More doses will be available each week as manufacturing ramps up, even as state and local officials complain they don’t have the funds needed to do mass vaccinations
The federal government plans to send 6.4 million doses of pharmaceutical giant Pfizer’s coronavirusvaccine to communities across the United States within 24 hours of regulatory clearance, with the expectation that shots will be administered quickly to front-line health-care workers, the top priority group, officials said Tuesday.
Gen. Gustave Perna, who oversees logistics for Operation Warp Speed, the Trump administration’s effort to speed up treatments and vaccines, told reporters that state officials were informed on Friday night of the allocation, which is based on each state’s overall population.
The amount would cover only a portion of the nation’s 20 million health-care workers, let alone the U.S. population of 330 million. But Perna said “a steady drumbeat” of additional doses will be delivered as manufacturing capacity ramps up in each successive week.
With increased prospects that federal regulators will authorize the Pfizer vaccine on an emergency basis as early as mid-December, and that the first shots could be administered before the end of the year, Operation Warp Speed has begun to release more details about the massive and complicated distribution effort to immunize tens of millions of Americans.
Covid-19 vaccine distribution and shipping: How it will actually work
U.S. government officials are on track to have 40 million doses of vaccines from Pfizer and a second company, biotech firm Moderna, by the end of the year, enough to vaccinate 20 million people. (Each vaccine requires two doses.) It is likely to be April before the general public begins to get vaccinated.
The initial batch of 6.4 million doses also includes vaccines that would go to five federal agencies — the Bureau of Prisons, the Defense and State departments, Indian Health Service and the Veterans Health Administration — that receive allocations directly from the federal government.
U.S. government officials are on track to have 40 million doses of coronavirus vaccines from Pfizer and a second company, biotech firm Moderna, by year's end, enough to vaccinate 20 million people. (Joel Saget/AFP/Getty Images)
States and territories now have the necessary information to “plan and figure out where they want the vaccine distributed” in the first shipment, Perna said. States are supposed to designate their top five sites capable of receiving and administering the Pfizer vaccine, which must be stored at a temperature of minus-70 Celsius (minus-94 Fahrenheit), and has exacting handling protocols. The ultracold temperature is significantly below the standard for most vaccines of 2 to 8 degrees Celsius (36 to 46 degrees Fahrenheit).
Many states have designated large hospital systems to be the first places to receive vaccines because they have ultracold freezers and can efficiently vaccinate many people. The minimum order for the Pfizer vaccine is 975 doses; for Moderna, with a storage temperature that does not require such freezers, the minimum order is 100.
Once a vaccine is cleared by the FDA, an independent advisory panel to the Centers for Disease Control and Prevention — the Advisory Committee on Immunization Practices — will hold a public meeting within 48 hours to vote on final recommendations for the vaccine’s use and who should get the first shots.
Health-care workers will be the first priority, the group has said. About 3 million residents of long-term care facilities are also likely to be included in that first phase. Next in line will be an estimated 87 million other essential workers, including first responders, teachers and grocery workers; more than 100 million adults with high-risk medical conditions; and about 53 million adults over the age of 65.
Within 24 hours of FDA action, doses will be “pre-positioned” at the sites designated by each state to give the shots to the first groups.
Pfizer has been conducting dry runs of each step, from vaccine delivery to opening Pfizer’s GPS-tracked special containers to vaccine storage, Perna said. The company began working last week with four states — Rhode Island, Texas, New Mexico and Tennessee — to familiarize personnel with storage and handling requirements. These dry runs do not include actual vaccines, or the dry ice that will be used to keep the vials cold. Additional rehearsals in coming weeks will include dry ice, a federal health official said, speaking on the condition of anonymity because they were not authorized to speak publicly.
Those “lessons learned” are being shared with other officials, Perna said. There was “initial hesitation” from some personnel at the sites, he said, but “we expect to see growing confidence in people that are using it.”
Americans will receive the vaccine free. The federal government is paying for much of the delivery and vaccine administration costs. But funding remains a big issue for state and local officials, who are asking Congress for at least $8 billion for vaccination efforts; to date, $200 million in federal funds has been sent to state, territorial and local jurisdictions to help them prepare. Federal officials are sending another $140 million in December.
Jeff Duchin, a top official at the Seattle and King County health department, said the more than $10 billion in taxpayer dollars spent on development of coronavirus vaccines by Operation Warp Speed was appropriate.
“But it’s been more like Operation Status Quo with respect to providing the federal funding needed for state and local health departments to actually get vaccine to the population, including the initial priority populations and ultimately, to as many people as possible,” he said in an email Tuesday.
