Unaffordable Utah: Coronavirus Financial Survival

SALT LAKE CITY — Many Utahns have faced sudden and serve hardships due to the coronavirus pandemic, but individuals and families can take steps now to manage their finances.

On a typical Monday, pediatric dentist Troy Hardy would have a waiting room full of noisy patients.

“It’s awfully quiet,” he said while standing in an empty office. “Normally it’s really loud in here, and kids are yelling and screaming.”

To combat the coronavirus, Hardy followed the advice of the American Dental Association to temporarily close—although he’s still seeing patients for emergencies.

“I’m definitely preparing for the worst case scenario,” he said. “There are some states in the country where they’ve asked dentists not to do any elective procedures for up to two months.”

He never imagined a scenario in which both his offices in South Jordan and Lehi would be shuttered for weeks. He said he’s been losing sleep, worrying about the livelihood of his staff.

“It’s been really hard on me,” Hardy said. “If the business isn’t making money, it’s pretty hard to pay your employees.”

It’s a similar scene at Dexterity Salon in Salt Lake City where the doors have been closed in order to obey health guidelines to practice social distancing.

“It’s been difficult,” said salon manager Samantha Edam. “We’re just trying to get through it together.”

Edam and about a dozen other employees had to apply for unemployment benefits.

“All of our stylists are paid based on commission, and without someone in their chair, we have no form of income,” Edam said.

Sudden Economic Impact

Economist Joseph Mayans said the coronavirus pandemic is delivering an unprecedented shock to Wall Street and America’s main streets.

“We’ve gone from a health crisis to now an economic crisis,” Mayans said. “At this point it’s about survival.”

He said to imagine the economy like a car driving down the highway.

“We just hit a brick wall—complete stop,” he said.

The collective goal, he said, should be to help companies, especially small businesses, hold on to their workers.

“If you just let these businesses go under — if they can’t make payroll, if people don’t have a paycheck — the cost of repairing the economy down the line is going to be much greater than it is now,” said Mayans.

Unlike during the Great Recession, the economic devastation from the virus was felt almost overnight. But Mayans said the government is responding faster than it did a decade ago.

“They’re trying to extend that window to get us on the other side of the crisis to where the economy can start moving again,” he said.

Unemployment Claims Skyrocket

To weather the storm, first assess if you’re eligible for unemployment benefits—which is what nearly 20,000 Utahns did last week.

“Our phone lines are tied up, they’re extremely busy,” said Nate McDonald, assistant deputy at the Utah Department of Workforce Services.

Those who have lost their jobs completely or have had their income reduced could qualify for benefits.

“There are a number of employers who are doing what they call furloughing, where they are just temporarily reducing hours, or reducing your time, or putting a pause on your work right now,” said McDonald.

For the week ending March 21, Utah received 19,591 new claims for unemployment. For comparison, during the same week last year, Utah only had 885 claims filed. That’s a year-over-year increase of 2,114 percent.

“This is historic,” said Kevin Burt, the director of Utah’s Unemployment Insurance Division. “We’ve never seen claims at this volume.”

Wait it out or switch jobs?

The hardest hit sector has been food preparation and serving. The good news is that many of those filing for unemployment from that industry are still considered “job attached.”

“Once everything settles, they are able to return to their employer, and that employer is able to retain those talented employees,” he said.

Unemployment benefits will only pay about 50% of the income a worker had while employed. The maximum benefit amount in Utah is $580 per week. However, the expected federal stimulus package could increase that weekly amount by $600.

“Unemployment is not a full replacement of lost wages,” Burt said.

It will take two to three weeks for unemployment applications to be processed, and for benefit payments to reach bank accounts.

In the meantime, the unemployment office advised workers to look for jobs in industries that are hiring during the coronavirus pandemic, including pharmacies, warehouses, shipping and delivery services, and grocery stores.

Also, when it comes to applying for unemployment, officials said to make sure your version of events can be verified by your employer. The Unemployment Insurance Division will check and give the company the chance to dispute the claim.

Seek Payment Relief

Credit counselors said the next step to survive the economic uncertainty should be to negotiate with creditors for payment relief.

“I’ve seen some people who’ve never missed a payment contact us,” said Ellen Billie, programs director at Fair Credit Foundation. “We are definitely getting a sense of fear from clients that they can’t make their bills.”

So far, Billie said she’s seen creditors willing to help, but struggling consumers needed to be proactive and ask for help.

“Before you do anything, I would encourage clients to contact their creditors,” Billie said. “It may be their mortgage company it may be their credit card companies—don’t ignore it.”

If you are afraid or too emotional to contact your creditors on your own, she suggested finding an advocate or friend to jump on the call with you.

“It can be scary,” she said, “letting them know, ‘I can’t pay.'”

Lenders are already offering to refund late fees, suspend negative credit reporting and defer payments for credit cards, auto loans and mortgages. In many cases, the bank may require information about the financial hardship.

Next, make sure you prioritize important bills with the money you do have, focusing the funds towards housing needs, utilities, medicine, food and transportation.

After that, take time to apply to assistance programs. If you’ve lost income, you could now be eligible for Medicaid, food stamps and other assistance.

And don’t forget about student loan payments. Pausing those monthly payments could free up money to use elsewhere.

Economist Joseph Mayans said the same advice applies to small business owners.

“Call up all the people that you owe money to,” he said. “Call up your bank, your credit card and talk about ways that they may work with you on modifying those payments.”

Business owners should look into disaster loans to help cover payroll and other expenses.

Holding Out Hope

At Dexterity Salon, they said they’re still bringing in some revenue by making color kits so that clients can touch-up their roots at home.

“Right here, I have some deliveries that I am taking to doorsteps today,” Edam said. “Whatever we can do to help, we’re going to do it.”

For Dr. Hardy, take-out dentistry isn’t an option, so he has been calling his creditors.

“Everyone that I’ve talked to, at least, has been really helpful,” he said.

He said he’s hoping to get some leeway so that he can focus remaining funds on his staff.

“Taking care of our employees and trying to make sure that they have what they need,” he said.