House passes $2.2 trillion pandemic relief bill; major financial assistance to individuals, businesses, states, and local governments.

The House concurred with the Senate coronavirus legislation. The Associated Press reports,

The House approved the sweeping measure by a voice vote, as strong majorities of both parties lined up behind the most colossal economic relief bill in the nation’s history. It will ship payments of up to $1,200 to millions of Americans, bolster unemployment benefits, offer loans, grants and tax breaks to businesses large and small and flush billions more to states, local governments and the nation’s all but overwhelmed health care system.

Trump said he would sign the measure immediately.

According to the Tax Foundation,

The bill includes:

  • Expanded unemployment insurance (UI) for workers, including a $600 per week increase in benefits for up to four months and federal funding of UI benefits provided to those not usually eligible for UI, such as the self-employed, independent contractors, and those with limited work history. ..Additionally, the federal government will fund an additional 13 weeks of unemployment benefits through December 31, 2020 after workers have run out of state unemployment benefits.
  • $350 billion allocated for the Paycheck Protection Program, which is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from February 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities and would be reduced proportionally by any reduction in employees retained compared to the prior year and a 25 percent or greater reduction in employee compensation.
  • Recovery Rebate for individual taxpayers. The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers). Additionally, taxpayers with children will receive a flat $500 for each child…We estimate that the rebates would increase taxpayer after-tax income by about 2.59 percent, ranging from 16.33 percent at the lowest quintile and dropping to 1.89 percent for the 80th to 90thpercentiles…We estimate that nearly all filers below the 80th percentile will receive a rebate, but only 0.1 percent of filers above the 99th percentile will receive a rebate due to the rebate phaseouts.

Much more in the TF analysis. From the AP,

It is unlikely to be the end of the federal response. Pelosi said issues like more generous food stamp payments, aid to state and local governments and family leave may be revisited in subsequent legislation.

The magnitude of the federal commitment is hard to conceptualize.

The bill finances a response with a price tag that equals half the size of the entire $4 trillion-plus annual federal budget. The $2.2 trillion estimate is the White House’s best guess of the spending it contains.

In addition to the small business relief mentioned above,

The legislation also establishes a $454 billion program for guaranteed, subsidized loans to larger industries in hopes of leveraging up to $4.5 trillion in lending to distressed businesses, states, and municipalities.

Emily Makings at the Washington Research Council earlier wrote of the negotiated agreement that Washington stood to receive $3 billion in assistance.

As passed by the Senate, it includes $150.0 billion for a relief fund for state, local, and tribal governments (Sec. 5001). (This is the amount that the National Governors Association requested.)

Of the $150.0 billion, $8.0 billion would be reserved for tribal governments and $3.0 billion would be reserved for DC, Puerto Rico, and other territories. Each state would receive at least $1.25 billion. The remaining $76.5 billion would be split among the states according to population. Jared Walczak of the Tax Foundation estimates that Washington would receive about $2.95 billion.

Additionally, the federal government would make direct payments to certain local governments from the amount reserved for those localities’ states. Counties and cities with populations of at least 500,000 would be eligible. In Washington, this includes King County, Pierce County, Snohomish County, Spokane County, and Seattle.

She provides estimates of what each jurisdiction will receive. According to her calculations, the state would get just over $2 billion Important:

…governments may only use these funds for “necessary expenditures incurred due to the public health emergency” from March 1, 2020 to Dec. 30, 2020. Additionally, they may only be used for costs that were not accounted for in the most recently approved state or local budget.

That means that these federal funds would be in addition to the $200 million that has been appropriated from Washington’s rainy day fund in response to COVID-19 (even though EHB 2965 states that federal funds must be used first, if available, and that any federal reimbursements must be deposited in the rainy day fund).

Now to see how quickly the money flows to eligible parties.

133,000 new state unemployment claims last week, a 9x increase from prior week.

Yesterday we wrote about the 3.3 million unemployment claims filed last week. Our state saw a similarly dramatic bump. Seattle Times business reporter Paul Roberts writes,

According to the latest report by the state Employment Security Department, (ESD) more than 133,000 Washington residents filed for jobless benefits last week — an increase more than ninefold from a week earlier — as the shutdown of nonessential commercial activities to halt the pandemic also slows the state’s economy.

