‘We are dealing with a global shift in the nature of the economy': Seattle Mayor on COVID-19

Seattle Mayor Jenny Durkan joins Yahoo Finance’s Seana Smith and Akiko Fujita to discuss the impact of the coronavirus in Washington state.

Video Transcript

SEANA SMITH: Welcome back to "Yahoo Finance." The number of cases, Coronavirus cases in the US continues to climb right here in this country, surpassing 160,000. Seattle has been on the front lines of the Coronavirus outbreak. It was the location of the first known Coronavirus case here in the US, and where the virus claimed 37 of its first 50 victims in the United States.

So here to talk more about that, I want to bring in Seattle Mayor Jenny Durkan. And we're also joined by Yahoo Finance's Akiko Fujita. Mayor Durkan, thank you so much for taking the time to talk to us this afternoon. I first want to start with what the current situation is like in Seattle, because I was just reading a recent report this morning from health officials in your area, and it was showing that the signs of the containment efforts that are underway in your city, that it's starting to pay off. You're starting to see some real results there.

MAYOR JENNY DURKAN: We are. We're fortunate in Seattle, because we are a city that has a number of high tech companies and resources that many cities didn't have access to. When we first had the first cases in our county on February 28 be announced, and then the first death on February 29, we were able to act within days to work with our largest employers and the city of Seattle and King County, to have people telecommute as quickly as possible. Then we dialed, we went up the dial to do more restrictions on our economy.

I will say, I agree completely with your last speaker, that the economic impacts of this cannot be overstated. We went from being probably one of the most booming and productive economies in America, with cranes everywhere building new buildings and high unemployment, to an economy that is virtually shut down now. But we did that knowing, we took the restrictions we did knowing that we would have those impacts, so that we could both flatten the curve to support our health care workers, but hopefully reduce the long-term economic harm, so we could come out of this in a way that was more resilient.

We have a glimmer of hope. We were able to cut the transmission rate from 2.7 to 1.4, which means every time someone gets it, they give it to almost three people is where we were on the curve. We've now lowered that. But what we've seen with this virus worldwide is, those kinds of restrictions have to continue for a period of months in order to come out and start doing the types of things to reignite our economy. I would say that we're doing some assessment now. What are those parts of the economy we can fire up first, without risking a resurgence of the virus.

AKIKO FUJITA: Mayor, you talk about the economic impact here. Unemployment claims last week skyrocketing nationally. I saw that it was a nine-fold increase in Seattle. And there seems to be a debate here between the federal and local level in terms of how much stimulus is needed. We've got a $2 trillion stimulus on the table over in Washington, but everything we've heard from local officials is, that's just not going to be enough. How much more help do you need from the federal level?

MAYOR JENNY DURKAN: I think there's going to have to be phases of stimulus, and we need more right now. We've got to get money into the pockets and bank accounts of workers and small businesses, so they can both weather the storm, and continue to keep some parts of the economy alive. In Seattle, online sales and takeout restaurants are still open.

But it doesn't do you any good, if there is no money in the pockets of workers. And it was our service industry and our small businesses that got hit first. There are over 200,000 people employed by that in the city of Seattle. So the first round of federal stimulus will just be to keep the basic parts of the economy going. Then I think there has to be a very concerted plan coming out of this that is both what are those types of industries that don't require a lot of people gathering immediately that you can get up.

And what are those industries that can have the right social distancing. I think we're going to need and finally get an infrastructure plan that will work for America and put people back to work coming out of this. In addition, we've got to make sure that we keep those online parts stable and robust. But we've got to get brick and mortar going again. So I think there's going to be phases to this and no phase is possible without concerted action from the federal government at the national level.

SEANA SMITH: So, Mayor Durkan, I want to up on that point that you just made about the infrastructure plan, because we a President Trump tweeting about that as his phase four. It sounds like that you think it's a good idea to incorporate some of that into the phase four response to the Coronavirus, because you think it will help the economy kind of get restarted here. Is that correct?

MAYOR JENNY DURKAN: That's right. But I think for a period of time, you've got to, the cities are going to come out of this at different points. We're very hopeful in Seattle that measures we've taken will continue to pay off. But we're a month or two away also from being able to relax those. And so infrastructure projects are only possible if you can have the conditions to get workers to and from a job site and keep them safe at the job site. We're doing that in a number of places here in Washington state. But it's got to be very carefully calibrated. So the federal government has got to have plans in place to surge this economy in different places, and not just sequentially, but parallel at times.

AKIKO FUJITA: Mayor, you talked about the booming economy that was in place in Seattle before. You certainly have a lot of major companies that are concentrated there. Amazon, of course, Starbucks, Microsoft, Boeing just outside of Seattle. What we've heard repeatedly from lawmakers, is that they want people to keep, or these businesses, to keep people on the payroll, so that when this dies down, when the curve is flattened, things can start up right away. I'm curious what conversations you have had directly with some of these companies about where they stand financially, and what their contingency plans are, when things start to open up.

MAYOR JENNY DURKAN: I've had a number of conversations with a number of the companies here. And I would say that all of them are trying very hard to keep their employees employed. But depending on the nature of the company and the amount of income they're able to have over a period of time, that's getting hamstrung. And we've seen it first, obviously, in brick and mortar. We saw what happened to Macy's this week.

And so when you have large retailers, as we have centered here, like Nordstrom, you worry about their vitality over the short and long haul. Other companies can shift their work, like Amazon, mostly to online. But we're also home to Expedia, which is a great company. But tourism and aviation has been devastated. So each of these companies is a small microcosm of what's going on in the different sectors in the market. And that's why we have to be very smart about how we are going to rebuild and restart this economy in every city. But also, sector by sector across the country.

AKIKO FUJITA: And Mayor, finally, if I can ask about a specific company in your area, which is Boeing. A bit of a political question here, but there is certainly a lot of questions around the stimulus bill and how much goes to specific companies. Boeing certainly employs a lot of people in Seattle, but they've also struggled well before the Coronavirus, partly because of their own doing. I'm curious how you view that debate as somebody who understands how much his company employs, but also is aware of the political ramifications of providing stimulus to a company like that.

MAYOR JENNY DURKAN: So I think you have to look over the short and the long term. I think it is in the long-term interest of our country to have a very robust and vital Boeing. We need it not just for national security and military purposes, but we need it for commercial purposes. It's one of the largest exporters from America. And it also employs one of the largest and most experienced manufacturing workforces there are. The machinists are unrivaled in their ability to do what they do. And so you don't want to lose that capacity in your marketplace.

As we transfer and transition in America from the innovation technology economy, we still have to have blue collar jobs available as well. And so having companies like Boeing is not just, where are they as a company, but it is really, what are we going to do to keep that sector and those kinds of jobs in America as we move forward. Because we're not only dealing with a pandemic, and its huge impact, we are dealing with a global shift in the nature of the economy, unlike anything seen since the Industrial Revolution.

Moving to those tech jobs, and how do we keep it strong manufacturing base, so that we have a diversified economy. So I think the questions are beyond political, and really are both economic, and where do we see ourselves in five, 10 and 20 years as a country and the types of jobs and the type of output we're going to need to be successful.

SEANA SMITH: Mayor Durkin, thanks so much for taking the time to talk to us today. And also, Akiko Fujita, to you as well. Thank you.

MAYOR JENNY DURKAN: Thank you so much. Take care.