‘We need help’: Small cities face fiscal calamity from virus

Alexis Johnson figures she wasn’t the loser when the Pittsburgh Post-Gazette said she couldn’t cover protests triggered by George Floyd’s death. Her readers were — denied the perspective of a black woman with family roots in law enforcement working in her hometown.
Nobody anticipated it would lead to a staff revolt and become a national story, part of an extraordinary week where the news media’s sluggishness in building diverse newsrooms became part of the national conversation.
Editors lost jobs at The New York TimesPhiladelphia InquirerBon Appetit magazine, and the Refinery29 website. While each case had many factors, diversity is the common bond.
“Our communities are changing and our demographics are changing and we as a news industry have done a poor job of recognizing it,” said Katrice Hardy, Indianapolis Star executive editor and head of the diversity committee for the News Leaders Association.
That’s not a new complaint. The Kerner Commission that looked into causes of 1967 riots in American cities described the absence of black journalists in newsrooms then as “shockingly backward.”
When a precursor to the News Leaders Association began measuring employment diversity at newspapers in the mid-1970s, it set goals to reach by 2000. That year passed without the goals being met, so the time frame was extended to 2025, said Richard Prince, who blogs about minority issues in the industry.
“They’re not going to make that, either,” said the former newspaper editor.
The association even has trouble getting its annual diversity survey filled out. Only 293 newsrooms out of 1,700 queried last year responded. Four news organizations reported having a higher percentage of minority journalists than the community they cover.
In electronic media, 12 percent of broadcast journalists are black, similar to the national population figure of 13 percent. But only 5.5 percent of news directors — the bosses — are black. Minority representation is growing more slowly than in the country as a whole, according to Hofstra University research.
“Whenever I’m in a gathering of the leaders of media I’m struck by the lack of diversity,” Dean Baquet, the first black executive editor of The New York Times, told Prince in 2015. “It is stunning, given that we’re supposed to capture the culture, and how tough we can be on the rest of society.”
Baquet declined an interview request.
Pockets of success include the Times, where 43 percent of journalists hired in 2018 were people of color. Gannett, the newspaper chain for which Hardy works, has done well because meeting diversity goals is part of a manager’s evaluation, Prince said.
Just over one in five journalists on the U.S. staff of The Associated Press are people of color, the news organization said.
“It’s plain and simple,” said Cheryl W. Thompson, NPR reporter and president of the nonprofit Investigative Reporters and Editors. “You have to make the effort. You have to just do it. It’s not complicated.”
At the Inquirer last week, black reporters led a sickout following the use of an insensitive headline, “Buildings Matter, Too,” on a story about architecture damaged when protests turned violent.
“Blunders like this undo years of work trying to get sources and readers to trust and read the paper,” Inquirer columnist Jenice Armstrong wrote.
Hardy suspects that such suspicion of mainstream media was behind people at a recent protest in Indianapolis saying a Star reporter wasn’t welcome. She’s urged reporters covering the protests to build bridges as well as report news — to come back with names and contacts for future stories.
In Pittsburgh, Johnson ran afoul of rules that discourage journalists from being publicly opinionated on social media posts and elsewhere. Many newsrooms have strict social media policies to ensure sources feel they will be treated fairly.
She had tweeted a pointed joke, showing pictures of a garbage-strewn parking lot and writing, “Horrifying scenes and aftermath from selfish LOOTERS who don’t care about this city! ... oh wait, sorry, no. These are pictures from a Kenny Chesney concert tailgate.”
She was told she could not cover the protests, and so were colleagues who retweeted her in solidarity. The paper’s executive editor, Keith C. Burris, wrote in a column Wednesday that Johnson had crossed a line separating reporting and commentary.
Johnson doesn’t believe the tweet inhibits her from covering the story fairly, or that readers would perceive her as biased.
“It’s absolutely ridiculous,” she said. “It’s kind of insulting to my experience and my professionalism as a journalist. It’s not only insulting to me, but to black journalists around the country.”
A failure to include journalists of many different backgrounds means missing stories. Hardy, who just left a job in Greenville, S.C., said that without black journalists there, stories about gentrified neighborhoods would have gone untold.
The sweep of national protests following the death of George Floyd has news leaders talking to their staffs about how the story affects them.
A frank memo sent by Los Angeles Times executive editor Norman Pearlstine on Friday came after staff members pointed out instances of racial inequities. Pearlstine admitted that the newspaper had a long history feeding the city’s racism as it grew. He said the paper did not have enough minority writers and managers and outlined steps to correct that.
