At the midpoint of a year unlike any that most Americans have seen, headlines tell a bleak story:
Coronavirus affects millions in United States
Nearly half of U.S. population unemployed
COVID-19 cases spike as states reopen
Indeed, because of the global coronavirus pandemic and its ongoing effects, everyday life is vastly different from what many expected as 2020 began. Countless workers in the Federal Reserve’s Tenth District and across the country are sorting out the damage to their household finances, health and well-being. Community organizations, some strapped for funding even before the pandemic, face the challenge of providing vital services as clients’ needs multiply. Businesses that managed to remain afloat during social restrictions are struggling to rebuild revenue streams, or find new ones. Meanwhile, Federal Reserve experts are putting the historic economic turmoil into context.
“The COVID-19 pandemic and the associated efforts to contain it have led to a decline in economic activity unprecedented in both severity and speed,” Kansas City Fed Research and Policy Officer Jason P. Brown and Senior Policy Advisor Alison Felix wrote in an Economic Bulletin published in mid-June.
To illustrate the Main Street impact across the Tenth District, the Kansas City Fed interviewed workers, business owners and community leaders who described how their lives were affected during the early months of the pandemic. Their stories are shared as the region takes hopeful but uncertain steps toward regaining economic footing.
New Mexico: A career on hold
Angelica Rios thought she had a good career planned. After all, Albuquerque’s economy was looking stronger than it had in a while. And Rios was working in one of the fastest-growing occupations as a home health aide.
However, several weeks before COVID-19 shutdowns began in New Mexico, Rios began to suffer a cough and runny nose. With personal health being an important part of the job of caring for others, she decided to stop working as a caregiver. By the time she recovered, the pandemic had taken hold, and an immediate return to home health care was not viable.
For now, Rios is working for a food delivery service. The job was available when she needed one, and she can pick her hours, “But caregiving is more rewarding,” Rios said. “The care you give at the end of life – which is the care I specialize in – is some of the most rewarding things in the world because you are the last person they are spending time with. You are making their lives more enjoyable putting a smile on their face … I think that is so much more rewarding than just delivering food to people.”
There was a lot of optimism about Albuquerque’s economy before the pandemic.
“Albuquerque’s economy is now on an upward trajectory,” Synthia Jaramillo, director of the nonprofit Albuquerque Economic Development organization, wrote in a January 2020 guest column in the Albuquerque Journal. “ … for the first time since 2008, we passed pre-recession peaks for total employment. Jobs are growing, workers have access to training, and businesses are staying open and in Albuquerque.”
In September 2019, the U.S. Bureau of Labor Statistics highlighted the health-care industry as brimming with growth expectation. The agency reported that of the 30 fastest-growing occupations, 18 were in health care and related occupations. And the fastest-growing sector among those occupations included home health aides and personal care aides
The job picture in New Mexico certainly has been dimmed by COVID-19. The New Mexico Department of Workforce Solutions’ labor market report for April showed that statewide unemployment reached 11.3%. The education and health service grouping was down 10,300 jobs in April compared with a year earlier. Statewide, 90,000 jobs overall had been lost compared with April 2019.
Rios had worked as a home health aide for three years, shortly after moving to Albuquerque from the Philadelphia area with her son, now 5 years old. She worked for Heart is Home Cooperative Care, a project of New Mexico Direct Caregivers Coalition, a non-medical worker-owned home care agency. Now, she isn’t sure when she will return to that job.
“I am very healthy now … But I have to wait until they have a client,” she said. “We’ve had a lot of clients put on hold because they weren’t sure about having an outside entity in their home.”
Still, she doesn’t think the pandemic will change the need for home health aides
“We will always be here,” Rios said. “There will always be people who need help, and there will always be people who are willing to help.”
Oklahoma: 'Families are scared'
Mario Medrano dates his connection to the Latino Community Development Agency (LCDA) in Oklahoma City to good memories from his youth. Medrano, operations director for the nonprofit, remembers joining his high school’s Latino Club, sponsored by the LCDA, and receiving a college scholarship presented at the organization’s awards banquet.