State and local officials say much of the critical planning and implementation work needed for distribution is not adequately funded or staffed. That work includes planning with a broad range of health-care providers for the necessary training and upgrading information systems to vaccinate hard-to-reach and undeserved populations, Duchin said.
Health-care providers also need to track allocations and vaccinations administered, and ensure people come back for second doses. Public health officials also need to do outreach with local communities that are hesitant about getting the vaccine, he said.
“Tens of millions of dollars are needed for this work in our county and state,” he said. “In addition, this work is tasked to local and state public health departments and workers, who have been grappling with this pandemic nonstop for months and are running on fumes.”
Lena H. Sun
Starting November 1, 2020, you can log in to the sites below, fill out an application, and enroll in a 2021 Marketplace health plan.
Enroll by December 15, 2020, and coverage starts January 1, 2021. 2021 plans and prices will be available to preview shortly before November 1.
Still need 2020 coverage? Open Enrollment for 2020 plans is over. If you still want coverage for the rest of 2020:
See if you qualify for a Special Enrollment Period due to a life event like losing other coverage, getting married, or having a baby.
Most New York City childcare centers, like this one, were required to shut down from April to mid-July
MARCH 27 WAS HANDS down the worst day of Cathleen Farrell’s professional life. COVID-19 had hit the country like a tsunami a couple weeks before, prompting childcare centers, including the three she owns and operates in Medfield, Mass., to close until further notice. For two weeks, Farrell had continued to pay her 26-person staff, hoping the crisis would be over soon. But by the end of that month, her finances had become untenable. She reluctantly assembled her employees to deliver the grim news: everyone would be furloughed indefinitely. On the video call with her staff, Farrell cried.
“I felt like I was doing it to them,” she says, her voice cracking in the retelling. Stopping people’s paychecks during a period of economic uncertainty cut against how she saw herself. “I’m a caretaker,” she says. “I take care of people.”
But Farrell’s decision to furlough her staff was just the beginning of her financial woes. In order to reopen her day-care centers in July, shortly after Massachusetts gave childcare directors the green light, she had to retrofit her facilities to keep kids safe and quell their parents’ fears. That meant purchasing thousands of dollars’ worth of new equipment: 18 air purifiers at $200 a pop; an $800 electrostatic sanitizing device; half a dozen $369 strollers to keep toddlers farther apart; and outside play equipment and tents that set her back well over $10,000. Farrell also doubled the frequency at which professional cleaners visited her facilities and began paying her staff more in overtime, in part because they had to pick up additional hours as their co-workers took more sick days. (Farrell sends home any employee who is not feeling 100%.)
Farrell was able to defray some of these costs with a $156,000 federal Paycheck Protection Program loan and a $100,000 federal Economic Injury Disaster Loan (EIDL) from the Small Business Administration. But seven months into the pandemic, that cash is nowhere near enough. In all, she tallies her losses to exceed $390,000. “Money is flying out the window,” she says. “It’s been heart-wrenching to see a thriving business collapse.” Enrollment at her facilities has yet to rebound. For weeks, her largest childcare center operated at 20% capacity. Until October, Farrell couldn’t even afford to pay herself.
Not that it provides much solace, but Farrell is far from alone: 86% of childcare providers reported serving fewer children than they were before the pandemic, and 70% said they’re incurring “substantial” new operating costs, according to a July survey from the National Association for the Education of Young Children (NAEYC). Across the industry, enrollment has plummeted by two-thirds, while costs continue to soar. Day-care managers must hire more staff to handle smaller class sizes, spend more on legal fees to navigate the process of obtaining government loans and abiding by state regulations, and shell out more for sanitation supplies and cleaning personnel. Unless the government invests significantly in the industry—and soon—NAEYC predicts that 40% of the childcare businesses it surveyed will shutter. Permanently.
THE DEATH of the childcare industry as we know it may have a domino effect across the economy. If these businesses fail, owners like Farrell will face hardship, but so will the roughly 1.1 million people—96% of whom are women and 40% of whom are women of color—who work as caretakers. Mass closures across the industry will also have a ripple effect on parents, who depend on day-care centers to work outside the home. Without access to affordable and convenient childcare, many parents—and the burden falls disproportionately on mothers—will be forced to quit their jobs. It’s no longer a question of whether this will happen, but how pervasive it will be. From August to September, 865,000 women dropped out of the labor force, according to the latest jobs report; 216,000 men did too. This mass exodus is already hindering women’s advancement, exacerbating gender income inequality and putting a drag on the U.S. economic recovery. “If we had a panic button, we’d be hitting it,” says Rachel Thomas, the CEO of Lean In. “We have never seen numbers like these.”