“Our coverage didn’t simply ignore people of color, it actively dehumanized them,” Pearlstine wrote. “More recently, we can be faulted for focusing on a white subscription base even as the city became majority non-white.”
Several issues led to The New York Times’ ouster of editorial page editor James Bennet over a flawed opinion piece by U.S. Sen. Tom Cotton. An internal outcry over the essay wasn’t apparent until a number of black journalists tweeted that Cotton’s argument in favor of using federal troops to quell violence made them feel unsafe, and others throughout the newsroom supported them.
The Bon Appetit editor, Adam Rapoport, resigned after a picture of him in a racially insensitive Halloween costume emerged. On Wednesday, the magazine promised major changes, stating “our mastheads have been far too white for far too long.” Complaints about racism alleged by former staff members led to Refinery29 editor Christene Barberich’s reassignment.
The impulse to take concerns about their news organizations public is one reason to believe that this time, concerns about diversity won’t be forgotten anytime soon.
“Before, it stayed in-house,” Thompson said. “Now it’s out there. And there’s power in social media.”
Johnson, uncomfortable and a little unnerved at the attention that her case has received, said she hopes that speaking out pressure her bosses to change their mind.
At age 27, she doesn’t want to be shut out of covering the biggest civil rights story of her generation.
Instead, she became part of it.
Unfilled potholes, uncollected trash, unmown grass, and, most significantly, fewer police on the street are some of what Allentown says it’s contemplating unless Washington helps it plug a multimillion-dollar budget hole left by the coronavirus pandemic.
Pennsylvania’s third-largest city, with a population of over 120,000, Allentown has largely fended for itself amid sharply falling tax revenue. It’s one of the thousands of smaller cities and counties across the U.S. that were cut off from direct aid in the $2 trillion coronavirus relief package passed by Congress in late March. Local officials in those left-out places are now pleading for a massive cash infusion from the federal government to help them stave off financial calamity.
“We represent the average city. If cities like Allentown begin to crumble, that’s how America crumbles,” said City Council member Ce-Ce Gerlach. “So something needs to be done. We need help.”
The federal CARES Act sent $150 billion to states and the nation’s most populous cities and counties to help them pay for expenses related to the virus outbreak. But only 36 cities met the population threshold of 500,000 or more to qualify for the money. With the next round of aid stalled in Congress — and no guarantee of a federal bailout anytime soon — Allentown and other local governments are facing tough choices about what to cut and what to keep.
Already, cities are dipping into reserves, canceling road projects, postponing routine maintenance, cutting parks, and recreation programs, and furloughing staff. State and local governments have shed more than 1.5 million jobs since the beginning of March, the U.S. Labor Department reported last week. The National League of Cities says municipalities could be looking at $360 billion in red ink through 2022.
“I am hearing from our members all across the country that every day that goes by, the situation is increasingly dire,” said Irma Esparza Diggs, the group’s chief lobbyist.
That’s especially true in Pennsylvania, where cities and towns could see a 40% revenue shortfall — the most of any state, according to a League of Cities analysis.
Allentown predicts a budget deficit of over $10 million, a number officials say could go higher if the economy doesn’t rebound quickly. Like other local governments, Allentown has already been paring back. The city furloughed as many as 87 people out of a workforce of 783, and all city department chiefs were ordered to slice another 7% from their budgets, including for police, fire, and emergency medical services.
Tax hikes, for now, appear to be off the table. City leaders raised property taxes by 27% two years ago and say residents can’t bear another increase, especially in the middle of a pandemic and historic unemployment.
“It wasn’t fair,” Mayor Ray O’Connell said of the lack of federal support. “The cities are the backbone, the heart of the state and the nation, and to get nothing ... we’re scrambling.”
A $3 trillion relief bill passed in May by the U.S. House, where Democrats have the majority, including nearly $1 trillion for state and local governments. It has no chance of passing in the Republican-controlled U.S. Senate, where prospects for future aid to states and cities remain uncertain.
Allentown, a former industrial center about an hour north of Philadelphia, had been revitalizing its moribund downtown before the pandemic struck. State tax incentives contributed to development that included a new hockey arena, gleaming office buildings, and upscale apartments. Yet Allentown remains a poor city, with over a quarter of its residents living in poverty, more than twice the rate of surrounding Lehigh County and Pennsylvania as a whole.
The pandemic hit the city hard. About 2,300 people in Allentown have tested positive for the virus — an infection rate higher than Philadelphia’s — and 67 have died. The economy has suffered, too, with businesses deemed nonessential forced to close their doors for 2 1/2 months. Allentown’s main street was virtually devoid of pedestrians and auto traffic on a recent Friday afternoon, though some pandemic restrictions have since been lifted and retailers were allowed to reopen last Friday.
