Washington’s Economic Recovery is Slowing

WIth fewer jobs being added each month, public health measures -- and government rescue and relief -- are crucial to get our economy moving

Washington’s overall unemployment rate declined from 8.5 percent in August to 7.8 percent in September — but the pace of recovery is slowing significantly as we head into Fall. Even with upcoming seasonal hiring, job growth is an order of magnitude too small for a significant recovery to take place.

As we enter the ninth month of the “COVID Recession”, housing, health care, and food security are at risk for hundreds of thousands of Washington residents, and millions more Americans. With coronavirus cases surging, federal action is critical — but so far it is not forthcoming. To get through this crisis, state and local governments must be bold and take decisive action.

Overall job growth slowing, with public sector posting biggest losses

Since June, fewer jobs have been added to the state’s economy each month than the one preceding:

Net Jobs Since Previous Month Net Jobs Since February 2020
March -6800 -6800
April -509900 -516700
May 112700 -404000
June 117000 -287000
July 54500 -232500
August 35300 -197200
September 10500 -186700

Source: Washington State Employment Security Department

Job losses in the public sector are the single largest contributor to the slow recovery: nearly 55,000 jobs (30 percent of total losses since February) have disappeared from state and local government. Accommodation and Food Service accounts for another 49,000 jobs (26 percent). Three other sectors have lost more than 20,000 jobs (11 percent) each: Manufacturing, Health Care and Social Assistance, and Accommodation and Food Service.

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Basic needs are at risk for hundreds of thousands of Washingtonians

According to the three most recent weeks of survey data from the U.S. Census Bureau for Washington, an average:

  • 229,300 residents (15 percent) who rent housing, and 6 percent (190,100) of those who have a mortgage, reported no or little confidence in being able to pay next month’s rent or mortgage payment.
  • 362,800 residents (8 percent) report having no health insurance.
  • 167, 500 households (18 percent) with children report sometimes or often not having enough to eat in the past 7 days.
Republican-led U.S. Senate effectively blocks additional federal relief

Most provisions of the first federal economic aid package for individuals — $1,200 checks and $600 per week unemployment insurance benefits — expired at the end of July. Since then, the U.S. House of Representatives, controlled by Democrats, has passed multiple aid bills. The latest, worth $2.2 trillion, came in late October (a slimmed-down version of a $3.4 trillion relief bill passed in May).

But the Republican-controlled U.S. Senate failed to agree on even its own (very slim) economic relief package worth just $500 billion — one that did not include a second round of $1,200 stimulus checks for individual Americans (even though that’s something the White House supports) or any new funding for cities and states, which are currently facing face mass layoffs because of plunging tax revenue.

Federal aid has kept individual families from falling deeper into poverty and provided critical economic stimulus to the entire US economy, Without bold action from the federal government, Washington’s families and communities — like millions of Americans in other states — will continue falling deeper into interconnected crises. That will all but ensure that any economic recovery (whenever it comes) will take longer and cost more than it needs to.

Public health measures and government spending are crucial to manage our crises

Our economy won’t be able to get up to full power until a vaccine is widely available and enough people are immunized. Until then, we have to manage the multiple crises COVID-19 has created.

Many businesses — especially public-facing ones — can’t safely boost the number of customers they see (and expand their payrolls accordingly), until we significantly slow the spread of COVID-19. Each of us must do our part to make that happen by wearing a mask, washing our hand often, maintaining a safe physical distance from others — and if meeting people, doing so either outside or in a well-ventilated space.

The lack of action at the federal level makes it crystal clear: this is an “all hands on deck” moment for our state, our local governments, and every public agency in Washington.

State and local agencies must continue taking any and all executive and administrative actions that extend flexibility and give relief to families and small businesses with eligibility for subsidies, childcare, housing and utilities, food assistance, shelter, health care, and more.

And when Washington’s legislators convene in January, it won’t be enough for them to simply avoid budget cuts. To stem job losses and stimulate “main street” economies of our local communities, they’ll need to make substantial public investments in housing, health care, food security, and child care.

By making bold policy and tax reforms — as detailed in EOI’s COVID-19 Toolkit — we will build economic security for all Washington residents, and put our state’s economy on a stronger footing.

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