Colorado economists: 'We're in uncharted waters' but no reason to panic

Local economists weigh in on impact of COVID-19

Nick Puckett
npuckett@coloradocommunitymedia.com
Posted 3/20/20

March 17 was the first day of Yume Tran's new normal. The owner of Indochine Cuisine in downtown Parker, a Thai and Vietnamese staple of 17 years, sat at one of the dozens of empty tables in the …

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Colorado economists: 'We're in uncharted waters' but no reason to panic

Local economists weigh in on impact of COVID-19

Posted

March 17 was the first day of Yume Tran's new normal.

The owner of Indochine Cuisine in downtown Parker, a Thai and Vietnamese staple of 17 years, sat at one of the dozens of empty tables in the dining room of what would normally be the Tuesday evening dinner rush. It was the first day of a 30-day ban on dine-in services as ordered by Gov. Jared Polis to slow the spread of COVID-19. Except for the kitchen staff and a host, the entire restaurant was empty, serving only the occasional customers trickling in to pick up take-out orders.

Energetic and light-spirited, Tran said she is taking it one day at a time.

“We're still not used to not seeing certain regulars that come in certain days,” Tran said. “Now, it's sort of strange.”

Economists say it is too soon to tell what the long-term effects of the COVID-19 outbreak will have on Colorado's economy. The short-run effects have been evident. The order to stop sit-down service has severely hurt bars and breweries, forcing some to close, at least for now.

The spread of the novel coronavirus prompted the state to order the temporary closure of other businesses, including ski resorts, gyms, casinos and movie theaters.

Employers have been forced to reduce employee hours and sometimes make pay cuts or lay off staff.

“The local business community, particularly small businesses, are at the forefront of the crisis, as their revenues decrease significantly,” Leigh Seeger, vice president of the Jefferson County Economic Development Corporation, wrote in an email March 18.

On March 17, the Colorado Department of Labor and Employment reported unemployment claims increased from 400 on March 7 to more than 6,800 March 17. The CDLE stated in a March 17 news release it had experienced unprecedented traffic to the unemployment call center and file-a-claim website, leading to application processing delays. The department stated it is implementing system maintenance to keep up with the demand.

“We're in uncharted waters." said Patrick Holwell, workforce economist for Arapahoe/Douglas Works! Workforce Center. “Nothing like this has happened in most of our lifetimes.”

Holwell delivered a message of optimism, however, saying Colorado's approach to stopping the spread of the virus, and the strong leadership from the governor's office down to local levels, will help the entire state pull through the pandemic.

“We're going to make it through this because Colorado is not only a great place to live, but it's filled with a lot of great, bright people who are proactive in the face of all this,” Holwell said.

Gov. Jared Polis and members of Colorado's congressional delegation urged the Small Business Administration to designate small businesses in counties across the state eligible to qualify for Economic Injury Disaster Loans. The Small Business Administration approved the disaster declaration March 19.

Still going strong

Not all industries have been been hurt by the virus. Delivery, logistics, transportation, health care and some retail industries, like grocery stores and warehouses, have seen an increase in demand for goods and services, according to the CDLE. The CDLE plans to work with those industries to help workers who have had permanent cuts to their wages or hours find part-time work.

King Soopers and Safeway list hundreds of job openings across the Front Range, as some stores are spread thin due to the sudden panic shopping that has emptied store shelves.

Uber, a ride-sharing company, announced on its website March 16 it will be working to encourage orders from independent restaurants on its subsidiary app, Uber Eats, “to help make up for the significant slowdown of in-restaurant dining.”

Local chambers of commerce and economic development partnerships are stepping up to provide resources for how businesses can respond to the virus.

Tom Brook, CEO of the Denver South Economic Development Partnership, said communication will be critical to help local businesses stay informed on federal, state, local and private-sector business support initiatives and resources.

“We are best served by falling back on what has served us well historically and making sure we stay in communication and collaborate with each other,” Brook said.

After the pandemic

Economists hesitate to make any long-run prediction about the lasting impacts COVID-19 will continue to have on Colorado's economy once the pandemic ends, since it's unclear how long this will last. Brook noted the economy was in a good position — high wages, near-record-low unemployment rate —at the start of the pandemic as opposed to just before the 2008 financial crisis, the most recent recession in American history.

“To the extent we are able to effectively contain this from a medical standpoint quickly, we should be able to rebound quickly,” Brook said.

The mass closures and cancellations have forced businesses to adapt their workflow. The Centers for Disease Control and Prevention has recommended people stay home to work, if they can. Many employers across the country followed suit, providing work-from-home options for office employees.

“The face of American work will possibly change,” Holwell said. “I think there's going to be a lot more reliance on things like GoToMeeting” and other virtual meeting applications.

A bright side Holwell has seen is the amount of support from community members to help one another.

“We all know how vital it is to keep all these businesses going through the worst part of this so they can hit the ground running,” Holwell said. “People are starting to pull together. Nobody I know is giving up hope.”

Brook agreed it, saying he does not believe there is reason to panic.

“We've been through challenges before. Let's see how each day unfolds,” Brook said. “It's going to be a challenge. It's incumbent on us to say together, work together and have faith.”

Tran seconds that.

“We've been very positive,” Tran said. “When you're a business owner, you have a responsibility to your team. Not just to give them a paycheck. They look at you as their future. They want to know: 'Am I going to be OK?'

“You want to tell them: 'We have a plan. We don't know if it's going to work or not, but we darn well have a plan every single day.'”

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