“We haven’t seen anything like this in volume and velocity [of claims] in the history of the unemployment insurance program — and that goes back [to] 1930, when it started,” said ESD commissioner Suzi LeVine during a conference call with reporters Thursday morning.

By comparison, LeVine said, the number of claims last week — 133,464 — was more than five times higher than in any week during the Great Recession.

And we’re far from out of it yet. Gov. Inslee says the state may extend the stay-at-home order.

Washington state appears to be achieving some “very modest improvement” in its battle against the coronavirus pandemic, but the state has not “turned the corner” and its stay-at-home order may need to be maintained beyond two weeks, Gov. Jay Inslee said Thursday morning.

Add construction workers to those furloughed by the order. Washington Research Council analyst Emily Makings explains that an unusual feature of Washington’s tax code means the halt to construction magnifies the revenue hit to the state general fund.

Of course, the stay at home order—with so much economic activity put on hold—will have a negative impact on state revenues. The hold on construction will have a disproportionately negative impact: in Washington, construction labor is subject to the state sales tax.

As we wrote in 2007, “Thus a dollar of earnings in the construction sector is fully taxed when it is earned as well as partially taxed when it is spent. This suggests that earnings from the construction sector should have a larger impact on sales and use tax revenue than other earnings.”

WRC economist Kriss Sjoblom has graphed the unemployment spike.

He also has charted claims by industry. Food service and the arts are among those most heavily hit, though the claims range across the economy.

Senate passes $2 trillion coronavirus economic relief bill, House expected to act soon. Necessary aid to individuals, businesses.

The U.S. Senate has passed legislation to provide relief to individuals, governments, and businesses reeling from the economic shutdown. Negotiations are ongoing, though it appears this bill will be close to the final product. The Tax Foundation has a good analysis of key elements of the bill. Below we clip parts of the analysis and encourage you to read the whole thing.

The bill includes:

  • Expanded unemployment insurance (UI) for workers, including a $600 per week increase in benefits for up to four months and federal funding of UI benefits provided to those not usually eligible for UI, such as the self-employed, independent contractors, and those with limited work history…
  • $350 billion allocated for the Paycheck Protection Program, which is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from February 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities and would be reduced proportionally by any reduction in employees retained compared to the prior year and a 25 percent or greater reduction in employee compensation.
  • Recovery Rebate for individual taxpayers. The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers). Additionally, taxpayers with children will receive a flat $500 for each child. The rebates would not be counted as taxable income for recipients, as the rebate is a credit against tax liability and is refundable for taxpayers with no tax liability to offset. The rebate phases out at $75,000 for singles, $112,500 for heads of household, and $150,000 for joint taxpayers at 5 percent per dollar of qualified income, or $50 per $1,000 earned. It phases out entirely at $99,000 for single taxpayers with no children and $198,000 for joint taxpayers with no children… 

Some crucial business provisions:

  • Employers are eligible for a 50 percent refundable payroll tax credit on wages paid up to $10,000 during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50 percent or more when compared to the same quarter last year. The credit is available for employees retained but not currently working due to the crisis for firms with more than 100 employees, and for all employee wages for firms with 100 or fewer employees.
  • Employer-side Social Security payroll tax payments may be delayed until January 1, 2021, with 50 percent owed on December 31, 2021 and the other half owed on December 31, 2022. The Social Security Trust Fund will be backfilled by general revenue in the interim period.

Also,

  • $454 billion in emergency lending to businesses, states, and cities through the U.S. Treasury’s Exchange Stabilization Fund. Additionally, this includes $25 billion in lending for airlines, $4 billion in lending for air cargo firms, and $17 billion in lending for firms deemed critical to U.S. national security. Firms taking loans must not engage in stock buybacks for the duration of the loan plus one year and must retain at least 90 percent of its employment level as of March 24, 2020. Loans also come with terms limiting employee compensation and severance pay for firms taking loans. Emergency lending will be overseen by a Congressional Oversight Commission and a Special Inspector General.

Much more in the report. The Seattle Times reports on what the $2 trillion bill may mean for Washington. The story includes a state budget warning.

The full effect of the shutdowns of business and daily life on state government coffers won’t be known until the next revenue forecast in June, but the state’s budget director said an employment and tax-collection crash is surely coming.

