Labor Day brings tough reflections for Spokane region hit hard economically by pandemic

In normal times, Labor Day for business owners Dan and Michelle Duncan meant gathering with friends, a seafood boil and traveling to the Gorge Amphitheater to listen to Dave Matthews.

Labor Day “was just to get away, relax and meet up with friends we see every year,” Duncan said, “before we get back to work and prepare for Halloween, which was huge for us, and Christmas and make sure we had everything ordered for those holidays.”

But not in the catastrophe that is 2020.

During the novel coronavirus pandemic, the Duncans decided in May to pull the plug on their business of 33 years, Party Palace. They laid off their employees, including one woman who had been with them since 1989. Their layoffs, while small, added to some 19,000 employees in Spokane County who don’t currently have jobs but were employed in July of last year.

“Now, we are kind of like, ‘Now what?’ ” Duncan said. “What do we do? How do you plan after that?”

Grant Forsyth, chief economist for Avista Utilities, said many local business owners are facing the same decision as the Duncans regarding whether to keep going during these challenging times.

“If you were not a high-margin business in good times, when you hit something like this, you have to decide whether you want to keep your doors open,” Forsyth said. “My guess is we are going to see businesses exit this, and it will take years to get back the businesses we lost.”

Doug Tweedy, regional economist for the state Employee Security Department, said the last time the region faced job loss on this scale came more than a decade ago during the Great Recession. After that downturn, it took about eight years to finally surpass the number of jobs prior to the recession.

“It’s such a different situation,” Tweedy said of the pandemic layoffs. “This COVID virus was really hard-hitting in the workforce, laying thousands of people off. And, the thing going forward is that we still don’t know what the permanent impacts will be.”

But signs of recovery continue each week.

At the peak in May, about 36,000 Spokane County workers filed for unemployment. But thousands of those workers returned to work once Gov. Jay Inslee shifted from Phase 1 to Phase 2 of the reopening.

“That was a big step,” Tweedy said. “When you look at the list of industries that lost jobs, most of the jobs are in the service-providing industries.”

That category of jobs includes everything from restaurants and hotels to education and medical workers.

“If you add it all up, we are down 17,000 jobs. That’s just in the service-providing industry,” he said.

The manufacturing and construction sector has lost about 2,000 jobs since last year. “Overall, we’re down by 19,000 jobs over July 2019,” said Tweedy, who noted that those numbers don’t count agriculture jobs.

Recovery

One of the key numbers Tweedy watches for as a sign of hope comes in what the state calls “initial claims” for unemployment. Those are filed by workers who just lost their jobs.

“That number has gone down and keeps decreasing every week,” Tweedy said.

One statistic that has declined, but just barely, is the number of self- employed contractors and part-time workers, who were not eligible for unemployment benefits until the pandemic. That number of claims fell from about 7,000 to 6,000 last week.

“I think the self- employed were hit hard,” Tweedy said. “But I think the biggest category there were the people who were part-time workers. They are usually the first to go when you start a layoff, and they have been the slowest to go back to work.”

Even before the pandemic, the nature of several service industry jobs was changing, he said.

“It’s a lot more virtual. So there are jobs opening in those professional services related to telework and connection,” Tweedy said. “It is one of the faster-moving industries.”

Avista’s Forsyth agreed, saying he believes the workforce will have a much different look at the back end of the recovery. One of the major keys will be consumers who want to get out of their homes.

“It’s services that got hammered pretty hard as a result of the shutdown,” Forsyth said. “And because of ongoing resistance by consumers to participate in service activities that put them at risk for contracting COVID-19.”

Think concerts, like the ones the Duncans attended every year for more than a decade at the Gorge.

“There’s a tendency to blame government restrictions on the ability for the economy to recover quickly, but that’s not the only factor here,” Forsyth said. “A lot of people are holding back on spending activities that require gathering.”

That won’t happen until the general public believes the virus is behind them, he said.

“The ultimate way the virus gets under control is some widely dispersed vaccine,” Forsyth said.

Tweedy agreed, saying that fear of gathering may cause a major shift in the types of jobs going forward.

“There’s going to be a transition,” Tweedy said. “It’s going to take some time for people to get more comfortable. We have been housed up for so long, just going out and being with people is going to take some time.”