‘Basically giving out cash’? Local leaders discuss possible COVID-19 economic response
For Puget Sound residents stuck at the epicenter of the national COVID-19 outbreak, the realizations have come in seismic waves.
First, the seriousness of the illness set in. With an ability to spread and rip through vulnerable populations, health officials and the public have quickly had to come to terms with a new, surreal world.
Meanwhile, each day seems to bring a breathtaking new aftershock. Whether it was the shuttering of state schools, or Gov. Jay Inslee’s more recent decision to close all bars, restaurants and clubs, every far-reaching mandate carries its own stark economic reality.
Last week, University of Washington Tacoma director of Urban Studies Ali Modarress said economic ripples in Pierce County caused by COVID-19 likely will be “huge.”
“We are going to have a good bit of a problem,” Modarres predicted of the disruption, even before bars and restaurants were ordered closed.
Bluntly, Modarres said many county residents are likely facing a “dire economic situation.”
So what can — and should —be done in this time of crisis?
It’s a question elected leaders and others in the community are now forced to grapple with.
To no great surprise, many said responding to the immense social impact of COVID-19 is going to take money and plenty of it. It also will require extreme flexibility and an unprecedented amount of community cooperation, elected leaders and others told The News Tribune.
“Are people going to be able to pay their bills, pay their mortgage? Are people going to be able to feed their families? Those things are really scary,“ Tacoma Mayor Victoria Woodards said.
Service industry and retail impacts
On Monday, while ordering a statewide restaurant closure and a ban on gatherings larger than 50 people, Inslee compared the situation to World War II.
“This is bigger than all of us,” Inslee said during a live-streamed press conference. “All of us have to recognize for the next several weeks, normal is not in our game plan.”
In Pierce County, one problem is the preponderance of families that rely on “normal” just to make ends meet.
According to Modarres, Pierce County’s economy is dependent on a number of industries and professions likely to be hit hard by the public health response to COVID-19.
While government and health care represent Pierce County’s top two employers, Modarres said, retail, construction and the service industries follow not far behind.
Together, retail, construction and food and accommodations employed roughly 100,000 people in 2019. The numbers, Modarres said, provide a sense of the potential “magnitude.”
If COVID-19 slows construction and effectively brings the food, retail and service industries to a grinding halt, Modarres said many of these employers and employees likely will have difficulty weathering the economic storm, particularly if the disruption lasts months.
Modarres also said construction recently has been Pierce County’s largest growth industry, while the service industry and retail have been imperfect economic engines — creating jobs, but not necessarily financial security for employees.
That means the response to COVID-19 will likely have lasting impacting for both individual workers and the area’s precarious local economy, Modarres said.
In 2019, the average accommodation and food services worker earned about $25,500, Modarres said. Many relied heavily on tips, he added.
“A significant number of our jobs … are below $20 an hour. Gross, that’s about $40,000 a year or less,” Modarres said. “If the economy continues to contract the way it is, we’re going to feel it.
“Beyond helping small businesses, we need to begin to talk about how we’re going to support people’s incomes.”
‘Basically giving out cash’
Pierce County Councilman Derek Young described the moment as urgent and didn’t mince words when asked about the appropriate response.
Locally, Young said Pierce County renters need short-term eviction protection, while county contracts with local nonprofits likely need to be adjusted to ensure they can continue to pay employees.
They’re two issues among many facing local leaders that will require cooperation and flexibility, Young said.
“I know what would be good, but I don’t know what’s legal yet,” Young said Friday when asked about the possibility of temporarily halting evictions.
“We haven’t hit the big disruption of work, but tipped workers are probably already experiencing enough income loss to be in trouble. I’m trying to see if there’s something we can do about evictions, or at least not enforce them,” Young said Friday, before the closure of restaurants and bars.
“Is the sheriff going to bounce you? Can we can hold off on that?”
On a national level, Young said swift — and timely — economic action is needed.
“The federal government … needs to take that opportunity and basically mail out checks to everyone,” the Democrat from Gig Harbor said Friday.
While such an economic prescription might have seemed like hyperbole a week ago, in the midst of the COVID-19 outbreak Young is far from alone.
On Monday, Utah Senator and former Republican nominee for president Mitt Romney urged lawmakers in Washington D.C. to give every American adult $1,000 to “help ensure families and workers can meet their short-term obligations and increase spending in the economy.”
Describing the need for a federal economic stimulus, Young said our economy is likely to experience shocks in both supply and demand.
