UNC-Chapel Hill studies pandemic's impact on business, economy
A new report issued Tuesday by the Kenan Institute of Private Enterprise at UNC-Chapel-Hill studies when "business as usual" might return in the wake of the global coronavirus pandemic.
China and a policy brief during today's briefing, you're going to hear from a number of experts whose insights and work have contributed to the report and its findings. Then, during the second half of our conversation, we're gonna open things up for your questions. For reporters who are joining us via Webinar, you are welcome to submit your questions any time using that Q and a function at the bottom of your screen. And, of course, for reporters joining us by phone, you are welcome to submit your questions to me directly via email. My email addresses Mackenzie underscore Bab at Keenan dash flagler dot unc dot e d u Um, with that, it is my pleasure to turn things over to our first speaker, Keenan Institute executive director professor Greg Brown. Greg. Thanks, Mackenzie and thank you everyone for joining us today, Mackenzie said. I'm Greg Brown on finance faculty here. It can fly, but Business School and the executive director for the Institute of Private Enterprise. Obviously we're very excited to be releasing this report on seven forces reshaping the economy. I want to start by recognizing the large number of people that were involved in this it was. It was a really significant effort. Um, it was really ah couple dozen academic experts that we drew on for multiple universities. We also had substantial input from top executives and private sector business as well as policy experts. And in fact, we The raw material for this report came from discussions with our CEO forum. Um, that was coordinated by UNC Kenan Flagler Business School, uh, in the Canon Institute. Andi, Through those discussions we identified, you know, more than a couple of dozen important business dislocations which, through careful analysis, we were able Thio effectively traced back toe seven unifying forces. And we obviously can't claim that this is 100% comprehensive discussion of all that's in place right now with the economy. But we really feel that we've been able to capture the vast majority of ends and forces that are driving changes in the economy currently and likely to continue affecting the economy for the foreseeable future. I also want to mention, as Mackenzie said, there's actually two reports. There is the main report that describes the forces at a national international level and how they're shaping the economy. And there's a companion report that's much longer. Has a lot of additional detail, including specific policy and business operation. Recommendations with a specific focus of North Carolina is an example. So both of those are available for download on the Can Institute website and the the Dashboard. So for the next couple minutes, I just want to touch on a couple. Specific topic is the currency of the economy as we draw near a specific example of one of the forces that your analysis as for going next, that's in the recovery. So what's up? E. Z Good news? A. It really balanced one ways from that trough neighbor. The economy by are tracked by more than 3% on. Then we start rebounds and they talk about the economy back to probably within 10% and free. And, uh, that, in fact, especially bad. Well, June economy appears to be relatively stuck it out. Trouble was the deficit. Yeah, it would be 5% closer nationally. E think there's a word times e z all e, especially among smaller businesses that are most vulnerable. Hey, hey, Greg, Sorry, it's Mackenzie just jumping in. I think we're having a little bit of trouble with your audio. Um, if you don't mind, if if you've got any other programs that are open right now, if you could just close out of those were having a little bit of interference with your audio on. I wanna make sure that it's gonna hear everything you have to say, and you're muted now, but I'm gonna I'm gonna mute myself again and let you take the reigns once more. We just had some feedback that there was some interference there. Thank you. And now you just amuse yourself. You're looking crystal clear. Okay, so is that Can you hear me now? Great. Okay, so I'll let me go back just a little bit. Ah, here and, um uh, reset with where we were on the on the economy. So I was especially that the economy, you know, significant downturn in in, uh, March in April left the economy down about 30%. And then we started to see a rebound in May and June that brought the economy back to within about 10% of the pre pandemic output levels. But that's sort of the bad news as well, in the sense that the economy really has been treading water and stuck at those output levels since mid June. And there's some worrying signs that growth is stalling on that, especially among smaller businesses, which we think are the most vulnerable in this current climate. So understanding why the economy has stalled and what we can do about it is really the primary goal of the Seven Forces analysis. And as an example, I want to quickly talk through our analysis of. That's why the most obvious economic force I'm currently in play. And that's the accelerating shift to on demand and at home retailing. So, of course, the shift to online retailing has been happening for 20 years. But the shock from the pandemic has really rapidly upended that market even further. And in 2020 we're likely to see the closure of Mawr brick and mortar retail outlets than in a year in U. S. History. So a same time that we see this this really pressure on traditional retailing. We're also seeing certain segments of the market like grocery and delivery, with an explosion in demand on unlike prior economic downturns, where kind of everything declines a same time. We've seen these really kind of tearing of the retail industry with substantial positive pressures in some areas and negative pressures and other areas. This is affected supply chains and, most importantly, it's impacted workers in the labor force. I think it's also clear that this is not a temporary shift. There may be a temporary component to it, but consumers have now learned how to consume goods and services differently, and this is going to persist on a probably a prominent uh example of this is some less tech savvy consumers. I think older consumers have now learned how to do more online shopping, especially things like online grocery, uh, ordering and even some other essential types of goods and services. And these skills are likely to persist in effect, the type of consumption that happens even after the pandemic isn't limiting their ability or raising concern about their