a series of short-term solutions and a five-year plan.
They’ll also look at the budgets for the Department of Agriculture & Forestry, which have been slashed annually for more than a decade. It’s the unaddressed consolidation of farms and new technology since the 1970s that has thrown tens of thousands of people out of work and started the decline in rural areas.
Should nonprofit hospitals be tax-exempt?
Many of America’s largest and most prestigious hospitals pay no income taxes to the federal government, even though they operate with hefty margins and employ a raft of highly paid executives. Dr. Danielle Ofri, writing in The New York Times, wonders if these mega-institutions are providing enough “community benefits” to justify their tax exemptions.
Should these highly profitable institutions be exempt from the taxes that pay for local roads, police services, fire protection and 911 services? Should local residents have to pay for the garbage collection for institutions that can afford multimillion-dollar salaries for top executives? Tax exemption needs to be redefined. Low-impact projects such as community health fairs that function more like marketing shouldn’t be allowed as part of the calculation. Nor should things that primarily benefit the institution, like staff training. Additionally, hospitals should not be allowed to declare Medicaid “losses” as a community benefit.
“Public charge” rule takes effect
Prospective immigrants to the United States will now be subject to a harsh new “wealth test” under a Trump administration rule that took effect this week following months of legal challenges. The “public charge” rule will make it harder for families with modest means to enter the country, and will discourage eligible families from accessing vital benefits such as SNAP or Medicaid that can help them overcome hardship. Route Fifty’s Andrea Noble has more:
The Urban Institute estimates that one in seven adults in immigrant families reported not participating in a non-cash government benefit program in 2018 for fear of risking future green card status. The Community Health Care Association of New York State estimates as many as 95,000 Medicaid enrollees could drop their coverage and become uninsured as residents in families with at least one noncitizen may be more likely to disenroll from the federal program.
The problem with “junk” insurance plans
One of the ways President Donald Trump’s administration has undermined the Affordable Care Act is by allowing insurers to sell “junk” health insurance plans. These policies are cheap because they provide very little actual coverage, as one Florida man learned recently when he returned from a work trip to China with flu symptoms and decided to get checked out for the deadly coronavirus. The Miami Herald reports:
He had the flu, not the deadly virus that has infected tens of thousands of people, mostly in China, and killed at least 2,239 as of Friday’s update by the World Health Organization. But two weeks later, (Osmel Martinez) Azcue got unwelcome news in the form of a notice from his insurance company about a claim for $3,270. … While Azcue’s experience shows the potential cost of testing for a disease that epidemiologists fear may develop into a public health crisis in the U.S., one insurance expert sees the episode as a cautionary tale about the potential risks associated with deregulation in the insurance market.
Number of the Day
93% – Average rise in compensation for chief executives of nonprofit hospitals from 2005 to 2015. Pediatricians saw a 15% increase and nurses got an extra 3% over that same period. (Source: New York Times)