What will the post-Covid economy be like? Part 2: Adams County

The corona virus crisis could have a devastating impact on Gettysburg. While some estimates of the state of the pre-crisis local economy are more optimistic, many of the businesses directly serving park visitors were in weak shape going into the crisis after three straight bad years.[1] It now seems likely that much or all of the 2020 tourist season will be a dead loss. Many local businesses and restaurants probably will not survive. And many who do will probably be in weak financial shape.

The population may be severely impacted by the crisis. Before the crisis, unemployment in Adams County was relatively low (3.9% in January 2020)[2], but even then it was a weak economy where 65% of the workforce must leave the county and many in the local workforce are limited to minimum wage seasonal work.

In the first week of major layoffs, Pennsylvania led the nation in the number of new unemployment claims filed, with a total of 378,908, 25 times the week before.[3] After a second week, new unemployment claims in Pennsylvania soared to 835,000.[4]

While Adams County figures weren’t available, it’s likely that layoffs were high locally. Added to this impact is new hires foregone. Now is the beginning of the summer season, when shops, restaurants and other employers begin to staff up for the tourist season. Those several thousand new jobs also do not exist.

The local post-emergency economic condition will be influenced by the availability during the crisis of CARES funding for small businesses, the number of businesses who opt to use this funding to continue paying their workers, and whether evictions and foreclosures are suspended during the crisis.

Poverty is already fairly high in Adams County and is likely to grow worse. Many people who were employed at the beginning of the crisis will be unemployed and in debt whenever the crisis ends. And even many with jobs may have run up significant debt during the emergency.

Unknown and hard to assess are the mental health consequences of the effects of prolonged lockups, increases in economic insecurity, and fear of the disease. Cases of PTSD are likely to increase significantly and could hamper the response 

There could also be severe consequences in the housing market. Many people could lose their houses through eviction or foreclosure and homelessness is likely to increase. New construction, home values, and sales could also be affected. Will construction at, for example, Amblebrook continue?

The impact on the local health system is uncertain but could be serious. While the pandemic hasn’t yet seriously affected Adams County as of April 4th, it could affect the healthcare workforce and could exceed the limited capacity of our emergency rooms.

Demand has already increased at the Food Pantry, with many new users, before the worst of the layoffs take effect. If the shutdown continues and more people are unemployed, demand for social services could skyrocket. This could put a significant strain on groups such as SCCAP and United Way, which are likely to see simultaneous increases in demand and reductions in donations. While there is certainly an increased feeling of generosity and solidarity, it is also true that people who are laid off or concerned about the stability of their job or retirement income are likely to cut back on donations.

Whenever the crisis is declared “over,” it is by no means certain that the recovery will be quick. How many restaurants, motels, and t shirt shops will close? Will the tourists return as soon as the “all clear” is sounded? The school field trip business, a major boost to the economy between March and May, is already a dead loss this season. Family vacation season plans are being made right now and the salvage of a healthy partial season depends on an early end to the crisis and a recovery of families’ intention to travel.

Conferences and weddings are planned well in advance, so the pipeline of events in mid-to-late summer probably still exists. But the time it will take for this business to revive is uncertain. When will businesses be willing to send their employees off to conferences? Considering the air travel and group meetings, it could be a while.

The state budget is likely to be hit particularly hard. With reduced tax collection and increased spending on covid-19 and unemployment insurance, other state expenditures may face severe reductions. Besides tax receipts, other important sources of state revenue (casinos, state liquor stores, etc.) are also closed and generating no revenue. One specialist in state tax policies stated that “It’s unlikely that any state is fully prepared for what they are about to face, but Pennsylvania finds itself particularly ill-prepared.”[5] Municipal finance will also be affected by these problems. County and local governments will suffer the double whammy of reduced resources and increased demand.

After the crisis has passed, demand for social services is likely to remain high and may stretch the resources of community organizations. They will need to re-generate their volunteer bases, which were largely shut down during the crisis.

[1] Because of growth of non-Civil War business such as conferences and weddings, overall tourism numbers (hotels and restaurants) have held steady while park visitation numbers decreased.

[2] https://tradingeconomics.com/united-states/unemployment-rate-in-adams-county-pa-percent-m-nsa-fed-data.html (Accessed April 1, 2020)

[3] David Shribman, “Pennsylvania Hit By More Jobless Claims Than Any Other State,” Los Angeles Times, March 28, 2020.

[4] Peter Hall, “Pennsylvania Unemployment Claims Soar to 835,000 and Strain Resources,” Morning Call, March 30, 2020.

[5] Charlotte Keith, “Pennsylvania ‘particularly ill prepared for financial blow caused by COVID-19,” Pittsburgh Post Gazette, April 2, 2020.