ability. Thio go to the store. So importantly, the statistics tell us that these types of shifts have affected some populations more than other so specifically, we know that lower income households, people of color women and especially single women with Children have been disproportionately impacted both by the health risks of the pandemic. But also the economic downturn. And of course, this ties back to the work that these groups do, which is disproportionately in the retail goods and services industry. So while there has been growth unemployment for online and on demand jobs, these air often different skill sets different physical locations, sometimes inferior jobs in the sense they have lower pay or fewer benefits or gig economy type of jobs. So a report identifies these issues, but also importantly, we wanna look ahead. And what could be done to sort of mended this tear in the labor market around retail and around online, uh, goods and services and e commerce, and help get the economy back to full employment as quickly as possible. So we have a variety of recommendations. But here's just a couple. Um, this is an opportunity for Re Skilling on up Skilling of certain segments of the labor force. We know that there is this temporary slack in the labor force and we can take advantage of that toe. Have these people undertake new skills and, um, workforce development programs that will make them more competitive and lead to higher incomes and higher productivity in the future. Another is that location is less important now in many businesses, so certain areas with competitive labor markets can attract components of the retail goods and services supply chain that air, not location specific. So these could be anything from production of specialty goods. The logistics fulfillment. Eso, for example, many jobs that might have been concentrated in high cost urban areas could move to lower cost, geography ease and suburban areas. So, as you can see, taking advantage of these opportunities will likely take a combination of efforts across private sector business and government policy. Both they're gonna need to make new investments and policy will have toe do things like adjust regulatory framework. Thio include do things like including reducing regulatory barriers and prevent that prevent movement of labor across occupations. So with that, I want to turn it over. Thio David Carroll, who is a senior fellow with the Cuban Institute and the chair of the North Carolina at CEO Forum. Thank you, Greg and Good Morning is great, said I'm David Carolina, retired banker of 38 years with Wells Fargo and currently a private equity investor in Charlotte. And I'd like to share a few thoughts on how we think financial markets and capital providers will adjust to the risk in the new economic environment ahead here on the heels of the election, I'm reminded of that expression. Elections have consequences. Well, recessions have consequences, and we don't think we've yet experienced the brunt of all those consequences caused by the pandemic and the economic shutdown. Congress provided over $3 trillion in the Federal Reserve over $6 trillion in much needed physical and monetary support. That's gone a long way to provide a financial lifeline for millions of impacted workers, and it's kept financial markets functioning well. But the payroll benefit has run out in the book of monetary support has gone towards preserving asset values for existing and largely publicly traded financial instruments, not new capital issue. It's private company. Access to capital is and will likely be another story. Recall that the unemployment rate peaked somewhere around 15% in mid spring is actually closer to 20% when you include about five million in furloughed workers, but unpaid, which are not included in the Bureau of Labor Statistics calculus. That number has improved a great deal. It was down to about 8.5% in August. But again, that doesn't include a very large wave of expected, largely white collar furloughs in the coming months. So the pain so far has been felt mostly by lower paid hourly workers. Expect the next phase to fall much more heavily on higher paid middle income families and professionals as employers adjust or right size employment for the expected revenue environment ahead. Coming into the pandemic, household debt had grown over 30% since the financial crisis, with US consumers holding over $4 trillion in non housing debt and over $10 trillion in housing related debt. So pretty leveraged, pretty fully leveraged and not really well positioned for declines or, in many cases, a total loss of income. We expect capital access to private middle market and small, closely held businesses to be severely strained. Underwriting criteria is tightening, while balance sheets and business conditions are weakening. For those companies, industries so far that have been hardest to hit up in hospitality, hotels, bars and restaurants, travel and transportation, sports and entertainment motion pictures and recording elective medical procedures. And his Greg touched on non online retail thes air all Typically, large employment sectors expect record business failures. That is, not firms closing permanent. That's firms closing permanently, not reorganizing through bankruptcy because of the government stimulus mentioned earlier. Much of the effects of this, and yet to be felt another major shoe to drop is the ultimate impact of mortgage and residential rental forbearance. Agreements in consumer debt extensions put in place over the last eight months for the vast majority of those recapture and repayment will be expected. Now. The good news in all this if there is any that backs non bank lenders. Private equity investors pre pandemic came into this in very good shape, with high capital reserves and a lot of liquidity. So we don't expect this to spiral into a systemic financial crisis like in 2000 and 8 2000 and nine. However, lenders and investors are bracing for extremely large credit losses and permanent deterioration and employment and wages and material sectors of the economy, and that will be reflected in more conservative underwriting criteria and generally a lower risk appetite. Now, clearly their businesses and sectors, as is noted in our report that are and will thrive in this economy and North Carolina's financial services sector. Our banks are non bank lenders. Asset managers, fintech companies and private investors are well positioned to support that growth. Bottom line. The expected to be a while before permanent job losses, business failures and credit defaults peak and return to pre crisis levels. Our report outlines a number of areas of opportunity