Mass closures of day-care centers may also warp the childcare industry in the long term, experts say. Newly unemployed caretakers, who tend to make low wages in demanding settings, may never return to their profession, and childcare-center owners may choose to abandon their businesses for more lucrative ones. Families, meanwhile, may opt to keep a parent home to watch the kids. “Absent our collective investment in childcare, there really won’t be an effective community recovery,” warns Lynette Fraga, the CEO of Child Care Aware, an industry research and advocacy organization. “If we aren’t supporting childcare providers, there won’t be childcare to go back to.”
MILLIONS OF AMERICAN PARENTS, who already spend an average of about $10,000 per toddler per year for childcare, may wonder why their day-care center is in such dire financial straits. The answer, in part, is simple economics: operating a day care requires a lot of overhead—rent, utilities, staff salaries and equipment—while profit margins are relatively slim. COVID-19 has made those ratios even worse. “This was an industry that was really struggling before the pandemic,” says Simon Workman, the director of early-childhood policy at the Center for American Progress (CAP). “If you were struggling to get by before, then the chance of you closing now is pretty high.”
Lauren Brown, the director of World of Wonders Childcare and Learning Center in Marysville, Ohio, says her center spent 300% more on cleaning costs over the summer, while grossing $20,000 less in June and July compared with previous years, because of reduced enrollment. Annette Gladstone, the co-founder of Segray Eagle Rock preschool in Los Angeles, tells a similar story. She’s struggling to pay rent on her center’s building in part because many of the children her company usually cares for have yet to re-enroll. Segray Eagle Rock normally has 177 kids; in mid-October, it was still serving only 35 to 40 kids per day. And again with the costs: despite the blistering Southern California heat this summer, Gladstone kept the windows open and the air-conditioning on because the CDC indicated the practice could increase ventilation, thus decreasing viral transmission.
Stringent government regulations designed to safeguard child safety and development are also a factor. Most states require that day-care centers maintain high adult-to-child ratios and ample square footage. In some places, day-care operators are required to hire staff trained in early-childhood development. These measures are important. Research shows that early-childhood education shapes everything from adult brain volume to reading proficiency. “That has an impact on our future labor force and their economic potential, which ultimately is tied to our country’s economic potential,” says Katica Roy, a gender economist. But these requirements also have the effect of making day cares less nimble in the face of economic crises.
While other enterprises can quickly cut down on costs by downsizing, going remote or skimping on staff, day cares don’t have that luxury. Caretakers who need to quarantine or call in sick also pose outsize problems for their bosses. Since most day cares are not currently allowing parents to enter the buildings, centers need to have enough staff to bring children inside in the morning and back to their parents outside in the evening. They also need to have enough staff to watch the children throughout the day—but not so many that they can’t cover payroll and other expenses, like purchasing personal protective equipment. That delicate calculus can create huge logistical problems for both childcare operators and the working parents who rely on them. “If I don’t have enough staff to operate safely,” says Meredith Kasten, who runs Early Childhood Center in Greensboro, N.C., “then I have to close the whole building.”
Even in the best economic times, childcare centers are hardly big moneymakers. The average day-care operator grosses $48,000 a year, according to the Bureau of Labor Statistics, while standard childcare workers make roughly $24,000. Usually these jobs come with little or no paid time off or other benefits. Only 15% of childcare workers receive employer-sponsored health insurance, according to a 2015 Economic Policy Institute report. (The lack of health care benefits can be problematic under any circumstances, but the stakes are particularly high during an ongoing pandemic.)
As COVID-19 restrictions loosen in some states, and parents begin to send their kids back to day care, some childcare operators have struggled to hire back their laid-off staff. Part of the reason has to do with the industry’s dismal compensation. Some childcare workers actually saw their incomes increase when they lost their jobs, thanks to the extra $600 per week in unemployment pay provided by the CARES Act—a provision that expired in July. This summer in Florida, an unemployed worker could have received as much as $875 per week from both state and federal unemployment benefits. That’s close to twice what the average childcare worker makes normally.
But part of the problem facing child-care operators looking to rehire staff may also be widespread instability across the industry. The shaky economics of running a day-care facility combined with the uncertainty of the ongoing pandemic, which continues to worsen in many parts of the country, makes employment in the sector unsavory to some. It’s unclear if providers who are hired back now will still have a job in a month or a year. According to CAP data provided to TIME, the costs of providing center-based childcare have increased by an average of 47% since before COVID-19. In California, costs have jumped 54%, and in Georgia, they’ve skyrocketed 115%.
