By Kim Mackrael and Andrew Tangel
Seattle provides a pronounced version of the nation's economic
divide between companies and workers who can operate primarily
online through the coronavirus pandemic and those who can't.
The Emerald City's high-tech image stems from companies such as
Amazon.com Inc. and Microsoft Corp. -- both based in the Seattle
area and among its largest employers. Their businesses have
remained strong during the national downturn, providing job
security to headquarters employees who can generally work from
home. Neither company has announced staff layoffs in the region
since much of the country's economic activity shut down in March to
prevent the virus's spread.
Roughly 11% of the region's workers in the information sector,
which includes software publishing, along with traditional
broadcasters and publishers, applied for unemployment benefits
during the 11 weeks ended May 16, according to an analysis of
initial unemployment claims data from the Washington Employment
Security Department. Government workers have also been relatively
spared: Just 3% of that workforce has filed for unemployment
benefits.
This contrasts with the fortunes of the area's factory and
service-sector employees who can't work remotely and are now facing
furloughs, job losses or worries about contracting the infection on
the job.
Nearly half of the Seattle region's roughly 207,000 hospitality
and leisure workers have filed for unemployment benefits since
early March, based on the department's data. Construction,
manufacturing, health and education workers are also among the
hardest hit, with a third or more of their local workforce applying
for unemployment benefits, the department's data show.
Looking at jobless claims as a percentage of the workforce helps
give a sense of how the pandemic has affected different industries.
Not all applications for unemployment benefits are approved, and
Washington state said last week it is investigating a recent surge
in fraudulent claims.
"We're in both extremes here," said Jacob Vigdor, an economist
with the Evans School of Public Policy & Governance at the
University of Washington in Seattle. "We have a good number of
high-paid employees that are still getting paychecks. But we're
going to have some lagging sectors as well."
The Seattle area was home to the first publicly known U.S.
cluster of deaths from Covid-19, the disease caused by the virus,
and Washington was among the first states to issue stay-at-home
orders. More than 700 people in the region have reportedly died
from the disease, according to data from Johns Hopkins
University.
Washington has in recent weeks allowed landscaping, some
construction and curbside pickup for retail stores.
Zak Elhabbassi, 25, who lost his sales job at a Mercedes
dealership in Seattle on March 23, said he is putting expenses on
his credit card while he waits for unemployment payments, and isn't
sure how he will cover his share of the rent in June.
"Two months ago, everyone was doing just fine," Mr. Elhabbassi
said. "And then this pandemic hits and everyone's like, 'Oh God,
I've got to eat, I've got to pay rent.' It just shows how
vulnerable we are."
One of Seattle's struggling sectors is aerospace manufacturing.
Boeing Co., though based in Chicago, is the largest employer in
Washington, with more than 70,000 workers in the state. It operates
two aircraft assembly factories in the Seattle area and its
presence supports hundreds of suppliers. The company had already
halted production at its plant in Renton in January because of the
prolonged grounding of its 737 MAX jet following two fatal
crashes.
Boeing closed its largest Seattle-area factory temporarily in
late March after about two dozen workers in the region tested
positive for the new coronavirus and one person died. The plant
reopened last month with additional safety precautions. But
employees across the company are facing a new concern: Boeing,
which employed 161,000 staff world-wide as of Jan. 1, said in late
April it plans to cut its global workforce by about 10% amid a
collapse in demand for air travel.
Much of the company's cuts are expected to hit Boeing's
commercial arm, whose operations are based in the Seattle area. The
company has said the reductions will target both factory and
white-collar workers.
"Everybody's just anxious to see how deep the cuts will be and
then how long it is going to take us to get a vaccine," said Joel
Funfar, a Boeing technician who is president of the union local for
the Society of Professional Engineering Employees in Aerospace.
Seattle's hospitality industry and bricks-and-mortar retailers
also are reeling from the shutdowns.
Owners of restaurants and stores in downtown Seattle said
business dropped off sharply in early March after large technology
companies asked most workers to stay home.
Hotels and restaurants will miss out on a seasonal bump in
business due to the cancellation of this year's cruise season,
which last year generated nearly $900 million in local business
revenue, according to the Port of Seattle. At seafood restaurant
Ivar's Acres of Clams, roughly 70% of summer revenue comes from
tourists, said co-owner Bob Donegan. "That's a huge business we're
not going to get this summer," he said.
Meanwhile, some technology and e-commerce businesses have
reported higher demand since the pandemic began.
Amazon.com Inc. said sales rose beginning in early March, as
more people shopped from home, and Microsoft Corp. reported strong
growth in first quarter sales and profit. The two companies
together employ more than 100,000 people in the region.
Facebook Inc. and Google parent Alphabet Inc., which each have
several thousand workers in the Seattle area, reported higher
revenue and more use of their services in the first quarter.
Ian Warner, a public policy director with online real-estate
company Zillow, which is based in Seattle, said his shift to remote
work was easier than he expected, even though it coincided with his
family moving into a new house, and the pandemic meant his parents
and his partner's parents could no longer help out with child care.
Zillow was among the first Seattle companies to ask workers to stay
home, and the company has since said they can continue to do so
until at least 2021.
Mr. Warner, 34, said he is relieved not to have to worry about
the possibility of getting his family sick. "It feels much safer
working from home," he said.
Seattle Mayor Jenny Durkan said in an interview that tech
companies' early decisions to ask employees to work from home made
an important difference in slowing the spread of the virus. But she
worries that the pandemic's uneven impact on industries in the
region could add to existing inequalities.
"If you look at who was able to enjoy the surge of the
innovation economy, I think that disproportionately communities of
color were left out of that equation," she said. She said the
pandemic has accelerated economic change in Seattle and accentuated
the differences between the innovation economy and other
sectors.
Some workers in harder-hit industries are hoping to transfer
their skills to others.
Jessica Horton, 37, resigned from her job as human resources
director at the Pan Pacific Seattle hotel in March after her pay
was cut by half. She believes her work experience should help her
land a new job, likely in the tech industry.
"There's not going to be anything to go back to from a
hospitality perspective," Ms. Horton said. "I'll probably end up at
Amazon."
Write to Kim Mackrael at kim.mackrael@wsj.com and Andrew Tangel
at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
May 24, 2020 10:14 ET (14:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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