to prioritize and dealing with this. And Greg touched on a few workforce development in retraining, universal broadband access, fortifying existing and surviving businesses as opposed to chasing perhaps new businesses and housing. Just to name a few. To capitalize on those, though I think it's fair to suggest we're gonna need much mawr and better public private collaboration and, more specifically, targeted government support. So thanks, and I'll now turn it over to Jimmy Rosen, CEO of Artisan Biosciences, to talk about shocks to healthcare and pharmaceutical demand. Jimmy. Thank you, David. It's been a privilege to learn from you over this process. I have to say, I'm going to talk a little bit about the shocks to healthcare and pharmaceutical demand, which is listed as the sixth of the seven forces, and I'm also going to buy reference, uh, include um, some of the onshore in conversation that is a third of the seven forces, so eyes, David said. My name is Jimmy Rosen on the CEO, Artisan Biosciences and adjunct faculty at the UNC Gillings School of Global Public Health. We'll start with hospitals. So as the report outlines, US hospital losses from March through June exceeded $200 billion. Uh, most of that is un recoverable. As we know, acute care evaporates and and hospital based care typically operates at capacity. Which means that, uh, surgeons, let's say, who show up early in the morning round on their patients. They go into the operating room for the vast majority of the morning, and then they round again and have clinics in the afternoon. They're already working the maximum number of hours they can work, and the operating rooms are operating at full capacity. So the losses that they've incurred over the last six months don't return Justus a frame of reference. The typical hospital, uh, tertiary care facility may make a 10% margin over the course of the year, which means that you know, if a really big hospital that does a billion dollars worth of business in a year may have $100 million a t end of the year in which they can spend on, um on maintenance cap. Ex outfit building new buildings, etcetera. Eso the hospitals that have incurred losses over the course of the last six months will take years to recover from those setbacks in their ability to provide advanced care. Unfortunately, the impact of this has been disproportionate on primary care and rural facility. So small rural hospitals, especially in the state of North Carolina, have been closing at an alarming rate. And this is increasing theme healthcare disparities, especially for people of color and people who live in rural outlying areas. Um, we've seen this issue manifest itself much more aggressively during covert times, and we only can predict that it will accelerate. Um, the, uh, one of the things that the report does a really nice job of outlining is how we can migrate some of healthcare to telemedicine, to say, Well, telemedicine seems obvious. And why wouldn't people want more telemedicine? And frankly, during Cove, it anecdotally been hearing about people who had a telemedicine visit. They say, Well, I logged on. I could do whatever I needed to do. While I was waiting for the physician to show up, we had a good visit. The physician was able to ask me the exact same questions that I would be asked in person. I didn't have to pay $5 for parking. I didn't have to wait an hour in a waiting room and my visit was very efficient. So people would say, Well, why doesn't healthcare migrate more aggressively towards telemedicine? And why did it take a pandemic? Thio open people's eyes thio to the potential here. Well, part of it is that the way hospital systems and health care systems were set up, you may notice that you get a bill from the hospital and you also get a bill from the provider. And telemedicine does not come for free. When people have a telemedicine visit, they simply say, Well, I've logged on. I spoke to a position for five minutes, I logged off and I got $100 bill. And, um, it's very hard for people to reconcile that it's hard for hospital systems to take that, uh, that centralized service that they provide and externalize it. So hospitals first of all we're going to need to figure out. And hospitals and health care systems, I should say are going to need to figure out how they build in that that I t infrastructure charge into their building process and replace some of what they call the facility. Charge, um, with an I T charge. And that may seem straightforward. But in an antiquated system like building medical records for hospitals, it's actually quite challenging. Um, one of the this And this is one of the places and opportunities that we really think North Carolina can excel. North Carolina has I t infrastructure and expertise. North Carolina has some of the best health care in the world. And if they can integrate these two processes, Thio add efficiencies at efficiencies, toe hospitals and health systems. That would be a major contribution for the state of North Carolina. Now switch on briefly talk about the pharmaceutical industry. One quick comment about what relates to operation warp speed and vaccine development, obviously central and crucial to getting, uh to getting the world back on track and the world economy back on track. But a note of caution that Operation warp speed is an anomaly for the federal government to assume all the risk or that let's just say the vast majority of the risk in an R and D effort like vaccine development um is is something that you might see once in a generation something like a cancer Moonshot or the war on drugs gets people's attention and it gets a lot of federal dollars. But the risk ultimately gets distributed to the farmers who called companies or the people who are delivering the care. So how do we How do we combat that? Well, one of the ways and this is where I'm gonna bring in. Um uh, the Force number three is is by on shoring certain activities, and North Carolina is very well equipped to do this. Over the past 30 years, we've seen a massive amount of offshoring activity, and both services and manufacturing in the health care industry and 30 years may seem like a long time, but we were able to do it pretty efficiently, and we should be able to return some of that. So, um, providers, policymakers, they're going to need to turn their attention to what are the essential medicines that we need to bring back onshore. What are the alliances that we're going to need to make with our allies to make sure that essential medicine, production and distribution is centralized? And how do we make sure that we can get those services and medicines distributed? Um, equally across our population, regardless