Romer: We need to do more to help the economy
Since the COVID-19 pandemic started earlier this year it was clear that the length and severity of its impact would largely be unknown. It is clear more needs to be done to address the unforeseen impact of COVID-19 on the economy and workforce. Several states that were in the early stages of reopening are once again hitting the pause button, and businesses are once again being forced to close their doors. For the travel and hospitality industry, the economic fallout has hit Colorado’s mountain communities particularly hard.
Now that the second quarter is over, it is a good time to take stock of where the economy and recovery stand. The data over the last few weeks shows an economy that bottomed out in May, halfway through the second quarter, and rebounded in June.
That rebound will not be enough to prevent a recession of historical depth though. The textbook definition of a recession is two consecutive quarters of negative growth. We already know that first quarter growth was -5 percent. The second-quarter drop will be substantially deeper.
Estimates vary from approximately -30 percent to -40 percent, all of which would be record-setting. On average, forecasters see the economy contracting over 34 percent on an annualized basis.
While the Paycheck Protection Program was a good first step, it did not go far enough or provide the flexibility businesses need to remain open and retain their employees through the pandemic. As PPP funds run out (and have already run out for many), we are likely to see unemployment spike and businesses shut their doors for good.
Since the start of the pandemic over 48 million unemployment claims have been filed. This number will only increase as businesses operate at significantly reduced capacities in an environment where they could be forced to close again and again with little notice.
That’s why I’m calling on our congressional representatives, Scott Tipton and Joe Neguse, and our senators, Cory Gardner and Michael Bennet, to do more to help the American economy weather the uncertainty of COVID-19. Eagle County’s businesses need financial assistance and flexibility to retain and rehire staff, pay rent, adapt to new safety requirements, meet certain debt obligations, and pay state and local taxes. It will be a vital lifeline to the hospitality and tourism industry as well as other industries that drive our economy.
Even with the restoration of 4.8 million jobs in June, tens of millions more Americans remain out of work. 22 million Americans lost their job in March and April combined. With the most recent jobs report, the U.S. economy has only brought back 7.3 million (including 2.5 million in May), leaving over 14.5 million Americans still unemployed due to the shutdown.
To put this to a pre-COVID scale, 19.3 million Americans filed continuing claims last week. That number remains 10 times the approximately 1.7 million Americans filing continuing claims before the pandemic began. Add to that the fact the survey ended on June 13, and since then COVID-19 outbreaks have spiked across large parts of the country, causing governors to roll back phased reopenings.
The collective economic data shows an economy that bottomed out in May and began recovering in June. A big caveat — that applies to all data compiled last month (before the recent spike in COVID-19 cases).
These times are tough — but our people are tougher, and with the help of Congress, our businesses and communities will navigate an ever-evolving environment and keep our community employed through the pandemic.
Chris Romer is president and CEO of the Vail Valley Partnership, the regional chamber of commerce. Learn more at www.vailvalleypartnership.com.