Home-based childcare facilities, which served up to 30% of infants and toddlers before the pandemic, are also suffering. Such facilities usually enroll fewer kids, which some parents may see as a benefit during COVID-19. But the sector has been in decline for years. From 2005 to 2017, the number of small licensed family childcare businesses dropped 52%, according to a government-funded report.
Ellen Dressman, the founder of Frog Hollow Nursery School, a home-based day care in Berkeley, Calif., has been in business for more than two decades and recruited her children to join it too. But when her state permitted childcare businesses like theirs to reopen over the summer, only two families planned to return—not enough to cover operating costs. If Dressman, 65, and her daughter lose the business, which covered their mortgage, they could lose the home that the day care operated out of, too. “I didn’t realize how much the industry really needs public support until now,” she says.
THE CALAMITY currently facing the childcare industry was both predictable and preventable, some experts say. After all, private day care is intrinsic to the functioning of the American economy. Parents of small children cannot participate in the labor force without childcare of some kind. For millions of American parents, that choice is stark: either they pay for private day care or they choose to stay home, thus giving up their income. But at the same time, American society has not rewarded the childcare industry for the vital role it plays. While Americans agreed long ago that children have a right to a public-school education—to which even nonparents contribute in taxes—there is no similar consensus on sharing the cost of caring for smaller kids.
The disparity is clear. While public-school administrators have also grappled with new COVID-19-related safety protocols and increased expenses, they are buttressed by government funding. Day cares aren’t—and are therefore left to sink or swim. Marcy Whitebook, the founding director of the Center for the Study of Child Care Employment at the University of California, Berkeley, says there’s no good reason why the U.S. does not provide public support for childcare in the same way other industrialized nations do. “Because we’re asking parents to foot the bill and it’s so expensive,” she says, “it means that the only way to really make that happen is to essentially exploit the people who are doing it.”
FARRELL, FROM MASSACHUSETTS, is acutely aware of that dynamic. After months of exorbitant expenses, she’s worried about the viability of her smallest childcare center—and about her retirement plans. Currently 57, she’d planned to bow out in the next eight years, but now worries she will have to stick around longer to pay back the debts she’s accrued. “Knowing that I owe that EIDL money back scares the hell out of me,” she says. She has 30 years to repay the loan, but can’t fathom working into her late 80s to do so. “I don’t even know if I am going to be on this earth in 30 years,” she adds.
Short of the pandemic miraculously ending and enrollment levels recovering, there’s a glimmer of hope for childcare-center directors like Farrell. On the presidential campaign trail, former Democratic candidates including Senators Kirsten Gillibrand and Elizabeth Warren floated tax breaks and universal childcare plans that would have pumped money into day-care centers while also reducing the cost of care for working-class families. Democratic presidential nominee Joe Biden has since taken up that mantle, calling for tax credits and subsidies that would ensure families earning less than 1½ times the median income in their state aren’t having to spend more than 7% of their incomes on childcare.
There’s also been some movement in Congress. In July, the Democrat-led House passed a bill appropriating $50 billion toward the Child Care Stabilization Fund to provide grants to childcare providers. But that bill is unlikely to pass the GOP-controlled Senate, and even if it did, it probably wouldn’t be enough to save childcare centers that are already underwater. The Center for Law and Social Policy estimates the industry would require nearly $10 billion per month to survive the pandemic, according to an April report. “It is short-term triage, but it may be too late,” Whitebook says of the House bill for emergency funds. “We’re in a fast-moving vehicle toward destruction of a lot of people’s lives, livelihoods and health. And kids are in that vehicle too.”
By Abby Vesoulis
Here’s what you need to know:
On June 8, 2020, the National Bureau of Economic Research (NBER), which has official responsibility for determining U.S. business cycles, announced that February 2020 marked the end of an expansion that began in 2009 and the beginning of a recession.1 This was no great surprise considering widespread business closures due to the coronavirus pandemic and the resulting spike in unemployment, but it was an unusually quick official announcement.