“One of the things that’s most disheartening right now is we had a lot of really good momentum going,” said Santo Napoli, owner of assembly88, a men’s clothing store downtown. “You have all this great momentum and then, March, the sky falls with corona.
“This is not a downtown Allentown problem,” Napoli added. “This is a Main Street everywhere problem.”
Other virus impacts have been less visible than an empty downtown, but no less troubling.
The city was forced to cancel a popular summer playground program that many parents lean on while they’re at work. A major homeless shelter lost nearly all its volunteer workforce because of virus restrictions.
At Promise Neighborhoods of the Lehigh Valley, an Allentown community group, executive director Hasshan Batts and his colleagues began buying up all the diapers they could find — 60,000 and counting — and have been going door to door to distribute them to families in need.
“The city’s been limited in the role that they can play because they didn’t get the support and resources from the federal government,” Batts said. “Our city was set up for failure by the lack of federal support.”
Meanwhile, some of the region’s cultural institutions shuttered for months and heavily reliant on ticket sales to stay afloat, are at risk of going under, according to the Cultural Coalition of Allentown, an umbrella group.
The Alternative Gallery, a nonprofit arts organization located in an old cigar factory, is holding an online fundraiser “just to keep our doors open through September,” said Brandon Wunder, the founder, and gallery director.
He criticized the federal response as inadequate to the task.
The pandemic “got politicized, which never should’ve happened. And because of that, it’s been a battle when we should’ve been working together,” he said.
Some states are sharing the money they received from the earlier congressional relief package with local governments. Pennsylvania plans to distribute $625 million to counties that did not get direct aid from the federal government, including $33 million for Lehigh County, of which Allentown is the seat. A committee will decide how the money will be distributed, but it’s too soon to say whether Allentown will get a cut or how much. In any case, there will be a lot of competition for the money.
“When everybody holds their hand out, not everybody is going to get the amount of M&Ms they were hoping for,” said Lehigh County Executive Phil Armstrong, the county’s top elected official. “When you look at the needs, it’s probably going to be short.”
Republicans in the U.S. Senate have said they want to see how the money they previously approved is being spent so they can get a better idea of the needs before negotiating another massive aid bill. The Allentown region, for instance, has received nearly $90 million in federal funding for hospitals, public transit, the airport, and the Allentown School District.
Republican Sen. Pat Toomey, who helped start an Allentown-area restaurant chain before his 1998 election to Congress, “believes we should take a pause on the massive spending bills and switch gears to helping states safely reopen their economies,” said a statement from his office. “Government spending can never be a substitute for a functioning economy.”
Gerlach, the Allentown City Council member, said it’s already clear to him that the federal government needs to do more.
“We’re on fire right now, literally,” said Gerlach, noting the violence that ravaged other cities following George Floyd’s death in Minnesota. “So the last thing we need is for midsize cities, the majority of the country, to not be able to sustain themselves and provide for the people.”
Layoffs in the United States are abating, but millions who lost their jobs because of COVID-19 continue to draw unemployment benefits, suggesting the labor market could take years to heal from the pandemic even as businesses resume hiring workers.
FILE PHOTO: Construction workers assemble a scaffold at a job site, as phase one of reopening after lockdown begins, during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., June 8, 2020. REUTERS/Brendan McDermid
The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy’s health, will follow news last Friday of a surprise 2.5 million increase in nonfarm payrolls in May. It could reinforce the views that the labor market has weathered the worst of the turbulence.
The Federal Reserve signaled on Wednesday it would provide years of extraordinary support for the economy, with policymakers projecting a 9.3% unemployment rate at year-end. The unemployment rate has jumped from 3.5% in February and was at 13.3% in May.
“The steady retreat in claims is a positive development, but the labor market has suffered a traumatic blow and a full recovery will be measured in years, not weeks or months,” said
Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York. “The figures don’t capture the full extent of the blow dealt with workers during this unique crisis.”
New applications for state unemployment benefits likely totaled a seasonally adjusted 1.55 million for the week ended June 6, down from 1.877 million the prior week, according to a Reuters survey of economists. That would pull initial claims further away from a record of 6.867 million in late March.
But claims for jobless benefits would still be more than double their peak during the 2007-09 Great Recession.
Many businesses have reopened after being shuttered in mid-March to slow the spread of COVID-19. However, claims remain elevated amid job cuts outside the consumer sector, among industries that were not initially hit by the shutdown.
Fed Chairman Jerome Powell told reporters on Wednesday there would an “extended period” during which it would be “difficult for many people to find work.”