of location and socioeconomic background? And then finally, let me just talk quickly about the C R O industry, the clinical research organizations that have a large presence in the state of North Carolina. These will also benefit from telemedicine and monitoring. Excuse me, Monitoring of clinical trials remotely, uh, can be transformational to the clinical research organization industry. And it's something that we really ought to focus on as a state in North Carolina in building our effort there. So let me stop and turn it over to Dallas. Alexander. Thanks, Jimmy. Can you be okay? Great. So also, you know, thanks so much for the King and Institute authoring this report and highlighting the urgent need. We have to create solutions for these issues, including issues in the workplace, Duthie impending of child care and educational challenges, which is Trend five in our report. Um, Angeles Alexander Executive vice president and chief people officer, Red Hat for an Enterprise Open source software company and the open hybrid cloud technology leader. And some of the context I'll offer is from that vantage point. We have offices and people around the globe that are also part of my remarks. Um, and we've been in a work from home mode as our default around the globe for the last six months months. So these issues that we're gonna talk about are also now being highlighted beyond our work, particularly with the passing of Justice Ruth Bader Ginsburg. He was such a strong advocate for equality in the workplace, and we have an opportunity to be purposeful about how we as a society, think about long term solutions. I was just reading Forbes article that really resonated with me, and it characterized caregivers is drawing on reserves of heroic proportions as they navigate the via little on uncertain and ambiguous world. With all the challenges of the pandemic and the impact on the economy and their incomes and educational responsibilities and impacts from, um, you know, emotions based on what's happening with social unrest in our world and The New York Times recently raised the alarm, saying that the endemic is a mental health crisis for parents. These challenges air magnified for women and minorities and can lead to burn out and career drop out. And so what? We've seen progress in a number of measures for equality for women. The need to take on additional health care responsibilities during the pandemic creates new pressures, pressures that we don't have aligned. Policy responses for the kingdom. Report highlights that pre pandemic students spend an average of more than 30 hours a week in school, not including extracurricular activities. A swell as before and after school care. That's a lot of infrastructure that working parents relied on and all the support structure has been upended, leaving parents to manage not only doing their jobs, many of them in a remote environment but also educating their Children at the same time. And despite a lot of progress, not all parents are created. Equal Research tells us that women still shoulder more childcare responsibilities that men in general. For example, last month there was a new study by all raise that found that pre pandemic 11% of women founder founders regularly spent more than seven hours on caregiving, while 0% of male founders did. And now, with a pandemic, 52% of female founders spend more than seven hours a day on caregiving, while only 26% of male founders dio. So. It's interesting. Despite, um, female founders spending more time on caregiving, they report no impact to their revenue. That seems like a recipe of her burnout. Um, for those women who don't own their own businesses, we can see additional risk to their career trajectories that we need to mitigate. And we wonder, you know, to meet these demands. Are women more likely to ask for reduced hours or pursue less demanding jobs and thus see reduced pay? And our men generally less likely to seek reduced work responsibilities and thus be present and more likely to be top of mind for career opportunities and increases to pay? So will the pay gap between men and women increase? We have an opportunity to mitigate these possible risks. Our report also cites a concern with the pandemic that could widen student achievement gaps that currently exists because of disparities and attainment based on race, ethnicity and socioeconomic status. We're concerned that if the current online educational tools and instruction is ineffective, and if you continue to have these disparities in access to technology and broadband, we'll see additional disparities. And the two men. Gap has a longer term implications for students, careers and the health of our economy as a whole. So dressing achievement gap and these issues represents a huge opportunity to help students be more successful and ultimately create your possibilities and improve the economy. One additional insight that I'll note, read it Red hat, like many of our tech company peers or offering additional benefits to support our people, particularly caregivers, through the pandemic. So right now we're driving conversations across our entire global population, asking people about the support that would be most helpful for them over the medium and long term. For example, we're exploring emergency childcare through services like care dot com, which is available in most countries. We do business and supporting tutoring and other educational services That would help Children and families outside of the virtual classroom and a broader range of mental and physical well being support measures, including flexibility around work hours through relentless prioritization. We're very fortunate we had the opportunity and the resource is to offer these services, which now seems long overdue. But many employers can't afford this type of support. And while some families benefit, you know from this, a lot of it will just have to surface on what they need. But it's notable. So when businesses were picking up the slack of trying to close these gaps, this will potentially exacerbate the gap for socio economically challenged families. On this topic connects directly to the discussion in a report for the renewed focus on diversity and inclusion and dismantling systemic racism, Some entities will have the resources to lean in tow, action and response on some will not, and that creates additional risk. So with that for a deeper discussion of these issues, as well as changes in work, travel on mitigation migration patterns will hand it over to Professor Jim Johnson. Thank you very much, Mr Alexander. Ladies and gentlemen, I'm delighted to be with you. My name is Jim Johnson. I'm a professor of strategy