Building an Economy that Works for Everyone

Washington’s Economic Crisis is Deepening — We Need Immediate Aid and Bold Action

Federal, state and local lawmakers need to step up now so we can begin healing and start turning the economy around

The state’s economic crisis is deepening. Hundreds of thousands of Washingtonians continue to suffer and are nearing exhaustion. We need immediate aid and bold action to start healing and begin turning the economy around.

With special federal unemployment benefits expired and the first round of stimulus checks largely spent, there simply isn’t enough consumer demand to keep even a modest recovery going, even with an upswing in seasonal hiring for the holidays.

Job growth has stalled out, with minimal job gains since September. Unemployment was unchanged between October and November 2020 at 6.0 percent statewide, and seasonally adjusted non-farm employment was up by just 100 in November, according to the federal Bureau of Labor Statistics.

Initial regular unemployment claims applications are declining very slowly and remain at elevated levels: 203 percent above last year’s weekly new claims applications, according to Washington’s Employment Security Department.

The Census Bureau’s latest data shows hundreds of thousands of Washington residents struggling to make ends meet: behind on rent payments, lacking health insurance, and without enough food on the table.

There are two potential bright spots ahead:

  1. President-elect Biden has laid out a plan for a $1.9 trillion emergency vaccination and economic relief package to get the country through and past the coronavirus.
  2. State lawmakers are now in session and have the opportunity to pass bold legislation to make substantial public investments in housing, health care, food security, and child care that will help stem job losses and stimulate “main street” economies of our local communities.
Restaurants, government, manufacturing show large losses, while high-wage sectors are growing

Looking at non-seasonal (unadjusted) employment numbers, in every month since June, fewer jobs were added to the state’s economy than the month preceding — until November, which shows a small increase due to hiring for the holidays. Even so, more than 137,000 jobs are still missing from payrolls:

Jobs Since Previous Month Net Jobs Since February 2020
March -7700 -7700
April -356000 -363800
May 6700 -357100
June 93800 -263300
July 54500 -208800
August 35300 -173500
September 11800 -161700
October 7900 -153800
November 16300 -137500

Source: Washington State Employment Security Department

Nearly 9 in 10 (87.8 percent) of Washington’s total job losses since February 2020 are concentrated in just three sectors:

  • 36.5 percent (50,200) are in Accommodation and Food Services (average yearly pay $39,000 below state average), driven primarily by restaurant/bar losses.
  • 34.1 percent (46,900) are in Government:
    • 25.2 percent (34,700) in Local Government (average yearly pay $1,000 below state average), driven primarily by education losses.
    • 8.9 percent (12,200) in State Government (average yearly pay $3,000 above state average).
  • 17.2 percent (23,600) are in Manufacturing (average yearly pay $17,000 above state average), driven primarily by aerospace losses

It’s important to note two large job sectors, which feature very high average wages, that have continued to do well this year. Since February:

  • Professional, Scientific and Technical Services — where average pay is $37,000 above the state average — has added 7200 jobs.
  • Information — where average pay is $152,000 above the state average — has added 1900 jobs.
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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, more than 2.7 million Washingtonians age 18 and older (46 percent) report having lost employment income since March; 1.65 million (28 percent) expect to lose employment income in the next 4 weeks.

Many Washington households were on an economic knife-edge even before the COVID-19 recession hit, and the Census Bureau’s data shows what happened as a result:

  • 168,750 households (11 percent) report being (1 or more months) behind on rent.
  • 9 percent of Washington residents age 18 and older (more than 396,000 people) report having no health insurance.
  • More than 207,000 households (10 percent) with children under 18 report sometimes or often not having enough to eat.
President-elect Biden’s plan won’t be enough — state lawmakers must take bold action

During the first months of the recession, federal aid kept families from falling deeper into poverty and provided critical economic stimulus to the entire US economy. But as that aid expired, the economic recovery faltered, pushing Washington’s families, businesses and communities deeper into crisis.

President-elect Biden’s plan, if enacted by Congress, will put the nation on a different course. As summarized by Heather Cox Richardson, it calls for:

  • $50 billion to ramp up Covid-19 testing, including rapid tests, and to help schools and local governments establish regular testing systems.
  • $30 billion for the Disaster Relief Fund to make sure it can provide supplies for the pandemic.
  • $1400 stimulus checks for individuals, expanded unemployment benefits through September, and an end to eviction and foreclosure until September 30.
  • $30 billion to help people meet payments for rent or utilities, and
  • A $15 minimum wage.

As Richardson notes, Biden is also calling for aid for child care, a $3 billion investment in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and $350 billion for state, local, and tribal governments to support front line workers.

But federal action alone won’t be enough. We learned from the last recession that unless Washington’s lawmakers make bold policy and tax reforms to build economic security for all Washington residents, and put our state’s economy on a stronger footing, our families, businesses, and communities won’t be able to mount a strong recovery.

As detailed in EOI’s COVID-19 Toolkit, those reforms include:

  • Ensuring everyone has access to affordable health care,
  • Promoting high-quality, affordable child care,
  • Providing equitable access to higher education opportunities, and
  • Utilizing progressive revenues to rebuild Washington’s economy.

It is also important that state and local agencies 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.

Gov. Jay Inslee’s announcement of a one-time payment of $550 to many recipients of Pandemic Unemployment Assistance (PUA) was a welcome and appropriate step in that direction, as is his extension of the state’s eviction moratorium. But Senate Republicans recently failed to extend two emergency proclamations, thereby denying millions in benefits to Washington’s residents and businesses. Hopefully, that is the last we will see of such political gamesmanship with people’s lives.

We all have a role to play

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 hands often, maintaining a safe physical distance from others — and if meeting people, doing so either outside or in a well-ventilated space.

Ultimately, 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. The prescription for healthy people and a strong economy is robust federal aid, bold state action, and responsible individual choices.

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