“We know that coming up we are going to have tremendous problems. We are likely going to lose billions of dollars in the revenue forecast that is coming,” said David Schumacher, director of the state Office of Financial Management. “We have about $3 billion in reserves, thankfully, but we have to plan for a day when we spend through that just to keep current services.”

Separately, the news from the Federal Reserve is encouraging.

Jerome Powell says the Federal Reserve would provide essentially unlimited lending to support the economy as long as it is damaged by the viral outbreak…

The economic rescue bill approved by the Senate early Thursday includes $425 billion that the Treasury could use to backstop the Fed. That would allow the Fed to boost its lending programs to an astronomical $4.25 trillion.

An article from Harvard Business School’s “Working Knowledge” makes clear just how vital cash is to small business.

Small-business owners trying to weather the coronavirus pandemic will face a financial blow that’s likely to be worse than what they experienced during the Great Recession more than a decade ago, says Karen G. Mills, senior fellow at Harvard Business School.

“This is going to be orders of magnitude worse than the financial crisis,” says Mills, who led the United States Small Business Administration from 2009 to 2013. “Many small businesses will not survive more than a month.”

The article draws heavily on a report from the J.P. Morgan Chase Institute analyzing small business cash reserves. It’s a graphic-rich, clearly-written report that paints a stark picture of businesses operating on a financial tightrope.

We find that, despite the importance of cash reserves, most small businesses hold a level of cash reserves that would provide an insufficient cushion in the face of a significant economic downturn or other disruption. Using a new data asset constructed from over 470 million transactions conducted by 597,000 small businesses from February to October 2015, our analysis shows that half of all small businesses hold a cash buffer large enough to support 27 days of their typical outflows.

As this graph from the HBS piece shows, restaurants operate on the knife edge, with just 16 days of reserve.

Financial support for small business has emerged as a critical component of the Congressional recovery package. More from HBS, 

After all, small businesses generate almost 2 million net new jobs a year and employ 47 percent of the workforce. Even though macroeconomists rarely give them their due, Mills says, small businesses contribute 44 percent of US gross domestic product. Helping them withstand a brutal cash crunch will support the broader economy, Mills says. [That’s Karen G. Mills, senior fellow at Harvard Business School and former head of the U.S. Small Business Administration.]

“This is the number one thing that we can do to keep our economy going during this particular crisis,” she says. “This is about helping small businesses, but it’s also about helping their employees and their families. They need to know that there will be a job and a paycheck when we get to the other side of this crisis.”

We’ll give Mills the conclusion:

“Small businesses are the very fabric of our communities, all across the country,” Mills said. “Days matter at this critical time. If we lose these small businesses, our communities are going to look very different when all is said and done, and it will take a long time to bring back the businesses we will have lost.”

Claims for unemployment benefits up 3.3 million, setting new record.

Even when it’s expected, the jump in  unemployment startles. Today’s report from the Bureau of Labor Statistics tells the story of the pandemic’s toll on the economy.

In the week ending March 21, the advance figure for seasonally adjusted initial claims was 3,283,000, an increase of 3,001,000 from the previous week’s revised level. This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series. The previous high was 695,000 in October of 1982. The previous week’s level was revised up by 1,000 from 281,000 to 282,000. The 4-week moving average was 998,250, an increase of 765,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 232,250 to 232,500.

“The previous high was 695,000.” Now we’re at 3.3 million. 

Bill McBride published a chart in Calculated Risk that shows how the spike in initial claims compares with previous recessions. There’s really nothing comparable. 

He adds,

At the worst of the Great Recession, continued claims peaked at 6.635 million, but then steadily declined.

Over the next few weeks, continued claims will increase rapidly to a new record high, and then will likely stay at that high level until the crisis abates.

When that is, who knows? Please. Soon.

The Associated Press reports,

As job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%…

Ellen Zentner, an economist at Morgan Stanley, said in a note to clients that 17 million jobs could be lost through May — twice the entire 8.7 million jobs that were lost in the Great Recession. She expects the unemployment rate to average 12.8% in the April-June quarter, which would be the highest level since the 1930s.

Still, Zentner also expects the economy to start recovering by the second half of the year. It will take time for things to return to something close to normal, she projects: The unemployment rate could still top 5% at the end of next year.

Last week we noted skyrocketing claims in our state.

Preliminary assessment of pandemic’s effect on state budgets; California anticipates drop in capital gains revenues.

