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13 <br /> pandemic.2 They have used the financial support provided by governments during the pandemic <br /> to take time to improve their skills and put themselves in a position to pursue better-paying jobs <br /> with more long-term advancement possibilities. Sectors like technology, health care, and some <br /> professional fields would be targets of these individuals. <br /> Obviously, individuals who improve their skill set and earnings contribute to a larger and <br /> more productive economy. But how will those firms and sectors they left cope with the lack of <br /> labor? There are two options. One is for the firms to significantly increase wage rates and <br /> benefits to enable them to better compete for workers. But there are limits to this response, <br /> especially if it results in higher prices for their products and services. Alternatively, the firms can <br /> implement greater use of labor-saving technology and automation. Examples already being used <br /> include robots delivering meals to tables in restaurants and kiosks for ordering at fast-food <br /> outlets. Ironically,prior to the pandemic many economists worried technology and automation <br /> would create higher unemployment for workers in the sectors. Now, the technology and <br /> automation may be necessary to replace vanishing labor. <br /> FEDERAL BACK-UP FOR HOUSEHOLDS <br /> The federal government provided an unprecedented amount of financial support to the <br /> economy during the pandemic. Once all the funds are deployed, the federal aid will total $6 <br /> trillion. North Carolina is on pace to receive $80 billion. <br /> The purpose of the support was twofold. First was to help households, businesses, and <br /> institutions survive the pandemic and continue functioning. Particularly for households, no one <br /> wanted to see destitute conditions overcome millions—likely tens of millions—of people. The <br /> second goal was to prevent the economy from collapsing and plunging the country into a deep <br /> and long recession. <br /> The data suggest these objectives were met. Although there was a deep recession in the <br /> second quarter of 2020, it was the shortest recession on record and was followed by an equally <br /> sharp rebound in the third quarter of 2020. <br /> Figure 5 shows the path of two key measures of the North Carolina economy, personal <br /> income and retail sales. Personal income (left side of graph) dipped in early 2020, but then <br /> stabilized and grew sharply at the end of 2020 and into early 2021. Retail sales (right side of <br /> graph) show monthly trends in retail sales for 2019, 2020, and early 2021. Comparing 2019 and <br /> 2020, retail sales in 2020 closely tracked the same sales in 2019 in the first half of each year. <br /> But in the second half of the years, retail sales in 2020 trended significantly higher than sales in <br /> 2019. There is a similar finding for 2021 and 2020. For the first five months of the year, retail <br /> sales were noticeably higher in 2021. The federal aid therefore appeared to provide significant <br /> support for the North Carolina economy. <br /> Z Heather Long and Scott Clement, "Nearly a Third of Workers Under 40 Considered Changing Careers During the <br /> Pandemic," The Washington Post,August 16, 2021. <br /> 7 <br />