In early March, as businesses in Washington state began closing to halt the spread of coronavirus, it wasn’t uncommon to hear predictions of a relatively quick, “V-shaped” recovery once the state’s economy reopened.

But more than two months later, as the reopening finally gets underway, such upbeat forecasts have all but vanished.

By almost every indicator — from lost jobs and shuttered businesses to manufacturing slowdowns and falling tax revenues — the economic damage from the pandemic has been so much worse than expected that some economists are now drawing comparisons, not to earlier recessions, but to natural disasters, whose economic impacts can be particularly hard to overcome.

“This fits more of a hurricane or mudslide kind of scenario than it does the supply and demand [scenario] we’ve seen in previous recessions,” said Anneliese Vance-Sherman, the state Employment Security Department’s regional economist for much of the Seattle area. “It’s different.”

Indeed, forecasts now suggest a recovery that will be anything but V-shaped. The Congressional Budget Office predicts that the national economy, which shrank by an annualized rate of 4.8% in the first quarter, will shrink by an astonishing 40% in the second.

That sets the stage for a recovery, in Washington and elsewhere, that is likely to stretch well into 2021 or beyond and have far-reaching impacts.


It’s not simply that more than 800,000 workers in Washington have filed for unemployment benefits during the crisis — enough to the erase the state’s job growth since the early 2000s.

It’s also how rapidly that economic damage has piled up. In the Great Recession, the job losses in Washington were spread out over two years, Vance-Sherman says. The losses in the current crisis have come in just two months.


Initially, the downturn’s swiftness encouraged hopes for a speedy recovery, especially as Congress authorized trillions of dollars in stimulus payments, business loans and expanded unemployment benefits.

That relief has clearly helped: It may partly explain, for example, why demand for government food assistance has fallen since mid-April and why residential landlords in King County saw lower-than-expected rent delinquencies in April.

But the stimulus efforts haven’t addressed questions around people’s ability to keep paying rent or mortgages longer term, or how that could eventually cause trouble for banks. It may not be a good sign that between February and March, the number of Seattle-area households behind on mortgage payments increased 11.4%, or nearly three times faster than the national average of 3.3%.

Nor can relief payments reverse the unwinding of economic sectors that have driven so much of the state’s job growth.

Roughly two of every five workers in Washington’s construction sector have filed for unemployment since early March. The same fraction have done so in the food service and accommodation sector.


Manufacturing has been hit almost as hard, with nearly 30% of workers filing claims since early March. Boeing will cut more than one in seven jobs at its commercial jet business, principally in its Seattle-area operations, as the company adapts to a global aviation industry expected to be a shadow of its former self for the next four or five years. “We will be a smaller company for a while,” admitted CEO Dave Calhoun. So will many of Boeing’s local suppliers.

Urban cores that have been economic engines in their own right have also been quieted. In downtown Seattle, the stay-at-home exit of office workers and the disappearance of tourists, business travelers and convention attendees has idled a commercial hub normally responsible for nearly half the city’s economic output. The downtown’s hotel sector alone has seen revenue fall by roughly 90% year-over-year since mid-March and at least 29 hotels have temporarily closed, according to the Downtown Seattle Association. Some experts don’t expect the sector to fully rebound for several years.

Years were not what policymakers had in mind when they were crafting recovery strategies in March. Most assumed that stimulus benefits only needed to keep workers and businesses solvent for two months or less before state economies reopened and commerce snapped back to life. Few policymakers anticipated the phased reopening announced May 1 by Gov. Jay Inslee that could last through much of the summer.

Nor did many policymakers expect that, even if the re-opening doesn’t spur a surge in COVID-19 cases, the public still might not be ready to resume normal life. But some large employers have extended work-from-home policies for office workers into the fall, and in some cases to the end of the year, in part over employee concerns about returning to the office. And more than half of Seattle residents say they’ll avoid social gatherings or physical contact for the next year or even longer.

That reluctance to mingle is, of course, one big reason why this economic crisis is so much more severe than any other modern downturn, experts say. While lifting restrictions on industries like construction may translate into quick re-employment, the same may not be true for more public-facing businesses like restaurants or shops.


“The stores can open, but people must decide to actually go,” says James McCafferty, co-director of the Center for Economic and Business Research at Western Washington University.