Gov. Inslee’s new “stay home – stay healthy” order underscores the rapidly evolving policy responses to the coronavirus pandemic. Economists anticipate the order will accelerate the economic downturn. At the same time, experts agree that resolving the public health crisis is a necessary precondition to restoring economic health. 

In The Seattle Times, Paul Roberts reports,

Economists and business owners said Monday that Gov. Jay Inslee’s order for state residents to stay at home will land hard on a local economy already reeling from weeks of closures and declining business.

The order, which closes the physical locations of all nonessential businesses in the state, seemed largely supported by business leaders as a critical step in minimizing the economic fallout of the pandemic.

“We can’t allow certain nonessential activities to undercut our collective efforts to mitigate the spread” of the coronavirus, said Jon Scholes, CEO of the Downtown Seattle Association.

Similar actions have been taken in other states. A recession is virtually assured; the critical questions are how deep and how long. The toll on workers, business owners and others will be mirrored in the hit to public sector budgets. Funding for essential government services will be affected, possibly severely, and policymakers are already considering how to respond. 

In City Journal, Steve Malanga writes in a short piece we recommend reading in its entirety,

Even before any recession actually hits, states are tapping their reserves to pay for resources in the fight against Covid-19, meaning that they’ll have even less of a budget cushion should an economic downturn become severe. Washington State legislators, for instance, authorized drawing $200 million from their surplus fund for added health-care spending and to help pay for looming unemployment claims.

He highlights how tax structures will influence the revenue impacts.

Some states have designed their tax structures to collect a disproportionate share of revenue from upper-income residents. That makes their receipts volatile, especially during turbulent times, when so much of the income of high earners comes from capital gains, which have vanished suddenly. Income tax accounts for 70 percent of California’s general-fund revenue, and the state’s top 1 percent of earners pay almost half of all taxes. Among those earning $500,000 or more a year, capital gains account for 25 percent of their income. The state bases its current budget projections on the S&P 500 stock index trading around 3,120—but the index is currently at about 2,304, and instead of reporting fat gains, many of those tax filers may claim large capital losses, which will reduce their tax payments.

In addition to California, the states with the most financial-market sensitivity in their tax structures are New York, Connecticut, Massachusetts, and Oregon, according to a recent S&P Global Ratings report.

Progressive tax policies are notably volatile. The California Legislative Analyst’s Office has a preliminary analysis of the pandemic’s budget impact. With respect to capital gains:

Even in “normal” times, capital gains income is difficult to forecast because it correlates with stock market performance. The Governor’s budget projected tax revenues from capital gains income of about $30 billion across 2019‑20 and 2020‑21. This estimate assumed that the average price level for the S&P 500 stock index would remain relatively flat from late 2019 through the first half of 2020, with gradual price appreciation thereafter. Similar to our November Fiscal Outlook, the Governor’s budget acknowledged that a market correction represented a significant downside risk to the forecast. Although we do not know how the market will perform going forward, the recent price drops give us tangible information about one way in which COVID-19 could affect California’s budget…

…absent a more rapid recovery than has occurred in any modern market downturn of this severity, it appears likely that the average price level will wind up lower than the budget assumption. A preliminary analysis conducted by our office indicates a very high likelihood that tax revenues from capital gains income will be several billion dollars lower than what the Governor’s budget assumed.

The Washington state budget will, of course, be negatively impacted by the economic slowdown. Still, proponents of progressive income taxes and capital gains taxes may find reason to temper their enthusiasm as the crisis shows the fragility of tax structures that rely on tapping the gains of upper-income taxpayers.

Seattle activists file for November ballot initiative to tax large corporations for … something.

As COVID-19 disrupts the global economy, with Seattle the U.S. epicenter of the pandemic, the city’s activists plow ahead with their “tax big business” tactics. Today, The Seattle Times reports,

Boosters of a new Seattle tax on large corporations such as Amazon, including City Councilmember Kshama Sawant, have filed a petition to put an initiative on the ballot this year, they said Thursday.

They’re aiming for the November ballot and say the tax could raise $300 million a year, though those calculations were made before coronavirus disrupted the economy, spokeswoman Eva Metz said.

When first proposed, the tax was to combat homelessness. The “…for something” in our headline was prompted by this:

In recent days, Sawant and Morales have suggested their tax on big businesses could initially fund coronavirus relief efforts, and Sawant has argued it should raise even more — as much as $500 million a year.