Now in his fourth year as a staff member at LCDA, which provides a range of support services, Medrano is troubled by what he’s seeing as the pandemic stretches into months: “Families are scared,” he said, noting that worried parents and seniors are fearing eviction. “They can’t pay their rent and afford medication.”
Medrano said he recalls only one call for help with rent in the four years before the pandemic. Now, such calls are frequent. With layoffs, families have run low on funds and are depleting their savings. So, they turn to the LCDA. “They come to us for everything,” Medrano said.
The LCDA offers 26 programs to, as its mission states, “enhance the quality of life in the Latino Community through education, leadership, services and advocacy.” Programs are supported through state and federal contracts, corporate donations, private donations and the organization’s own fundraising.
“We don’t turn anyone away,” said Raul Font, LCDA’s president and founding member.
Because of the pandemic, the number of LCDA clients could jump to 100,000 from about 50,000 in 2019, he said. While calls for services and assistance have increased, donations have plummeted. Some major fundraising events have been postponed or may be canceled.
“We’ve been told now is not the time to ask for a donation,” Font said.
On April 1, the LCDA sent about 90 employees home to work remotely. A handful of staff members remained in the building, and the nonprofit’s two child development centers stayed open to care for clients’ children. Using virtual communication tools, the LCDA continued to serve clients, as did other nonprofits in Oklahoma.
“They didn’t really close – they just did business differently,” said Dan Billingsley, vice president of external affairs for the Oklahoma Center for Nonprofits. “Human services organizations still provided full service.”
Font said the LCDA is surviving, but things are going to “explode in July” as clients try to pay delayed rent and utility bills, jobs are lost when smaller businesses can't reopen, and school-age children need to somehow continue their educations. Inevitably depression will set in, Font said: “We are going to need two or three more therapists and counselors.”
However, Font was optimistic as he reflected on the nonprofit’s 29-year history: “We survived the Oklahoma City bombing, market crashes, the closing of two major oil companies. This, too, will pass.”
Colorado: Facing adversity again
At the beginning of 2020, high construction and labor costs were commercial real estate executive Susan Powers’ only concerns about moving ahead on several affordable-housing developments and an office building in Denver.
“There was certainly a question about how long this growth trend could continue and whether we were overbuilding multifamily developments, but the job growth continued since companies were still finding Denver to be a less-expensive place to do business,” Powers said of earlier this year. “While the economists’ projections were somewhat a bit more restrained than they had been in previous years, the development community remained optimistic.”
Clearly, COVID-19 has changed the challenges for Powers, president of Urban Ventures, a Denver-based development and consulting company she started 22 years ago. “First and most importantly, is the struggle some of our tenants are having to stay in business,” Powers said.
Some businesses were partly open. Some tenants closed their businesses temporarily, while others have shut down permanently. As for new developments, Powers put the office building project on hold but was moving ahead with at least one affordable-housing project.
“These types of challenges with tenants and new development projects are very typical of what my fellow developer friends are experiencing,” Powers said. “In many ways I feel fortunate that I am involved in the downtown Denver market because I believe it will recover before other parts of the metro Denver areas due to its strength before COVID.”
Powers faced adversity before, when the oil and gas bust of the late 1980s devastated Denver, and especially downtown.
“While that wasn’t a national or global recession like we are experiencing today, for Denver it was quite an economic shock, and I am often reminded of those days as I live through COVID,” Powers said. “The only development that we were involved with for almost 10 years was affordable housing. While none of the circumstances are the same today, the deep impact on the economy with high unemployment rates feels the same, and the likely extended time for recovery will be similar.”
Powers said she doesn’t expect new office projects to resume for a year or so. New hotel construction will likely stall, and some existing hotels could be converted to residential use, she added.
“I believe that the success of our tenants determines my success, so taking the long view on what is needed to give them the room to regain their strength in these difficult times is necessary,” Powers said.
Nebraska: The meaning of 'home'
Working remotely can help alleviate concerns about the spread of COVID-19 and allow employees to do their jobs while staying safe. But how do you “work from home” when you have no home?