Coronavirus Economy daily charts for the week ending May 9

Support for social distancing could fade more quickly than surveys suggest — perhaps in time to let many shuttered companies rehire their staffs. But each week the state economy remains constrained, the harder it is for economists or business owners or workers to imagine a recovery that isn’t measured in years.

“The time-scale was too optimistic,” says Debra Glassman, a principal lecturer of finance and business economics at the University of Washington Foster School of Business. “There are businesses that are not going to survive; there are people who are going to have to make drastic cutbacks in their spending. And all of these things then compound and multiply the effects that ripple through the whole economy, and all of that slows down the recovery.”

State forecasters now expect a $3.8 billion decline in tax revenue for the remainder of the 2019-2020 budget cycle and an additional $3.27 billion decline in the 2021-23 budget cycle, according to preliminary estimates.

Seattle could see tax revenue fall by as much as $300 million in 2020 alone, raising the specter of major spending cuts. “What the city is going to have to do is going to be very tough,” explained Mayor Jenny Durkan during an online news conference late last month. City budget director Ben Noble expects the impacts of the crisis to stretch into 2024.

But the starkest impacts are likely to be felt among newly unemployed workers wondering when they’ll have a job again and business owners wondering how long they must absorb losses before customers return. “Hope is not really a business plan,” said Paul Wedeberg, who says he recently decided to close his Sammamish bar and grill, Kryptonite, after learning that restaurants could operate at only partial capacity initially under Inslee’s plan for reopening the economy.


Not all the news is bad. The Seattle area’s tech sector remains relatively unscathed, in part because products such as cloud-computing services remain in high demand and because many tech workers can work from home. The 7,910 initial unemployment claims filed since early March by workers in Washington’s “information” sector, which includes tech workers and is heavily concentrated in the Puget Sound region, represent just 6.3% of the sector’s jobs.

That relative robustness could help buffer the Seattle-area economy, Vance-Sherman says. It will also be critical for a broader recovery, just as it was after the Great Recession, when a tech boom helped revive such job-generating sectors as construction. “The tech industry was continuing to grow and they needed more … built office space and more housing,” adds Vance-Sherman.

But tech’s potential as an engine of recovery also highlights how uneven that recovery is likely to be. Many of the Seattle-area’s “professional white-collar workers who could easily work from home, who are stably employed, [and] whose skills are still in demand” could experience a recovery that is both swift and undramatic, says Jennie Romich, an associate professor in the University of Washington School of Social Work and director of the West Coast Poverty Center.

By contrast, Romich expects a more protracted and painful recovery for many lower-income workers who have not only lost jobs, but are likely to suffer more secondary effects, such as running up debt or losing housing. She also notes unemployment rates have been higher and have persisted longer among African Americans and Native Americans than for the population as a whole during past recessions.

For these reasons, Romich says, Seattle-area leaders shouldn’t be thinking about one recovery, but multiple “recoveries that different people are going to experience.”

In this sense, at least, the COVID-19 economic crisis isn’t so different from the Great Recession, which also amplified preexisting disparities.


Sue Potter, CEO of Nourish Pierce County, a food bank network, notes that the sharp increase in customers using the network during the Great Recession never fully receded during the recovery, in part because local “rents and cost of living [became] so much higher for people working minimum-wage jobs.”

That pain was compounded because the recession led governments to cut back on social programs, which meant less of a safety net for many jobless workers, says Romich.

Those impacts, which were felt disproportionately at the lower end of the income scale, helped fuel progressive movements that produced such measures as Seattle’s $15 minimum wage just a few years later.

But they also highlighted what many experts saw as an inadequate relief response by a Congress focused on austerity, which resulted in a recovery that dragged on for years. Many lawmakers don’t to see that repeated.

Instead, some in Congress think the next round of stimulus, currently being negotiated, should not only bring additional relief for workers and businesses as well as funding for cities and states. It should also push for measures, such as rental assistance, affordable housing, and job-skills programs, that can address those structural inequalities.

“We need to remember that this country still has vast collective wealth,” says Rep. Denny Heck (D-Olympia), who is proposing a rental assistance measure. “And if this isn’t a time for us to invest it in restoring the economy, then I don’t know what would be.”