Without Government Spending, Coronavirus May Cause Washington’s Economic Collapse

We’re facing potential economic disaster, with weeks or even months of disruption

The usual lunchtime crowds are gone from downtown Seattle, as businesses and individuals heed the advice of public health officials to stay home if sick and work from home if they can. That means no more long lines at food trucks, restaurants, and retail shops.

We don’t know yet how the COVID-19 crisis will ultimately play out, but it’s clearly already hitting the pocket books of local businesses and their workers.

Washington State has some of the strongest paid sick and safe leave and paid family and medical leave laws in the country. Having a few paid sick days and potentially access to paid family and medical leave for severe cases of COVID-19 certainly helps. But these systems are designed to help workers and businesses get through routine health and caregiving needs. We’re facing potential economic disaster, with weeks or even months of disruption. We need a disaster-scale response from our state and federal governments.

Washington State and Congress have already taken initial actions. The Legislature has passed a bipartisan measure to help local governments respond and loosen work availability requirements for people on Unemployment Insurance who are in quarantine. Governor Inslee has opened the Workers Compensation program to quarantined health workers and first responders and announced the state will cover costs for COVID-19 testing for uninsured people. Insurance Commissioner Kreidler has ordered insurance companies to cover required COVID-19 testing without copays or deductibles.

Meanwhile, Congress approved $8.3 billion, mostly dedicated to helping federal, state, and local governments and health workers combat the virus, with $20 million for the Small Business Administration.

These are good starts, but our public health systems, businesses, and working families will need much larger infusions of funds. Both the state and Congress must do more.

Businesses, especially small local businesses, will need cash grants to survive the sharp decline in customers and get back on their feet. Childcare centers, nursing homes, and other businesses providing essential services to vulnerable populations will need help covering staffing shortages, extra cleaning, and other precautions.

Workers will need income when they can’t work because of illness, quarantine, or business slowdown.  Congress should infuse money into state workers comp and unemployment funds, especially in the hardest hit states, so that these existing systems can provide benefits to all quarantined workers and those forced to work reduced hours (through short-time compensation). The federal government should also immediately increase funding for food stamps, housing, and utilities assistance, and suspend restrictions on access. A temporary reduction in federal payroll taxes would provide a little extra cash for both workers and businesses.

If Congress doesn’t provide more funding before Washington’s Legislature adjourns March 12, then the Legislature should dust off some of the progressive revenue measures it has let languish this session and invest more themselves.

Without these measures, we’ll see increases in homelessness and death, and many in our communities will suffer long-term negative consequences to economic security, opportunity and health. As usual, low-income families and communities of color will be hardest hit.

COVID-19 is testing our capacity as a state and nation to respond to a crisis. It is unlikely to be the last such test.

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