That was the dilemma facing Ethan Hollinger-Phelps in early April when he learned that his employer, North End Teleservices in Omaha, was transitioning about 200 workers to their homes because of the pandemic. Hollinger-Phelps, 19, was homeless, living in a nearby shelter and sharing space with three roommates.
At the time, he was one of about 2,300 individuals in Nebraska lacking a permanent residence, according to the U.S. Interagency Council on Homelessness.
“I was worried,” Hollinger-Phelps said about learning of the coronavirus and the company’s shift to a work-from-home posture. He had only been on the job since February.
Hollinger-Phelps is a customer service representative for North End’s contact center, serving clients from retail, government, hospitality, financial, insurance and other industries. It’s a job he enjoys: “I like talking to people.”
And it’s a job that makes it possible for him to have meals every day. Before he had a regular paycheck, there were days when “I would not eat at all,” he recalled. At other times, he would order large quantities of the cheapest item on a fast-food menu and eat one large meal that day.
Making the 14-minute walk to work five days a week at North End, Hollinger-Phelps began to experience some financial stability after being, as he described, “impoverished most of my life.”
Then the pandemic hit. Understanding his predicament, North End and the homeless shelter collaborated. A private area in the shelter was created for Hollinger-Phelps to take calls, and he received all of the equipment needed to do so.
When the decision was made to have employees work remotely, “we worked to replicate the onsite environment in homes,” said Ashley Rae Turner, marketing and communications specialist for North End. Like Hollinger-Phelps, some of those employees were in nontraditional living environments, Turner said.
Hollinger-Phelps’ role at North End is to answer calls for a federal education loan service. Many of those calls have been about COVID-19 and its effect on a caller’s ability to make loan payments. Economic hardship is something to which he can relate.
“I understand the stresses of financial problems, especially with debts and loans,” he said. “Helping a caller set up a payment plan so they can still put food on their table and provide for their family is the most important part of my job.”
Having that job provided more than regular meals. It provide hope – and eventually a home. “I was able to save enough to move out of the shelter,” Hollinger-Phelps said. He moved into an apartment at the end of May. It’s a 25-minute walk to work, but he doesn't mind. “Thanks to North End, I have a home and I can buy food whenever I want to,” he said.
Wyoming: ‘Watchful’ for a rebound
Dave True’s outlook for his Casper, Wyoming, company coming out of the pandemic is based on a long history of challenges and successes in the oil industry. And, right now, his viewpoint isn’t all grim.
“Although these are obviously most challenging times, we do believe that there will be opportunities developing, and the True companies will be stronger as we emerge from this dramatic decline,” said True, a partner in True Drilling Co. and related businesses. “It is a time during which we can refocus on the basic fundamentals of good business and be watchful of opportunities as they develop.”
True Drilling began in 1948 when Dave True’s father became a small-interest owner in a two-rig drilling contracting firm in Casper. The elder True and his wife eventually became sole owners and added oil and gas exploration and production. The company now has other oilfield-related operations.
“That exposure to both the upstream and midstream segments has provided a reasonable solid foundation throughout the decades,” Dave True said. And there have been challenges to face, with significant industry downturns in the 1980s and 1990s, as well as slumps that started in 2008 and 2014.
“The oil and gas industry has a history of notable ups and downs, but this has to be one of the most substantial cliff events,” he said. “There have been others of note, but the one a person is going through at the time always feels like the most significant. There will be a thinning within the industry, with the less-secure companies going out of business or being absorbed by the stronger.”
True says 2020 began with overall optimism. “Although there were certainly some aspects that we wished were more active, most operations had reasonable activity levels and sales projections,” he said. “Matter of fact, we were launching our largest pipeline expansion project in our history.”
True said the Wyoming economy seemed bright with significant reserves helping to manage a downturn in coal. But the depth and velocity of downturns caused by COVID-19 are unprecedented in Wyoming and worldwide, True said. Most of the True companies’ office personnel are working from home, field work schedules have been modified, and a small number of employees was furloughed. The company’s major pipeline project has been put on hold.
Even so, looking ahead, being diversified could be a benefit.
