Social distancing to impede the coronavirus has severely impacted the local and national economies, prompting government officials in Washington and Washington, D.C., to ameliorate the economic pain.
Restrictions on where and how Washingtonians can travel, work and spend money have increased as the severity of the coronavirus spread became clearer. Gov. Jay Inslee formally ordered Washingtonians to stay at home on March 23. Before that, many businesses that require close contact like barbers and nail salons were ordered to close, and restaurants could offer only takeout orders and delivery.
The totality of the restrictions means many businesses are shuttered, workers are laid off and the ability to spend money — the lifeblood of the local economy — has been largely shut off.
The impacts will be drastic, hitting every corner of Washington’s economy, predicts a new report issued by the Seattle Metropolitan Chamber of Commerce, in partnership with the Business Health Trust. And the problems don’t stop if Washington, alone, defeats the virus.
“Washington’s close international linkages and position as a global hub for trade and commerce further exposes our economy to the negative impacts of this unprecedented event,” the report reads.
As many as 40 percent of employees in King, Pierce and Snohomish counties are likely to be affected, according to the report. Based on data from the Bureau of Labor Statistics, 961,800 workers in those counties are in industries that are at risk in the immediate and short terms.
Inslee expanded unemployment insurance to previously ineligible workers to help bridge the gaps in the social safety net. That caused a spike in unemployment insurance claims. According to weekly data released by the state, initial claims more than doubled in a week: from 6,616 in the week ending March 7 to 14,240 the following week.
However, contract workers and those who work in the gig economy — think Airbnb managers, Uber drivers and Rover dog walkers — do not receive government support when their work dwindles. Rides dropped by half in one week, according to the Seattle Rideshare Drivers Association.
The impact on those households could be dire, and there are a lot of them. While statistics on informal work are in short supply, as much as 9 percent of Washington’s workforce participates in independent contract work.
The Millionair Club Charity (MCC) and its workers are feeling the effects.
The organization readies homeless and low-income people for the workforce, some doing day labor, some in restaurants cleaning dishes, but most in Seattle’s sports stadiums.
MCC has seen between 50 and 70 percent of its jobs disappear overnight, leaving many people waiting without work, said Christine Rylko, director of operations at MCC.
“We had six events this month: the Dragons, soccer and MLB,” Rylko said. Those workers do food prep, concessions and cleaning.
The organization lets workers in at 6:30 a.m., when they sign up for work upstairs. A few patrons gathered on the bottom floor, staggering their chairs to avoid transmission of the virus.
James Nance was waiting upstairs to see if he would be called for a job. Nance has a non-violent felony on his record that’s prevented him from getting full-time employment elsewhere, despite the fact that he’s been out of prison for more than two years.
Nance has an apartment, but he’s afraid he’ll lose it. There hasn’t been work at MCC for him for weeks as jobs evaporated. Nance spoke to Real Change before Mayor Jenny Durkan declared a moratorium on rent-based evictions, but he wasn’t comforted by the possibility because rent would still accrue.
He was already making plans to sell his belongings so he would have cash in his pocket if he became homeless once again. That money would be crucial to ensure that he didn’t find himself in desperate straits, he said.
“I’m not going back to prison,” Nance said.
Durkan put a moratorium on rent-based evictions for residential tenants, small businesses and nonprofits as concerns about the virus mounted. She also approved $2.5 million in small business assistance, and $5 million to help low-income people buy food.
Inslee and the legislature approved $200 million from the state’s rainy-day fund to assist communities and extend unemployment insurance. President Donald Trump ordered a federal emergency declaration on March 13, a move that allows states more flexible use of Medicaid funds, the health care program for low-income people.
The federal government needs to move more aggressively to help states cope with the emergency and shore up the national economy, which has been in freefall, said Robert Greenstein, executive director of the Center for Budget and Policy Priorities, a progressive thinktank based in Washington, D.C.
“Unless the president and congress take very strong, sizeable and effective action, we face the prospect of an economic downturn that could be deeper and more serious than the Great Recession of 2008 and 2009,” Greenstein said.
The current crisis is fundamentally different than the Great Recession, which was caused by a collapse in the global banking system. Back then, many consumers could still purchase items regularly. That isn’t the case here, Greenstein said.
“Today, in contrast, everybody can be effected,” he said. “The downturn is expected to last for months and the damage will be very substantial.”
The federal government could take steps to increase its share of Medicaid payments, freeing up money for states to use for other areas of the response, Greenstein said. It should also work to increase food benefits and unemployment insurance, which gets money into the hands of people who need it most and provides the most effective boost to the economy.
Even as it battles the coronavirus, the Trump administration had not slowed preexisting efforts to end food benefits for 700,000 people as of March 20.
Ashley Archibald is a Staff Reporter covering local government, policy and equity. Have a story idea? She can be can reached at ashleya (at) realchangenews (dot) org. Follow Ashley on Twitter @AshleyA_RC.
Read more in the Mar. 25-31, 2020 issue.