DISTORTED PICTURE

Initial claims are recorded when a person submits the first application for unemployment benefits. Once approved they become continuing claims and are reported with a one-week lag.
The report on Thursday is expected to show continuing claims slipped to 20 million in the week ending May 30 from 21.487 million in the prior week. Continuing claims have eased from a record high of 24.912 million in early May.
That decline has been attributed to the government’s Paycheck Protection Program, part of a historic fiscal package worth nearly $3 trillion, that offers business loans that can be partially forgiven if used for employee salaries.
“We are seeing the labor market high on PPP money,” said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles. “Once it runs out we might see a significant increase in layoffs again.”
Economists caution that neither initial nor continuing claims give an accurate picture.
The government has expanded eligibility for unemployment benefits to include gig workers, the self-employed and independent contractors who have been affected by the pandemic. These workers do not qualify for regular state unemployment insurance and must file claims under the Pandemic Unemployment Assistance (PUA) program.

Though PUA is filed weekly, they are not included in the initial and continuing claims count. Roughly 36 states are processing PUA claims. Economists recommend focusing on benefit recipients for all programs, which totaled 30 million in the week ending May 16.
“The labor market will continue to be under duress as businesses adapt to an economy running well below capacity, resulting in elevated layoffs,” said Alex Lin, a U.S. economist at Bank of America Merrill Lynch Global Research in New York.
The California Public Utilities Commission, the state government body responsible for licensing and regulating some transportation companies including Uber and Lyft, officially ruled Tuesday that it would formally consider drivers of those companies to be employees, in line with a newly-enacted state law known as AB5.
The finding, first reported by The San Francisco Chronicle, came as part of an 18-page document that covers a host of another upcoming rulemaking as it pertains to these types of companies, which are known in the state as “transportation networking companies,” or TNCs.
For now, it is not clear what practical difference this ruling defining drivers as employees make, given the companies’ longstanding resistance to re-classifying the backbone of their workforce.
However, last week, the California regulator also issued a formal reminder to the companies that they had to provide workers’ compensation for their employees by July 1, and under state law could consider revoking the companies’ relevant operating authority if they did not comply. Last month, Attorney General Xavier Becerra and the city attorneys from San Francisco, Los Angeles, and San Diego sued over the companies’ alleged non-compliance with AB5.
“We have long maintained that Uber and Lyft are misclassifying and exploiting their drivers, and we intend to prove that in court,” Meiling Bedard, a spokesman for San Francisco City Attorney Dennis Herrera, said in an email. “To the extent that the California Public Utilities Commission takes the position that Uber and Lyft drivers are employees, they join a long list of government entities and regulators that have consistently and correctly reached that same conclusion," she added.
Uber and Lyft did not respond to emailed questions, including one about whether they would abide by the July 1 deadline, and sent statements instead.
“Uber remains committed to expanded benefits and protections to drivers,” the company said in a statement sent by spokesman Davis White, referring to its efforts to overturn AB5 with a voter initiative that will be on the ballot in November 2020.
“If California regulators force rideshare companies to change their business model it would affect our ability to provide reliable and affordable services, along with threatening access to this essential work Californians depend on.”
When asked to elaborate as to why it would threaten jobs, White pointed to a summary of a May 2020 report conducted by a company called the Berkeley Research Group.
The summary claims that if Uber and Lyft had to re-classify drivers, it will result in an 80 to 90 percent reduction in the number of drivers. However, this four-page summary does not fully explain its analysis, and to date, the company has not provided a copy of the full report.
Similarly, Lyft spokesman CJ Macklin sent a brief statement saying that the “CPUC’s presumption is flawed,” and declined to explain further.
For years, both Lyft and Uber have said that if they are forced to reclassify gig workers as employees that such a change would have an adverse effect on their profitability, according to their latest annual reports submitted to the Securities and Exchange Commission in February and March 2020, respectively.
For years, the rival companies have touted the ad-hoc work schedule as an attractive perk for drivers. However, one of the major downsides has been that drivers are on the hook for incurring numerous work expenses, including gas, car maintenance, insurance, and more.
Shannon Liss-Riordan, a Boston-based labor lawyer who has sued both companies multiple times for alleged labor misclassification over the course of the past several years, called the move a “huge defeat for Uber and Lyft.”
“The pressure is escalating on Uber and Lyft and other companies that are thumbing their nose at the law,” she said. “If anything, this pandemic crisis is highlighting even more and raising public awareness about why we need basic protections for workers, and that companies that employ those workers need to be called to task.”

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