and entrepreneurship in the Kenan Flagler Business School, director of the Urban Investment Strategy Center at the Frank called Koskinen is to the private enterprise. I'd like to set some context from my remarks by talking about how attractive the state of North Carolina is as a migration destination. Typically, when I give talks about this, I say North Carolina is all that and a bag of chips plus dip in terms of its attractiveness as a destination in 2017 every day, seven days a week during 65 days of the year, on average, we received 190 for newcomers. That's every day, seven days a week during 65 days of the year, newcomers from every other region of the country, newcomers from nearly every other state, newcomers from small, medium and large sized communities all over the country. As a consequence, we were the third most popular migration destination behind Florida and Arizona. We gained, UH, ah population net growth between 2010 and 2018 of 932,000 additional newcomers on top of 2.1 million between 2000 and 2010. My math says that's close to 300,000,003 million newcomers to our state since 2000. The newcomers eyes population is driven by people of color immigrants, uh, Asians and Hispanics growing at incredible rates doesn't mean that other people aren't coming. There are Everyone is coming, but those groups are driving growth in our population, and the newcomers, it is noteworthy, brought a migration dividend to the state. What does that mean? It means that the newcomers, on average arriving in our state, arrived with more per capita adjusted gross income than the people leaving our state and the people who live in our state. So they add consumer purchasing power, and they contribute to the tax base of our state. That's the good thing of being an attractive migration destination, growing diversity, increasing wealth And, unfortunately, that wealth and population growth is not evenly distributed in our state. If you look at the 932,000 people we've added since 2010 42% of that growth is accounted, concentrated in two counties, Wake and Mecklenburg. About 75% of that growth is Aziz, concentrated in 10 counties, and 95% of it is concentrated in about 23 counties. In other words, we're creating demographic winners and losers in terms of our, um, prosperity, drunk demographic, demographic driven prosperity. What that means is is that we have a number of counties 42 to be precise, that lost population between 2010 and 2019 and actually some of them have been losing population for quite some time. In fact, they're 22 counties in the state of North Carolina where death succeed, births and out migration exceeds in migration. When you're in that situation, more deaths and births and more out migration and in migration, you're literally a dying county. These are the counties that Jimmy and the Lease and David and Greg all we're referring to of those counties that have being left behind those air medically underserved counties where hospitals are at risk of closing or have already closed where are challenged by telemedicine because they have broadband issues. Uh, and they also challenged by digital literacy problems. Just because you bring telemedicine and broadband there, you have to do the education of the people how to use that work. So this these 42 counties where we're losing population, we have to figure out how to re engineer growth in those communities if we're going to thrive and prosper as a state, were on Lee a strong as our weakest link. The other thing that I like to do really quickly is talk about the demographic headwinds that I see coming they've been referred to. I want to add a little specificity to them. The first one, of course, is this geographic disparity. But there's several groups that I think we need to pay attention to if we're going to achieve equity and be more inclusive as a state. The first group vulnerable African American older adults They're the most vulnerable population in this country in the state. UH, 86,000 households with 175,000 people living in them. Most of them are older adults living either independently or as married couples. But increasingly a lot of them are multigenerational households where the older adults are taking care of their biological Children, adult biological Children and grandchildren, sometimes on a median income of about $15,000 per year. Living in a house the median age of about 40 years old on, it's just a disaster waiting to happen because those houses probably got all kinds of environmental risk of exposure, toe things that detract from your life and are probably responsible for the increasing vulnerability something to something like the covert 19 pandemic. So these African American older adult households are one of the one of the groups a second, vulnerable group has been referred to. Is the working poor population in North Carolina. People who work every day sometimes that full time jobs are increasingly at multiple part time jobs but do not earn enough income to living above poverty level existence. We've talked about those individuals in the hospitality sector in the retail sector and the like is being most wrong those essential workers, some of them in health care. But what most people don't realize is that Ah, significant share of the working poor and North Carolina and nationally more generally, our civil servants, police officers, fire personnel, E. M s personnel and, most importantly, public school teachers who do not earn enough money to having above poverty level existence. Uh, some of you may know I have a school for vulnerable Children in Durham. Two years ago, I had four homeless teachers at the school, all with master's degrees. And so when we start talking about the working poor, and I think David was referencing this when he talked about how this pandemic and the economic downturn is not gonna just impact blue collar workers. But increasingly, white collar workers were already there in terms of this working poor population, so we need to figure out a livable wage strategy for those folks. The other group, third group that I wanna talk about really quickly, is the less than college educated, 25 to 44 year old population that nationally is experiencing a demographic depression. It is argued. These are the people where this is the population in which suicides, alcohol and drug overdose deaths have been so high in three out of the last four years that it's affecting the life expectancy at birth. Last year alone, 157,000 people lost their lives as a function of suicides, alcohol and drug related death in this country in North Carolina that population 25 to 44 there 2.6 million and 932 22,000 of them have less than a college education in 