Low-wage workers will be hardest hit by economic coronavirus impacts

Nonprofits are bracing for a groundswell of housing assistance requests as the COVID-19 outbreak continues, leading to reduced hours and layoffs for employees in King County.

County officials announced last week new recommendations that employers allow their employees to work from home. It also recommended avoiding large crowds, and since then several events, including Emerald City ComiCon — a large comics convention — have been canceled or postponed.

The situation has been rippling through the local economy, with reports of businesses laying off employees. Low wage workers and those in the gig economy are vulnerable to economic disruptions from the outbreak.

Todd Langton, director of communications for local nonprofit Hopelink, said low-wage workers living paycheck to paycheck will suffer the most. He’s expecting to see an increase in requests for rental and housing assistance. But with no indication of how bad the outbreak will get, he couldn’t say how much need could swell.

“A lot of it has to do with how the society responds to it, and the steps that we need to take as a community to manage around the disease,” he said.

While many of the largest tech companies have told their employees work from home, service workers at restaurants, hotels and other jobs can’t work remotely.

Anneliese Vance-Sherman is the regional labor economist for King County with the state’s Employment Security Department. While hard employment data for the last few weeks won’t be available until April, she expects King County workers in service industries to be harmed the most.

“I’m watching for the impacts on a lot of the low-wage economy. And the reason for this is really when we think about which industries, the functions of the job, rely on face-to-face contact, a lot of these are the service industry jobs,” she said.

People working from home means less foot traffic for retail and service businesses, which can turn into hours being cut and people laid off. It also puts workers more at risk for catching coronavirus and coming down with COVID-19. All of these factors will likely hurt workers making low wages compared to more affluent ones.

“The relative impact of job loss or loss of hours could absolutely bring on hardship,” Vance-Sherman said.

Washington state is offering a program called SharedWork, where employers can cut staff hours by half and employees can simultaneously receive unemployment benefits to help fill the gap.

Still, Bellevue-based nonprofit LifeSpring is expecting a 25 to 50 percent increase in the number of families seeking rental and housing assistance in the coming months. It will likely be compounded by a high cost of living, layoffs that are especially hitting the service industry and possible school closures that could leave parents on the hook for finding child care and food.

“I think the trickle-down effect of this on the families that we support could be rather extreme,” said Jennifer Fischer, LifeSpring’s executive director.

They’re trying to prepare for it, and reaching out to community partners like Safeway to provide food vouchers for families. The nonprofit serves 3,500 low-income students and their families, along with nearly 350 homeless children.

On top of this, LifeSpring has had to cancel it’s spring fundraising event which was scheduled for March. The spring luncheon accounts for a quarter of their budget. They’re asking donors and sponsors to contribute anyway to meet an increase in need.

It’s a situation that played out at Youth Eastside Services as well, said Lidia Harding. The organization had to cancel its March fundraiser, which normally brings in one-third of their annual budget.

“That’s quite significant,” she said.

Harding said they’re not rescheduling, but instead running a virtual donations campaign.

Issaquah Food and Clothing Bank

Other services are shutting down temporarily, like the Issaquah Food and Clothing Bank which serves 400 families a week. Their storefront was shuttered this week as the organization developed a game plan for keeping their staff and clients safe.

“In our normal service model people are gathering in groups on a daily basis, and so we’re having to alter that service model to reduce people’s risk,” said Bonnie Decaro-Monahan, the food bank’s development director.

She also noted the trickle-down effect the outbreak is having. Washington state enacted sick leave laws in 2018, and most employees earn one hour of leave for every 40 worked. However, quarantine isn’t covered under the state’s Paid Family and Medical leave program.

In King County, the county’s Regional Affordable Housing Task Force found that more than 124,000 households were cost-burdened, meaning they spent more than 30% of their income on housing. And American Indian, Alaska Native and black households experienced higher levels of cost burdening than others. Those under 25 were the most likely age group to be cost burdened as well.

Incomes for those in the bottom quintile have not kept pace with those at the top, with tech workers seeing their incomes increase by 127% between 2005 and 2018. In 2018, one in five county households earned less than $41,000, marking a much smaller 45.5% increase since 2006.

According to MIT’s living wage calculator, a single parent with a child would need to be making $30.30 an hour in the county to live comfortably. More than double the $15 Seattle minimum wage, or the $13.50 statewide minimum wage.

The coronavirus outbreak, which has killed at least 20 in the county and sickened more than 100 people, is exposing the underlying inequality in the area.

“The situation makes it real. It’s no longer a ‘Boy, what if.’ It’s happening, and it’s going to bring to light the knife edge that a lot of people walk living day to day, because of the cost of living, and because of the income inequity,” Langton said. “It’s a system, and it’s a system that’s not working for a lot of folks. And it’s an example that’s going to demonstrate what happens when that kind of system leaves people behind.”