Job losses could be steep in cold-weather cities like Bellingham. Here’s why
Cold winter weather, no signs of a new federal stimulus package and the new COVID-19 restrictions are expected to provide terrible gut punches to businesses, resulting in thousands of job losses in Whatcom County.
That’s the forecast in a new report from Gusto, a payroll and benefits platform for small businesses across the U.S. It estimates that 3,200 retail, leisure and hospitality jobs will be lost that were recovered during the summer. If the current new restrictions remain in place, the job loss would be around 6,000 across all sectors in Whatcom County, said Luke Pardue, an economist for Gusto. Whatcom County has about 100,000 non-farm jobs, according to state statistics.
“Small businesses in Bellingham have been able to survive the summer months by moving services outside,” Pardue said in an email. “Due to the drop in temperature and increase in precipitation, they will face higher costs upfront in order to adjust their services and maintain consistent clientele during the winter. Tents, heat lamps, blankets, and other supplies needed to keep customers visiting cost money that businesses don’t have right now, and they will not be able to afford without additional aid.”
On Friday, Nov. 20, Washington Gov. Jay Inslee announced a $135 million economic relief package to support businesses and workers impacted by the latest restrictions.
The report combines city-level monthly temperature data with employment statistics at the metro city level to estimate the possible drop in employment faced by cold-weather cities.
If this forecast proves to be accurate, it would be another harsh jolt to the labor market but not as wide-ranging as the complete shutdown last spring. Whatcom County lost 13,200 jobs from February to April, of which 9,100 were recovered by September, said Anneliese Vance-Sherman, a regional labor economist for the state. She did note that even without a virus pandemic, the coming weeks are usually when Whatcom sees the highest number of jobless claims.
Vance-Sherman doesn’t have a prediction on how many Whatcom County job will be lost in the coming months, but she doesn’t expect it to be as deep as last spring because everyone has been on a collective learning curve about the virus this year.
“That said, we do need to be paying attention to the viability of business,” Vance-Sherman said in an email. “Because many do rely on holiday spending, I am concerned about viability in what is proving to be a long term crisis.”
How many jobs will be lost this winter will be influenced by how much government assistance is made available, said Hart Hodges, co-director at the Center for Economic and Business Research at Western Washington University. How many loans or grants are available for small businesses could be a determining factor when it comes to how many of these businesses will be in turmoil, he said in an email.
One thing that is clear during this pandemic is smaller businesses are being hurt more than large companies, said Don Goldberg, director of economic development at the Port of Bellingham.
“We may soon find ourselves without many of them and we’ll lose the nature of our community,” Goldberg said, referring to small businesses.
Through the work being done by Whatcom Unified Command’s economic task force, Goldberg said they are continuing to try and find grants and other resources for the small businesses, with the focus being to help them keep their heads above water.
While he’s disappointed that Whatcom County is going through these new restrictions, he said the right answer is keeping people alive through the pandemic.
What about spring?
If the pandemic situation is about the same by next spring, there could be hiring again as the temperatures rise and outdoor seating expands. If a vaccine is available to the general public, that could also mean increased hiring again.
However, the hiring landscape next spring and summer could be much different if there isn’t state or federal aid, Pardue said.
“Many small businesses have already exhausted any buffer they may have had and without federal and state aid, they will not be able to survive another wave of increased cases and business restrictions,” Pardue said. “These business closures will lead to permanent job losses, which the Bellingham economy will have a much harder time recovering from.”
According to the Gusto report, the job losses will be felt the most in mid-size cities with populations under 200,000. Bellingham was in the top 20 among metro areas studied that it forecasts will have the highest percentage of job losses.
So what can be done to lessen the blow? Pardue said several government policy levers must be used to help small businesses.
“Most fundamentally, small businesses need additional aid to survive the winter as COVID cases continue to rise and additional restrictions are being imposed throughout the country,” Pardue said. “Local governments have an especially crucial role to play in ensuring these adjustments can be made quickly and efficiently by lowering permitting costs, streamlining the application process, and making clear that these costly adjustments will continue for a long period of time.”
