Cooke Discusses Economic ‘Tightrope’ with Chamber Members

COURT HOUSE – For the second time this year, Dr. Oliver Cooke, of Stockton University, spoke to Cape May County Chamber of Commerce members July 17, via Zoom, about the region’s current economic and employment numbers.
In a PowerPoint presentation, Cooke, an economics professor, outlined how the Ocean City and Atlantic City metropolitan areas’ economy was impacted by lockdowns implemented to combat the COVID-19 pandemic.
Who Got it Worse?
The presentation showed that the Ocean City metropolitan area suffered less economic devastation than its Atlantic City counterpart.
Cooke’s first slide noted that Atlantic City’s metropolitan area, from March-May, tallied a higher unemployment number because of a high workforce linked to Atlantic City’s casino operations.
Starting at 7.3%, in March, the Ocean City metropolitan area’s unemployment rate increased, landing at 24.6%, in May. In a breakdown of job losses by county, the presentation noted that Cape May County, in a year-over-year outlook for May, saw most of its job losses come from the leisure and hospitality sector, a combination of restaurants, bars and entertainment-type businesses. This sector accounted for 68% of job losses, with retail trade following, at 11%.
Cooke further explained the breakdown of job losses by including national numbers for the leisure and hospitality sector, which, in May, was around 40% of national job losses.
Cooke added that economists are debating national economic numbers’ accuracy. One aspect he mentioned was how unemployment numbers are calculated, given that certain measures to calculate them may be faulty, given lockdown measures and accurately tallying how many people were available in the workface.
“Perhaps not the best indicator, or at least less useful than it usually might be,” Cooke said of the calculating methods, “but nevertheless, I think it’s pretty clear for everyone that it speaks volumes that, in two months, you’ve seen these rises in unemployment rates. Just unprecedented.”
Cooke noted that national establishment payrolls, in June, increased 4.8 million. Around 2.1 million of those jobs were linked to the leisure and hospitality sector, which he feels may be promising news for shore communities.
Statistics for June are expected to be released July 29, giving economists further information about the local economy’s rebound.
Silver Linings?
Continuing his presentation, Cooke discussed businesses that managed to survive strict lockdowns in the pandemic’s earlier months.
He noted that anecdotal reports suggest that while larger companies such as tech and IT corporations, sanitization product makers, grocers, and others have been doing “quite well,” some smaller businesses, both obvious and less obvious, have seen success.
Locally, Cooke noted that he’s seeing “good, healthy debates” about the summer tourism season, particularly with rental homes. Some arguments suggest that Cape May County’s summer season, which drives its economy, will survive and show promising signs, and Cooke is interested to review June reports from that sector once they’re available.
“One argument,” Cooke began, “is that given quarantine fatigue, which I think we’re all intimately familiar with at this point, along with the afraid to fly idea, might this actually end up, perhaps paradoxically, really helping summer shore rentals, as we move along and lockdowns ease and people become a little bit more comfortable over the course of the remainder of the summer.”
“That’s not my own sense, but I’ve heard this argued against in some quarters,” Cooke added. “What the ultimate kind of effect this will have on small businesses – you know, on the boardwalks and in communities – I think, is probably a little bit more subject to debate, perhaps given the social distancing constraints.”
Another aspect of Cape May County’s economic rebound is a possible mass migration to the area. Cooke’s presentation suggests that migration from larger cities could progress quicker because of the pandemic, where second homeowners make Cape May County residence permanent because of remote employment and a change in real estate dynamics.
“If you remember back in February, I spent some time discussing the very healthy real estate market in the southern regional economy,” Cooke said, “so I think this is certainly something that should be debated and closely watched as we move on over coming quarters. Probably more looks like the coming year.”
What Decides What’s Ahead?
Cooke’s final aspect of his presentation explained what factors will determine how the economy rebounds from lockdowns in 2020, two of which included schools and child care reopening, and possible rolling lockdowns.
A topic mentioned was how schools will operate come fall, where Cooke said that having children in school stimulates the economy and not having them in school over the past months has faltered the economy, besides businesses not permitted to open.
In his final remarks and from questions asked by attendees, Cooke repeatedly highlighted that he feels strong economic recovery will come from the federal level. He believes that over the coming months, the federal government must direct federal crisis packages to states, allowing them to provide further assistance for small businesses.
He said the Paycheck Protection Program (PPP) will likely be extending, which would further protect small businesses if lockdowns resume, as the pandemic lingers. He also said that he’d like to see more loans become grants.
“My general sense is that there is a lot of discussion about what Congress plans to do in August, as it relates to providing a lifeline, a serious lifeline, to the states,” Cooke said.
Cooke’s full presentation is available on the Cape May County Chamber of Commerce Facebook page (https://bit.ly/397RBnp).
To contact Eric Conklin, email econklin@cmcherald.com.