The NBER defines a recession as “a decline in economic activity that lasts more than a few months,” so it typically takes from six months to a year to determine when a recession started. In this case, the NBER’s Business Cycle Dating Committee concluded that “the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy,” warrants the designation of a recession, “even if it turns out to be briefer than earlier contractions.”2
Another common definition of a recession is two or more quarters of negative growth in gross domestic product (GDP), and it’s clear that the current situation will meet that test. The U.S. economy shrank at an annual rate of 5% in the first quarter of 2020 — a significant but deceptively small decline, because the economy was strong during the first part of the quarter.3
The first official estimate for the second quarter will not be available until July 30, but the Federal Reserve Bank of Atlanta keeps a running estimate that is updated based on incoming economic data. As of June 26, the Atlanta Fed estimated that GDP would drop at a 39.5% annual rate in the second quarter.4 By comparison, the largest quarterly drop since World War II was 10% in the first quarter of 1958, followed by 8.4% in the fourth quarter of 2008.5
Most economists believe that GDP will turn upward in the third quarter as businesses continue to open.6 But with the extreme decline in business activity during the first half of 2020, it will take sustained growth to return the economy to its pre-recession level. In its June economic projections, the Federal Reserve Open Market Committee projected a 6.5% annual drop in GDP for 2020, followed by 5.0% growth in 2021 and 3.5% growth in 2022.7 The simple math of these projections suggests the economy may not return to its 2019 level until 2022.
By the Letters
Economists traditionally view economic recessions and recoveries as having a shape, named after the letter it resembles.
V-shaped — a rapid fall followed by a quick rebound to previous levels. The 1990–91 recession, which lasted only eight months and was followed by strong economic growth, was V-shaped. This type of recovery would require control of COVID-19 through testing and treatment, a quick ramp-up of business activity, and a return to pre-recession spending habits by consumers.8–9
U-shaped — an extended recession before the economy returns to previous levels. The Great Recession, which lasted 18 months followed by a slow recovery, was U-shaped. If COVID-19 takes longer to control and the economy does not bounce back as expected in the third quarter, the current recession could be prolonged.10–11
W-shaped — a “double-dip” recession in which a quick recovery begins but drops back sharply before beginning again. The U.S. economy experienced a W-shaped recession in 1980–82, when a second oil crisis and high inflation triggered a brief recession, followed by a quick recovery and another recession sparked by overly aggressive anti-inflation policies by the Federal Reserve. This type of recession could occur if a second wave of COVID-19 forces new business shutdowns just as the economy is recovering.12–13
L-shaped — a steep drop followed by a long period of high unemployment and low economic output. The Great Depression, which lasted 43 months with four straight years of negative GDP growth, was L-shaped. This is unlikely in the current environment, considering the strength of the U.S. economy before COVID-19 and the unprecedented economic support from the Federal Reserve. However, it is possible if the virus is not controlled.14–15
In the June Economic Forecasting Survey by The Wall Street Journal, which polls more than 60 U.S. economists each month, 13.8% of respondents thought the recovery would be V-shaped, 8.6% expected it to be W-shaped, 6.9% indicated it would be U-shaped, and just 1.7% thought it would be L-shaped.16
The vast majority — 69.0% — believed the recovery would take a “Nike swoosh” shape, which suggests a sharp drop followed by a long, slow recovery.17 This view factors in the possibility that businesses may be slow to rehire, and consumers could be slow to resume pre-recession spending patterns. It also considers that some businesses may be impacted longer than others. Airlines do not expect to return to pre-COVID passenger activity until 2022, and movie theaters, beauty salons, sporting events, and other high-contact businesses may struggle until a vaccine is developed.18
Adding to the prognosis for a slow recovery is the fact that the rest of the world is also fighting the pandemic, including many countries where growth was already more sluggish than in the United States. And if the virus resurges in the fall or early 2021, the recovery may turn jagged with significant setbacks along the way.19
While the general consensus suggests that the duration of the actual recession may be brief, it is much too early to know the true shape of the recovery. However, the economy will recover, as it has in even more challenging situations. All of these projections indicate that a key factor in determining the shape of recovery will be control of COVID-19. Beyond that, the underlying question is whether the virus has fundamentally changed the U.S. and global economies.
1–2, 8, 10, 12, 14) National Bureau of Economic Research, June 2020
3, 5, 15) U.S. Bureau of Economic Analysis, June 2020
4) Federal Reserve Bank of Atlanta, June 26, 2020
6, 16–17) The Wall Street Journal Economic Forecasting Survey, June 2020
7) Federal Reserve, June 10, 2020
9, 11, 13) Forbes Advisor, June 8, 2020
18–19) The Wall Street Journal, May 11, 2020
This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2020 Broadridge Investor Communication Solutions, Inc.
Terence S. Phillips
is the Managing Partner/
Our financial newsletters are designed to provide helpful information on a wide variety of financial topics. Simply click on one of the newsletter topics to read the article in its entirety.
Subscribe To Our Newsletter