That’s “exceedingly rare” Young said, but while addressing a supply shock is much more difficult, a well-timed stimulus can help mitigate the impact of a demand shock.
Young described the emergency response as “basically giving out cash,” arguing that if the federal government doesn’t spend big now, it will likely be required to spend even bigger later.
Inaction, Young argued, could quickly lead to a Great Recession-level downturn.
People will lose jobs and lose housing. The snowball will accelerate, he said.
“Maximum flexibility in this situation is probably for the best,” Young said. “It’s not long term, and, yes, we need to safeguard public funds as much as possible, but at this point in time it’s more important that we keep as many people employed as possible.”
Prior to voting on an emergency coronavirus relief package last week, U.S. Rep. Derek Kilmer told The News Tribune he was hopeful federal lawmakers would rise to the occasion.
Kilmer highlighted the billions in funding Congress had already allocated — including the bipartisan $8.3 billion emergency package signed by President Donald Trump early this month.
Kilmer said the more recent coronavirus relief bill — which passed the House Saturday and has earned the all-important Twitter approval of Trump — would increase food funding and unemployment assistance. Importantly, the bill also would increase the number of U.S. workers who receive paid sick leave, though as The New York Times has noted, significant gaps remain.
Even with these bills, Kilmer acknowledged the obvious:
COVID-19, he said, will likely require “continued efforts on mitigating the negative impact on workers and families.”
Those efforts, according to Kilmer, would likely focus on “health security and economic security,” including assistance for small businesses.
Kilmer said the federal government needs to “ensure that we’re stepping up and saying, ‘If your Main Street employers are hammered by this, you’re not on your own. We’ve got your back.’”
On Friday, Kilmer said he had spent much of the day calling local mayors and leaders throughout the cities in his district, asking, “How can I help?”
“Every one of them told me, ‘Gosh, we’re really concerned about what the economic impacts of this are going to be,’” Kilmer said.
“I don’t think I’m violating any confidence,” Kilmer said. “I think there’s a real concern.”
‘It’s going to take absolutely all of us’
In Tacoma, Woodards said the evolving crisis caused by COVID-19 has at times been “overwhelming.”
Tacoma’s mayor said she worries about the schoolchildren who rely on public schools for two meals a day or a safe place to go. She’s concerned about families and people who will have trouble paying their bills. She thinks of the parents, the front-line medical responders and the grocery workers.
Together, the mayor said, the disruption caused by the illness and efforts to contain it “cuts so much deeper than a temporary situation.”
It requires immediate action, Woodards said, including efforts already underway.
Among other things, the city, Woodards said, is looking into providing “financing tools” to struggling local businesses.
Tacoma Public Utilities is extending flexible payment options for customers, the mayor said.
It’s only a start, Woodards acknowledged.
“We’re going to have to come together as a community. It’s going to take absolutely all of us,” Woodards said.
Pierce County Executive Bruce Dammeier agreed, telling The News Tribune that while the challenges are significant, he’s confident the county and its residents will respond.
According to Dammeier and others, one local concern is making sure medical providers have access to child care, so they “can focus on doing their job.”
Dammeier, a Republican from Puyallup, also cited the potential need for the county to step in and provide economic assistance for struggling local businesses, which could come faster than federal relief, he said.
Other county priorities, Dammeier said, include aiding school districts providing meals to children and other important services, identifying potential isolation and quarantine sites for those without the ability to self isolate and working with the local nonprofit community to make sure they have funds to continue to provide important services.
Dammeier said eviction protection had not yet been discussed in his office, and he’s not sure it will be necessary.
“Based on what I’m seeing in our community right now, I would be shocked if the vast majority of our landlords were not very lenient during this time — and not because the government is telling them they have to be,” Dammeier said.
Asked about the potential federal response, Dammeier said we’re in “uncharted territory.” He has advocated for a “FEMA natural disaster model,” with an ability to “bring in a lot of economic assistance to our community,” he said.
Such a response could be slow, Dammeier acknowledged, which is why he believes the state and county need to act “nimbly” with targeted economic assistance and resources in the meantime.
Striking an optimistic tone, Dammeier said the acts of kindness and cooperation he’s already seen from local businesses and residents give him hope. This will take more than government, he predicted.
“The way that our community is coming together is really encouraging,” Dammeier said.
“I would never wish this on our community in a million years, but I’m so encouraged by how people are stepping up.”
This story was originally published March 17, 2020 at 10:49 AM.