“It is sometimes a quandary whether having a basket of diversified operations serves us well in that it is extremely rare that all will be performing extremely well at any particular time,” True said. “However, in the long run, it is my strong belief that our diversification has built a strong foundation.”
Kansas: Navigating the clouds
Pilots were grounded. Airplanes were parked. And sales of parts and fuel plunged at Yingling Aviation in Wichita.
Yingling serves companies and individuals who fly planes for business travel and recreation.
“By mid-March, the pandemic was impacting both domestic and international business on the parts side, including fuel sales,” said Lynn Nichols, the company’s chief executive officer and chairman.
For example, parts sales in April 2019 were $1.1 million but dropped to $606,605 in April 2020. Fuel sales in April 2019 were $650,322 and plummeted to $176,172 in April of this year.
The business aviation industry saw flights decline as the number of COVID-19 cases and stay-at-home orders rose. How bad has it been?
“Worse than the Great Recession years of 2008 and 2009,” said Travis Kuhn, vice president of market intelligence for Argus International, an aviation services company in Denver. When states started locking down and international travel restrictions were put into place because of the pandemic, business flights in North America dropped to 182,000 in March compared with 266,000 flights in March 2019, Kuhn said.
At Yingling, although fewer airplanes were in the air, it was good news that some were on the ground.
“On the maintenance, repair and overhaul side of our business, we had a nice backlog of business prior to the pandemic,” Nichols said. Customers continued to bring their aircraft in for work and improvements. Because Yingling was considered an essential business, the company didn’t close, and most of the roughly 100 employees continued to work on site. Sanitation for high-traffic areas was increased to three times a day, meetings were conducted by Zoom, face masks were provided, and large clear plastic barriers were installed for front-line workers.
Before Nichols bought the company in 2000, he stored his own airplane at Yingling when he was flying for an office technology business he owned. Ask him how the future looks, and he responds like a pilot.
“There are some clouds we have to navigate around,” he said. “We can’t see through them.”
Despite that, Nichols is optimistic about the future of business travel. For one thing, with pandemic precautions prevalent, corporate jets allow for social distancing, and they provide a safe and sanitary environment for employees. At Yingling, these days the phone is ringing more in the parts department. Customers are wanting quotes, an indicator that orders will follow.
“Business is starting to come back in a very measured way,” he said.
Missouri: ‘Things drastically changed’
For Shardae Sears, the first pandemic jolt came in March. That’s when she took an extended vacation from her event-planning business and her secondary line of work as a hair stylist in Kansas City.
“While I was out of town, things drastically changed,” Shears said. “When I returned home, cities were completely shutting down (because of the pandemic). Both of my jobs were pretty much shut down.”
State and local restrictions on social gatherings meant that salons and barbershops had to abruptly close. Of even deeper financial impact to Shears and her business, Vivid Events KC, the restrictions also meant the cancellation of corporate and private bookings at the building she leases in downtown Grandview, Missouri. Before the pandemic, Shears said, she could count on two to five events per weekend.
“When you can’t have gatherings over 10 people, no one wants to rent a space for that,” Shears said, referring to crowd-size limitations in early phases of restrictions.
With both of her income streams shut off, and sons ages 12 and 9 at home, Shears said she applied for assistance through a cosmetology industry program, but was turned down. Her application for federal pandemic assistance for the events business and a personal claim for state unemployment benefits remained in limbo, she said.
Although those outcomes left her discouraged, Shears said she was grateful that during the shutdown she worked out favorable lease arrangements for the events center, and the salon where she normally works a few days week didn’t charge her the usual workspace rental fee.
At the end of May, after social-gathering restrictions eased, Shears hosted her first event since March – a small workshop meeting for a nonprofit organization. By the beginning of June, she had started to hear from people interested in booking family celebrations – within pandemic guidelines. She also resumed booking hair clients after salons and barbershops were allowed to reopen.
But even as the local economy reopens, Shears’ experiences through the first months of the pandemic have broadened her business viewpoint to possibly include ventures that would be less vulnerable if conditions got worse.
“Being a small, minority-owned business, this has definitely opened my eyes to see that a service-based business is not going to make ends meet if we go through another shutdown,” Shears said.
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