2018 is just one indicator of the challenge here. For 45 million opioid pills were distanced in North Carolina and average of about 43 per person. But in some of our rural counties, between 70 and 110 pills per capita were dispensed. In 2018 we had 1718 overdose deaths, an average of five per day. 6764 hospital emergency department visits, an average of 18 per day. And 3723 now lots along reversals, an average of 10 per day. These are prime working age individuals that we're going to need to prepare all our economy. We gotta figure out how to deal with this demographic depression Among that population, My last two groups really quickly is the one that Miss Alexander was referring on. When you talk about kids, uh, in our education system, there's a whole cadre of young people who are experiencing what I call a triple whammy of geographic disadvantage. They're concentrated in counties where there's either little political or financial support for their education, and they come from neighborhoods characterized by hyper segregation and concentrated poverty and the schools that they're attending. Eight have aging infrastructure where mold, mildew, Radan and a whole range of other environmental risk or problem for them. This is the next generation of talent that has to prepare all our state, and we have to figure out, make sure that we ensure that they have a high quality education. The last point that I will make, but most people don't pay attention to is the huge sex ratio imbalance in higher education. If you look at a higher the composition of higher education institutions in this country, the sex ratio has been 60% female, 40% male for a decade, I assure you. At birth, the sex ratio is not 60 40. It's more like 50 50. And so the question becomes What? Where are the men? In 2019 the U. N C system was 42% male, and the, uh, predominantly white institutions was 44% male. The minority serving institutions and historically black colleges were 35% male, and the system granted 45,000 more degrees tow women than to men between 2014 and 2019. Ladies and gentlemen, it is difficult to have stable families to Werner households, the general to limit degenerate, the kind of wealth that we are accustomed to talking about in this country, when you have that kind of enormous sex ratio imbalance in higher education, we need to figure out how to fix that problem. This has enormous implications for family formation, marriage and a whole range of other things in our society. At the end of the day, ladies and gentlemen, we're gonna win on talent and we have to fix these problems. If we're going to rest assured that we're going to remain a highly attractive place to live, do business, play and work on a daily basis. Thanks so much on our return it toe Mackenzie. Great. Thank you so much for Johnson and thank you to all of our Panelists. For those terrific insights, we are going to move into the Q and a portion of our briefing at this time. So for those who have joined us via webinar, you are welcome to submit your questions using that Q and a function there at the bottom of your screen. For those joining us by phone, you can email me your questions at Mackenzie Underscore Bad Keenan dash flagler dot unc dot e d. U. I've already received a few via email, so we're gonna get started with those. The first is for Jimmy. With so many hospitals operating at a loss, do you think this will present opportunities for the health care and insurance industries to finally work together to make health care more affordable? And if so, what are some of the changes we might see? Great question. Eso, for starters, that health care and insurance industries are aligned. They both benefit from reduced cost of delivery of care and increasing access to quality care, which is an equally important part of this argument. Telemedicine can help and eh? So what changes might we see? I mean, I think now that the the seal has been broken on telemedicine. Um, certainly, for routine care, you may see consumers start to demand it, and they should. We would we should encourage them to do so. And we should encourage providers and insurers to support a migration thio telemedicine, where it's feasible. The second thing I would say is that federal and state leaders need to commit to reversing the trend of the decline of rural hospitals. Um, this is going to take federal and state dollars, and we need to commit to do it. Um it's ah, medically underserved communities. As Professor Johnson said, uh, are part and parcel of racial disparity, and it needs to change. That needs to change now. The third thing I would say is that public health has come to the fore, and this is gonna be somewhat self serving because I'm a proud graduate of the U. N. C. School of Public Health and also the business school. But public health has come to the fore during Copa, and we should keep it there. Uh, public health professional professionals have been on our TVs during the entire crisis. Uh, they've been in our living rooms. They've been educating us. But now, once we have tackled cove, it and we will we need to change the discourse Mawr to health, education and health literacy again. As Jim Johnson said, public health professionals have shown their value, their quality, their integrity during this entire crisis and thio to return them Thio the shadows after Kobe has passed would be a lost opportunity. So I would say number three, in my opinion again, changing the discourse from Cove it and pandemic and crisis to health, education and literacy would be a great seized opportunity. It's right, Perfect. Thank you so much, Jimmy. Um, our next question is for for David eso David. The question that came in is, could the shift toward a lower risk tolerance among investors actually push some to focus on smaller local opportunities on the assumption that they could build closer relationships with these types of companies? Well, I think it can. But absent from the current public discussion about this has to do with investor expectations. And when losses go up, expectations for returns go up and it's a it's a fundamental, and that's what I meant by. We're gonna have to have more public private partnerships to augment that otherwise abject for profit model to deal with some of the Lord. It's It's like low income housing. It needs public support. And so I think, from a private equity standpoint, and from a investment standpoint, we're gonna need to have more public private partnerships to fuel growth in smaller companies that may not have the return profile of larger investments. Great. Thank you so much. David. Um, the next question is for Julissa. Melissa, you mentioned that not all companies have the