It’s in flux. While the backers continue to castigate large corporations, large businesses – their supply chains, innovations, technology, financial reserves, and distribution systems – are playing a vital role in the global response to the pandemic. 

In its report on the initiative, Geek Wire writes,

Amazon is funding a variety of initiatives to help mitigate the consequences of the coronavirus pandemic. The company is providing grants to small businesses in its neighborhood. Retail operations that rent space in Amazon buildings will have rent covered through April, the company said. Amazon is also hiring 100,000 warehouse workers.

Amazon and Microsoft each donated $1 million to a relief fund organized by Seattle nonprofits to help organizations on the frontlines of the crisis.

More hard times await. Economists predict the quarterly downturn to be the second steepest in history.

“In a downside scenario, the economy could contract 14% in the (quarter) outstripping the 10% plunge seen in 1958 and extend the contraction to the second half of the year,” wrote Bloomberg economists Carl Riccadonna, Yelena Shulyatyeva and Andrew Husby in a March 20 research report.

Economist Arnold Kling writes that we should not expect a return to pre-pandemic normal. Read his short piece to understand what he means by that; it’s clear and compelling. Looking ahead, he says a transformation in the way we do business. Here’s part of it.

Pre-crisis, our patterns of specialization and trade were optimized for efficiency at the expense of fragility. Expect supply chains in the future to have a lot more redundancy and to be less driven by cost minimization. The Chief Risk Officer’s approval will now be needed before the CEO will approve a major new supply contract.

We will develop a lot of what you might call social-distancing capital, including the ability to make use of remote meetings and distance learning. Last night, some folks attempted a virtual session of dancing. Most of the time was spent getting a bunch of old people up to speed on using Zoom. Next time, we might be able to dance. People will get accustomed to new forms of entertaintment.

Many sectors were way too levered–households with too little savings and too much debt, businesses with too little cash reserves and too much debt, and governments with too much debt and unfunded liabilities. Behavior is likely to change going forward.

America is poised to do better than many countries.

De-globalization is taking place, and that will produce losers and bigger losers (it won’t produce many winners). Become familiar with Peter Zeihan’s way of viewing the world. Don’t take the international order for granted. Zeihan emphasizes that the U.S. is one of the few countries that produces enough food and energy for itself. 

With what’s at stake, what’s a risk, the campaign to tax and blame large successful corporations  looks anachronistic, ill-conceived and divisive. The challenges ahead are daunting. City leaders should be working with the region’s top business leaders to mitigate the crisis and spur the recovery. And many of them are. This initiative is at best a distraction; at worst, a serous impediment.

Skyrocketing unemployment insurance claims, nationally and here in Washington. More expected as shutdowns continue.

Consider this:

  • Last week, we saw a 150% increase in claims, and we are seeing an even more dramatic increase this week.

That’s the first bullet in a statement by Washington State Employment Security Department Commissioner Suzi LeVine. It’s an astonishing statistic, with obvious public policy implications. 

The Seattle Times reports,

Nationally, unemployment claims jumped by a third last week over the prior week, according to the labor department. But the increase has been even sharper in Washington.

Statewide, 14,846 unemployment insurance claims were filed during the week that ended last Saturday. That’s more than double the number from a week earlier, according to department figures released Thursday.

ST business reporter Paul Roberts makes the comparison to the Great Recession.

And unlike during the Great Recession, when claims increased gradually, “this is all happening at once,” said Nick Demerice, a spokesperson for the Employment Security Department, adding that much of the funding for the payouts back then came from the federal government.

The state’s jobless rate will likely rise. It was 3.8% in February. At the height of the Great Recession, in 2010, Washington’s seasonally adjusted unemployment rate hit 10%. On Wednesday, Treasury Secretary Steven Mnuchin reportedly warned congressional leaders that the national unemployment rate could hit 20% without strong federal action.

Washington Research Council economist Kriss Sjoblom writes that we can expect a few months of escalating figures. And WRC analyst Emily Makings looks at how the state is addressing the crisis using the UI system.

