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Economic shocks from coronavirus reaching deep into Massachusetts work world

Even industries long insulated from recessions, such as health care, are idling workers or cutting paychecks.

Logan Airport was nearly deserted on Thursday. Many workers at the airport and for the airlines have lost their jobs.
Logan Airport was nearly deserted on Thursday. Many workers at the airport and for the airlines have lost their jobs.Craig F. Walker/Globe Staff

Chris Crompton has many contacts in the tourism industries in Asia and Europe, so he had a sense of impending doom as the coronavirus spread into the United States and began to grip Boston just a few weeks ago.

“It was almost like a tidal wave of businesses closing down,” said Crompton, general manager of Old Town Trolley Tours of Boston.

By the second week of March, Old Town Trolley’s business was off by 50 percent; last week Crompton laid off 96 employees, or about 90 percent of his staff. The remaining employees have taken pay cuts, including Crompton.

“We’ve got people who worked for us for 20 to 35 years that I had to lay off,” said Crompton.

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Workers at hotels and restaurants were the first faces of the unemployment line created by a COVID-19-induced economic shutdown, but they were only the first. The staggering number of jobless claims — nearly 10 million nationwide over two weeks and more than 329,000 in Massachusetts — reflect just how deeply the financial devastation has reached into so many corners of the economy, from manufacturing to food distribution to health care providers, such as dentists and physical therapists.

And economists expect the damage will only spread as the virus puts an ever-broader swath of American life into a deep freeze.

“I would say pretty much every sector is at risk,” said Jay Zagorsky, a senior lecturer at Boston University’s Questrom School of Business. “Many white-collar professions are tied indirectly to COVID-19. … I don’t think we’ve seen the white-collar wave yet.”

It’s starting. Some health care and life science companies, such as Atrius Health and Boston Scientific, are already cutting pay or mandating furloughs. Other industries, including those long insulated from recessions, have cut even deeper.

The Massachusetts Dental Society, for instance, recommended its members close for all but emergency care, said president Janis Moriarty. It was a painful but practical decision that shuttered hundreds of Main Street businesses across the state.

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“It was not something we took lightly,” said Moriarty, who has furloughed the 18 employees at her own clinic in Winchester. “It’s tough financially, but we had to think beyond the business aspects of this.”

Dan Brownbridge, who co-owns Joint Ventures Physical Therapy, made a similar choice, closing his 10 outpatient clinics around Greater Boston. They could have stayed open, with physical therapy considered “essential” under Governor Charlie Baker’s stay-at-home advisories, but Brownbridge said he couldn’t risk getting staff, or patients, sick.

“I can’t say we’re essential enough for that,” he said. “I wouldn’t be able to live with myself.”

So Brownbridge and his business partner laid off 95 employees and turned off the lights on a company they’ve spent 15 years building. These days, they’re on the phone with bankers, landlords, business advisers, trying to figure out how best to navigate stimulus programs and keep their remaining costs in check. And he’s still in touch with all those laid-off employees, updating them on his progress several times a week.

“We’re trying to stay positive about it,” Brownbridge said. “Everybody right now is depressed and scared. I feel like, as a business owner, it’s my job to try and be a leader, to rally the troops.”

In some white-collar and professional services fields, layoffs haven’t really hit yet. There’s still a backlog of work left over from those busy days just a few weeks ago. That’s true in real estate where, despite the challenges that come with social distancing, sales are still closing and renters are still looking for apartments, at least virtually. But the longer this lasts, the more the troubles will ripple through that industry too, said Jason Gell, a Newton-based real estate agent and president of the Greater Boston Association of Realtors.

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“We can absorb what’s going on right now,” he said, noting that peak apartment-hunting season is only really beginning in Greater Boston. “But if this stretches into June, July, we’re going to have some real concerns.”

And that’s one of the biggest looming questions around this whole episode: How long will it last?

Some companies are betting on a short, albeit painful recession, followed by a recovery later this year. So they’re laying off workers with an eye to bringing them back.

At Merrimac Tool Co., a machine shop in Amesbury, founder Alan Porter let go all 16 employees last month in response to Baker’s order to shut nonessential businesses. But Porter remains bullish about the future and expects a solid rebound once the health crisis ends. If the quarantine ended today, Porter said, he could rehire his whole crew and resume production at full capacity.

“I think business will be great afterward,” he said, partly because some companies will turn their backs on shipping work to China.

But for some industries, the prognosis is far less clear. Airlines, for instance have been devastated amid travel restrictions and border closings. Traffic at Logan International Airport is down 76 percent compared to this time last year, and hundreds of people who clean airplane cabins and assist passengers have already been laid off, union officials say. Hundreds more — many of whom live paycheck to paycheck — have seen their hours, and pay, cut sharply.

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“Some of these people, they’re as good as laid off,” said Amanda Torres-Price, a spokeswoman for Service Employees International Union 32BJ District 615, which has been working to unionize airport staff. "These are the most vulnerable people.”

The federal government’s $2 trillion economic rescue package aims to cushion the blow for laid-off workers and small businesses caught in the undertow by increasing the amount of unemployment benefits and offering employers $349 billion in forgivable loans.

Peter Marks, president of Everett specialty food distributor Paul W. Marks Co., praised the government response and plans to apply for a loan. But when he looks at the financial hit his company is taking, he knows the aid won’t be enough.

The business is still delivering cheese, milk, and other perishables to restaurants and institutions such as hospitals, but revenue is down dramatically. So Marks has trimmed his staff to about 30, down from about 100. The company has a fleet of 30 trucks, but only eight are in use now.

“We’re going to need more money," said Marks.

And for laid-off workers, it’s a waiting game. The shutdown, while necessary to stop the virus, hurts. “It’s horribly unfortunate," said Bob Regan, 59, a conductor for Old Town Trolley Tours. "This too shall pass, unfortunately at a great cost.”

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Hiawatha Bray and Katie Johnston of the Globe staff contributed to this report.


Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com. Tim Logan can be reached at timothy.logan@globe.com. Follow him on Twitter at @bytimlogan.