funds to offer flexibility and additional support employees e get those companies and their employees as they work to stay afloat. McKenzie. I'm so sorry, but I lost your audio there. Could you repeat that? Yes. My apologies. Can you hear me? Okay, now that's better. Yeah. I'm just gonna go in and out. Oh, sorry. My Yeah, technology struggles of the theme of 2020. So the question here is, um, you mentioned that not all companies have the funds. I had to offer flexibility and additional supports to employees during the pandemic. What guidance would you get to those companies into their employees as they work to stay afloat? Hmm. That's a tough question. So there are disparities that we wanna make sure, you know, that we try to mitigate as much as possible. And so the one thing that I think that every company can do is to think about itself as being, you know, kind of Ah, corporate human humanitarians. I think that this this pandemic has really shifted the way that we have relationships between people across companies and our opportunity to really live into being our full Selves, being transparent about the challenges that we all face. Whether we're in the management side or where a worker and um and just really demonstrating that, you know, there is a great human kind of ailment going on right now and that together, working together and collaborating versus creating more of us versus them situation. I think that's the best way that companies can work together thio with their people to be able to get through the crisis. That's great, Thank you so much. Our next question is, Is back to Jimmy um, Cove. It has already interrupted health care for other issues. As we focus on treatment and prevention, namely a vaccine. Will it also disrupt research and treatment for other diseases such as AIDS and cancer? And what could be the concert? One says, If that have happens, another really good question. So the unfortunate answer is, yes, it is. It is going to be disruptive. With limited resource is to put towards healthcare R and D and the infrastructure required for pharmaceutical and healthcare research and development. Um, a diversion of resources towards vaccine development and health care development and clinical research effort for experimental therapies for, um, Cove. It certainly are going to divert resources and effort on debt will set us back sadly, in some of the other research and development efforts that we have underway, Um, the yacht, the impact of that, um, will, uh, will trickle down on beer will probably be felt in the coming years. It's very hard to recover from these sorts of things that one example would be the clinical research industry. So clinical trials and clinical trials suffering Thio are struggling to enroll participants right now, um, either because people are afraid to come into a health care facility or because the health care providers that are needed to run those clinical trials are not available because they're they're being diverted into other functions within the hospital or hospital or within the health care system. Um, we'll make it so that readouts on clinical trials on durability to get their their new medicines approved will be extended. Some trials will be disrupted, uh, for for a long period of time and those some of those trials that have been disrupted that require longitudinal observation will not be able to be resumed, so the clinical development and research and development piece will be quite disruptive. Um, so unfortunately, I think that's not the most positive answer, but a sad reality of what we're going through right now. Thank you for that, Jimmy. It's helpful. Our next question is for for Jim. So, Jim, uh, this one. I'm very interested to hear your response on this one. I know that you you put out some recent research on pandemic migration so eager to hear you respond to this question. Uh, the question is, North Carolina urban areas may gain from in migration that many of these areas already have problems with gentrification and with underserved population. Scene for south what could be done to keep these populations in their homes and their communities as more and more folks, um, influx amid the panda. Excellent question. Fantastic question. Um, what's important is, uh, creating and for these communities to create an equity to kit to make sure that people have, uh, equitable access to opportunities that we, uh, put into place policies, practices and procedures that stem the tie of economic and residential dislocation, while at the same time figuring out how to maintain the attractiveness of these communities to newcomers on dso. Uh, the big emphasis is on thinking about the policies and procedures we call it the equity to get If we just finished one for the city of Durham. Uh, in fact, it's called built toe last, where we lay out a whole Siris of policies, procedures and practices that need to change. You know, one of the big things that if we want to create economic opportunity that enables people toe stay in their homes and in their communities, their whole Siris of workforce rules that need to be changed, particularly for the licensing occupations. If and we're one of the most strenuous states when it comes to licenses, if you've had a brush with the law, there are many occupations. Even if you have paid your dues by doing your time, as it were that when you get out, you cannot get a license to practice in that particular trade. And so there are lots of policies like that that have to change if we're going Thio, create more equitable and inclusive societies. And if we wanna build businesses and sustainable small businesses in those communities, we have to look at as Greg talked about at the outset, we have to look at contracting and procurement and make that process farm or inclusive and echoed all in communities because it is not very echoed, all inclusive at this particular point in time. So their whole Siris of policies and procedures that need to be put into place, we call it the equity to Kit Andi. I think that that's why increasingly many cities around the country are putting into place to achieve a more inclusive society. Excellent. Thank you so much, Jim. Our next question is for the whole group, so we can do a round robin on this one. Um, based on the report's findings, what should voters be asking of elected officials and other policymakers as we head towards the historic November re election? So I'm gonna open that one up for the group. I'm happy to take a first crack at it. I think there was ah lot of hope that we were gonna have some additional stimulus federal stimulus. Those prospects seem to be fading, but I do think there's an important need for