With vaccinations becoming increasingly accessible both locally and nationally, many understandably might feel cautiously optimistic about what the future holds.
Could 2021 — so far, feeling more or less like an extended version of a long and tumultuous 2020 — see everyday life get closer to its pre-COVID state? With millions of people having lost their jobs, or found themselves furloughed/working reduced hours, one question posed by a return to “normalcy” is whether the economy, and the state of unemployment more generally, could see an upturn.
Mid-March, 425 Business reached out to state Employment Security Department economist Anneliese Vance-Sherman for her insights and projections on the year ahead. What might we see in the coming months? And what — if anything — can we be optimistic about?
A Year of COVID-19
Reflecting on what she’s seen in the last year, Vance-Sherman, whose specialty area includes Washington communities like Snohomish County and the Eastside, noted that it’s important to honor and acknowledge the impact of COVID- 19 on every industry and location. There isn’t anyone or anything that hasn’t been affected.
As of press time, the most recent reading on the King County unemployment rate was 6.8 percent, marking a notable decrease from last April’s peak of 14.9.
Looking at the Eastside specifically, Vance- Sherman noted that the region “weathered the storm relatively well” in 2020 compared to, for instance, South King County, whose SeaTac saw a 22.5 percent unemployment rate in the spring.
Vance-Sherman said the Eastside’s relative steadiness can be attributed to the significant regional presence of employers in high-tech industries such as software publishing and professional services. Given their emphasis on technology, these fields are unsurprisingly better equipped to accommodate flexible working situations.
Snohomish County, in contrast, saw one of the highest unemployment rates in the state in the last year. In April 2020, its rate found an apex at 19.2 percent. In December, Southern Snohomish County communities closest to Seattle typically fared better than those near Everett and other northern landmarks — something Vance-Sherman said also can be attributed to the dominant industry structure: In Snohomish County, 1 in every 5 jobs is aerospace-based.
“The challenges faced by Boeing this year have rippled throughout the community, and have translated into a challenging recovery by comparison,” Vance-Sherman said in an email.
Will We “Bounce Back”?
Notions of a “return to normal” will likely not be so cut-and-dried — there will still be new developments to adjust to.
“The fact that we have collectively lived a different lifestyle over the past year implicitly means that we have changed our habits and rhythms,” Vance-Sherman said. “I think it will take some time to return to ‘normal’ now that we are entrenched in new habits. Many businesses have succumbed to or will continue to suffer as a result of the new operating environment.”
Vance-Sherman doesn’t think the state will necessarily “bounce back” this year — uncertainty will likely continue to afflict decision-making.
“Businesses bounced back a bit over the summer, but job recovery has slowed in the meantime,” she said. “Many of the jobs that bounced back were able to do so because of one-time investments such as PPE, plexiglass, and new telework policies. Deployment of vaccines will absolutely make a big difference. While we navigate the process (which seems long, but is remarkably fast, when you think about it), uncertainty will continue to inform how individuals, families, businesses, and lawmakers navigate the environment.”
Vance-Sherman is currently most concerned about vulnerable populations affected by unemployment. The majority of people who saw their employment affected during the pandemic held low-wage jobs — and many of those jobs aren’t necessarily going to reappear once health measures have safely loosened. The economist worries about a “devastating next phase to the current crisis” for vulnerable communities once eviction moratoriums lift, unemployment insurance benefits expire, and utilities turn off for nonpayment.
Sectors best equipped to handle COVID-19-related obstacles — like online retail, information, manufacturing, some R&D, and others — will inevitably also be the ones to see the fastest recoveries as health mandates slacken. Vance-Sherman said that food production (with areas including farming, processing, transportation, and grocery stores) is also well-positioned for recovery, as are industries making medical products and PPE.
Naturally, recovery for industries like leisure, hospitality, and tourism won’t be as straightforward, since their successes are far more contingent on the personal comfort of clients.
“Until people consistently feel safe going out (and are in the practice of doing so) and are comfortable traveling, industries in this space will continue to struggle,” Vance-Sherman said.
Even though the road to recovery is likely to be rocky, Vance-Sherman highlighted a silver lining. One thing the last year has unequivocally proven (just look at the commitment to mask-wearing, telecommuting arrangements, physical distancing, and alternative ways of offering services) is that humans, in the face of adversity, find ways to adapt — something one can be sure of for 2021.
For additional forecast details, check out the Washington State Economic and Revenue Forecast Council’s most recently quarterly forecast here.