EHB 2965, the bill that makes appropriations from the rainy day fund for the response to COVID-19, includes $25.0 million for a new COVID-19 unemployment account. Normally, when workers are laid off, their unemployment insurance benefits are charged to their former employers, whose UI tax rates then increase (this is called experience rating). Under EHB 2965, the UI benefits given to employees who were temporarily laid off due to COVID-19, were approved by ESD to be on standby, and returned to their same employment will be reimbursed by the COVID-19 unemployment account instead of being factored in to the employer’s experience rating.

Until June 30, 2021, the bill also allows employees under quarantine to meet UI work requirements if they are “able to perform, available to perform, and actively seeking work which can be performed while under quarantine or isolation.” (Normally, individuals must be able and available for any work for which they are “reasonably fitted.”)

While it’s impossible to know with certainty how this will continue to unfold, Makings points out that the state UI system is among the best funded in the nation.

UI benefits are paid from the state’s UI trust fund (which is funded by employer taxes). According to DOL, as of Jan. 1, Washington’s UI trust fund balance was $4.778 billion. That is the second highest trust fund balance in the country, after Oregon ($5.055 billion). (ESD’s November 2019 UI trust fund forecast noted that the trust fund held $4.86 billion as of Nov. 30, 2019, which was about 15.5 months of benefits. In 2008, the trust fund held about 21.2 months of benefits.)

 

 

Recession risk rises, compounding revenue forecasting challenges. New Seattle area economic impact study.

The economic impact of this pandemic won’t be known until after the public health crisis ends. While no one knows when that will be, it’s clear that the economic damage has already begun to set in.

In The Lens, TJ Martinell reports the state’s chief economist is watching this closely.

Also preparing for a downturn is ERFC Executive Director & Chief Economist Steve Lerch. “I was hoping to avoid a recession during my tenure. Now I’m not so sure.”

…Lerch also told Lens that with regional economic downturns, “the rest of the country can at times pull others through those periods. That’s what troubles me about this (virus). This is a worldwide impact. This is hitting the entire industrialized world.”

While the historic drop in the Dow Jones may ultimately trigger a downturn, actual economic data covering the time period most impacted by the virus in Washington won’t be available for a while.

Washington Research Council economist Kriss Sjoblom explains,

The slowdown in economic activity due to COVID-19 really started in early March. For monthly and quarterly taxpayers, taxes on March activity will be remitted to the state in April and will be reported in ERFC’s Economic and Revenue Update for May. It will thus be two months before we see the effect of COVID-19 on state revenues.

Emily Makings with the WRC also calls attention to a Route Fifty story on the pandemic’s effect on state budgets. Washington is among those featured.

David Schumacher, director of Washington’s Office of Financial Management, said that when he looks at the public health crisis in his state strictly from a budgeting perspective, he is more concerned about lost revenues than the additional costs. 

“We may end up spending a few hundred million dollars addressing the public health problem,” he said. “But we could lose a few billion.”

“That’s the bigger budget crisis,” Schumacher said, “the revenues dropping through the floor.” For now, though, he added: “We just have no idea what this is going to mean to the economy. Is this going to last two weeks, two months, six months?”

In The Seattle Times, Daniel Beekman reports on a metro Seattle economic impact study. The numbers are daunting.

More than 400,000 workers in the Puget Sound region are in industries facing immediate risk due to impacts from the coronavirus pandemic, and more than 500,000 additional workers are in industries facing near-term risk, says a white paper commissioned by the Seattle Metropolitan Chamber of Commerce and released Wednesday.

The region’s economy is experiencing “an economic shock that will take many months and beyond to recover from,” with impacts likely to result in wage reductions or temporary layoffs in about 40% of all jobs in King, Pierce and Snohomish counties, says the study by the Seattle-based research firm Community Attributes Inc. (CAI).

Yes, it will end, the study points out. But the post-virus economy will be different.

“Many of these jobs will start again once the virus threat has passed and the economy starts up again,” the study says. “Not all businesses will survive this challenge.”

This chart for the report does a great job of depicting the cycle.

As Beekman did, we’ll give the last word to the study’s sponsor.

“This is hard. This is painful. And this is the time to rally together,”  Chamber Vice President Markham McIntyre said in a statement.

“We are 2-3 weeks ahead of many other areas across the country. Our collective response to the crisis will be the model for other communities. Let’s continue doing everything we can to help the businesses and workers who are particularly vulnerable to the outbreak and its economic impact, and let’s stick together,” McIntyre said.