some additional stimulus. My personal opinion is that probably didn't need to be a large, is what the the Democrats were initially proposing but probably needs to be more than the last offer that I saw the Republicans proposing. So there probably is some middle ground in there that would be good for the economy. And this this really needs to be focused less on sort of the emergency lock down type measures of handing out, um, you know, generous benefits to make sure people can can withstand the kind of short run pandemic and more towards a longer term structural approach towards what the economy needs going forward. Um, so some of this will be around, uh, in my opinion, should be around. Uh, you re Skilling. People have been dislocated. I'm currently I think it should also be focused towards making sure that people are able to get back to work quickly because of the disruption, thio, education and child care. I think one very obvious thing to do would be provide additional support to states. Really, One of the worst things we can do right now is have states be cutting their budgets, which is only going to reinforce some of the the negative economic consequences of the pandemic. One thing I would love to see happen is we have record unemployment among recent college graduates right now and the those air eager, bright, talented students that could be put to work in schools or even remotely, um, in assisting teachers and education, which is just a tremendous, tremendous need right now. And there is tremendous inequality. Um, that is going toe not not just persist, but get worse because of gaps and educational attainment, given the current situation that we're in. So I'd love to see some solution around that from policymakers assed quickly as possible. Can see my question is quick. So I'll ask it, which is, uh, what aggressive actions are you going to take to make health care more accessible and affordable, especially in medically underserved communities? And how are you going to pay for it? What I'll kind of pick up on that. And there's a There's an enormous opportunity that I offend someone with this because this will sound partisan, but I kind of go back to where I finished off in the category of the government working with the private sector. When we solve the pandemic, it will be in no small part because the federal government leveraged its capacity to invest in private companies who had the talent and the incentive to get it done. Thio sort of get up, get the government out of the way. And for 40 or 50 years, among the most intractable problems we've had in this country, the government has tried to do it by itself and without intending to be partisan, we've gotta find other opportunities to solve rural healthcare. T to solve retraining. Um, with the government working hand in hand and I feel like for whether Democrat or Republican or not, the government has been the enemy of private enterprise. And that's not what built this company, this country rather. So I would ask them, Where will you leverage the model of the government working hand in hand with private enterprise to solve these problems? And I loved, uh, Jim Johnson's. The equity tool kit with the equity government can help with the equity, but they then need to set some thoughtful rules and get out of the way and let the private sector execute. David, I agree strongly with that the public private partnership peace and the um, and what was written in the Seven Forces document about that, I think is really important, and it's something that we should focus on a za country and it is a state, Um, the public private partnerships, especially in healthcare and healthcare delivery, will be essential. McKenzie I would add that I think that we need to We need to advocate for what I call resiliency, enhancing strategies that enhanced the competitiveness and tracked and attractiveness of our communities. We have a strategic opportunity, a propitious opportunity to facilitate those. And I don't like partnerships. I call them mutually beneficial strategic alliances, because I think the only way this is gonna work is that we ensure that there's a return on the investment for every party party involved in these relationships. So how do we create create a system where we generate mutually beneficial strategic alliances across the for profit government, nonprofit sectors, toe fix spaces and places in our society and in our communities? Uh, all of that infrastructure that needs to be fixed that is, taking years from people's lives, whether it be sick buildings, you know, employment centers, six schools, all those things. Those are opportunities for business development and job creation in our society. Uh, how do we deal with climate justice in this state? How do we build resilient communities? Let's look at entrepreneurial approaches to poverty alleviation, job creation and community development in our society. At the end of the day, we all win because it's a healthier, more attractive and viable set of communities. I think we have the the wherewithal to do that. Whether we have the will is a different, uh, issue. But I think it's it's a clear avenue to success for us or resiliency. I'll add that, you know, we could have a huge opportunity. Thio support long term structural changes in the way we think about education. You know, Pandemic has been kind of the great equalizer in that everyone as at home and so the school environment itself could kind of be out of the way in terms of the impediment. But we need to invest in the capabilities of our teachers to be able Thio, help create capabilities with students in a virtual environment and also the technology, and the access has got to be addressed. But it's a huge opportunity for us toe move away from what has been in our our way in the past. I think that's right. That's great. I know that we're right at time. So at this point, I'd like to thank all of our Panelists for their insights. I'd like to thank all of our attending you for the thought provoking questions. I know we didn't get to all of the questions, so I apologize. But for those of you who would be interested in continuing the conversation with any of our Panelists, you're welcome to reach out to me. I'd be more than happy to set up an interview again. I would I would invite you all to visit CNN institute dot unc dot e D u slash seven spelled out S E v e n forces for a look at the full report as as well as the supplemental report offering those additional insights that, um, Jermaine, specifically to the here in North Carolina. Thank you again So much. Everyone for attending. Thank you for your time. And thanks again to our panel. They look forward to any stand