St. Lawrence County sees economic ripple effect as hospitals furlough hundreds

Updated: Apr. 20, 2020 at 5:22 PM EDT
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WATERTOWN, N.Y. (WWNY) - Now that hundreds of hospital workers are without paychecks in St. Lawrence County, the economic impact will be felt far and wide.

Fewer sandwiches might be going over the counter at Sandwich Warehouse. That's because more than 100 employees at nearby Claxton-Hepburn Medical Center are being furloughed without pay.

“The money that they were using to buy goods and services from local businesses is no longer there,” said Greg Gardner, SUNY Potsdam professor of business administration.

It's what's called a “secondary effect” of job loss. Economic observers say big layoffs have a ripple effect on businesses all up and down Main Street and beyond.

“As a result, those businesses are seeing reduced demand and they are under pressure to lay off,” said Gardner.

Claxton-Hepburn has now furloughed or otherwise cut pay for 170 employees. St. Lawrence Health System has furloughed 400 at the three hospitals it operates.

Congress is still wrangling over a second stimulus bill. But word is it could contain some financial relief for hospitals.

But for now, the CARES federal stimulus act is the only thing cushioning the blow. It has boosted individual unemployment benefits by $600 per week.

“These are short-term band aids that ultimately, hopefully, help us getting back to a normal economic situation. Where businesses are functioning, people are employed, where there’s growth," said Patrick Kelly, St. Lawrence County Industrial Development Agency CEO.

Both St. Lawrence Health System and Claxton-Hepburn say state orders ending elective surgeries and other services are behind the layoffs. Calling people back will depend in part on when those orders are lifted.

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