Massive economic disruptions ahead as businesses in Washington state brace for upswing in coronavirus infections
03/06/2020 / By Franz Walker / Comments
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Massive economic disruptions ahead as businesses in Washington state brace for upswing in coronavirus infections

With 51 confirmed coronavirus cases and 10 deaths, King County has been the center of the outbreak in Washington state. Now, county officials are suggesting its over two million residents to work from home in an attempt to reduce the number of infections.

“Workplaces should enact measures that allow people who can work from home to do so,” said King County officials in a statement Wednesday night. “Taking these measures can help reduce the number of workers who come into contact with COVID-19 and help minimize absenteeism due to illness.”

In addition to the recommendation, officials are also encouraging people at higher risk of severe illness to stay away from large groups of people and to stay at home. Included in the list of people at higher risk of severe illness are those who have underlying health conditions (including heart disease, lung disease or diabetes), have weakened immune systems, who are pregnant and who over the age of 60. Meanwhile, they’re also recommending that people avoid visits to hospitals, long term care facilities, and nursing homes. The latter shouldn’t come as a surprise as most of the confirmed cases have come from the Life Care Center nursing home in Kirkland.

Work from home raises fears of economic disruption

With people being asked to work from home, some are fearing massive economic disruption at a similar scale to that which is happening in China. Since the Chinese government’s lockdown of industrial cities like Wuhan, the country’s industrial output has gone down drastically. (Related: COVID-19 outbreak hits drug factories, pharmaceutical shortage now inevitable.)

The downturn in China’s industrial output has produced a knock-on effect that’s affecting businesses around the globe. An overwhelming number of companies rely on Chinese factories to provide the products that they sell — products that are no longer reaching company warehouses, let alone store shelves, due to the quarantine.

The spread of the virus is primarily a massive supply shock to the Chinese economy. Production across the country is severely affected by closed factories,” stated Stefan Legge, an economist and trade expert at the University of St. Gallen in Switzerland.

While not as large an economic powerhouse as China, King County is Washington state’s most populous county that also includes the cities of Seattle and Redmond. The latter houses the headquarters of Microsoft. Meanwhile, tech giants Amazon, Google and Facebook all have offices in Seattle.

Most of these companies, however, have already either allowed or outright ordered their employees in the county to work from home. Being in the information technology and software sector, these companies are probably the least affected by having employees working from home.

Dangers the next county over

A bigger threat to the economy may lie not in King County, but in neighboring Snohomish County. The latter has already seen 18 confirmed cases of COVID-19, making it second only to King County in terms of confirmed cases. Snohomish County is also home to Boeing’s Paine Field assembly plant in the city of Everett.

The Paine Field assembly plant is the largest building in the world by volume and builds some of the world’s largest passenger planes, including the 747, 777 and 787. It also serves as Everett’s largest employer, with over 30,000 people working in the factory. Should the factory be forced to shut down, even temporarily, these 30,000 people would be out of work.

A shut down would also be another blow to Boeing. The aerospace giant is currently embroiled in a scandal after two of its new 737 MAX airliners crashed within five months of each other, causing the fleet to be grounded. The crashes and their ongoing investigation has been estimated to have cost Boeing at least $18.4 billion in 2019 from canceled 737 MAX orders, legal costs, production line suspensions.

The problems with the 737 MAX are already expected to have negative consequences not only on Boeing but on the U.S. aviation industry as a whole. A forced shut down of Boeing’s Paine Field plant could have even direr implications for an already battered industry.

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