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Pet stores are considered essential. So are landscapers. Hair salons aren’t. Neither are shops that sell books or clothes.
The Trump administration’s labeling of industries considered “essential” is quickly creating winners and losers as coronavirus shuts down swaths of the economy. It’s also setting off a lobbying frenzy among industries—from battery makers to poultry producers—angling to join the ranks of hospitals, supermarkets, and other businesses whose continued operation has been deemed necessary.
But because the designation by the Department of Homeland Security is advisory only, it’s left a patchwork of rules from state to state. California has adopted the federal recommendations entirely, protecting whole sectors from the consequences of lengthy closings. Other state and local governments have used the advisory as a guide and added their own orders—leading to rules that vary by border, as some such as Pennsylvania opt to keep liquor stores closed while others consider them essential.
“There has been a flurry of lobbying as this crisis is almost an existential threat to just about every single business in the country in a way we haven’t seen,” said Dan Auble, a senior researcher with the Center for Responsive Politics, which has been tracking efforts to influence the process. “If you know the right people to call and argument to make you can get on that list.”
The battle to win the essential designation reflects the growing economic stakes as coronavirus takes hold in the U.S. forcing thousands of businesses to close and sparking a record surge in jobless claims. It comes as President Donald Trump presses to reopen the nation for business to slow the damage to the economy and lawmakers weigh another massive stimulus to save mom-and-pop firms.
In all, the administration has deemed as many as 62 million workers essential for the federal list, according to an estimate by the Brookings Institution, a Washington-based think tank. That’s more than one third of the 152 million workers on U.S. non-farm payrolls in February. But not everyone’s been successful. Groups representing the beer, wine, and liquor industry have yet to receive a national designation. Shops that sell vaping products, which weren’t included on the list either, were planning to mount a lobbying effort to change that, according to the American Vaping Association.
And not all states follow the administration’s guidance—for instance, in Virginia golfers can still hit the links, but in nearby Maryland the golf courses are closed. In Michigan, recreational marijuana dispensaries can remain open, but not in Massachusetts.
California has exempted all the sectors listed by DHS and added its wine industry—though tasting rooms have to be carryout only. And in New York, bike shops have been deemed essential, but not in Ohio, according to Adie Tomer, a fellow at the Brookings Institution.
“These lists are different everywhere,” Tomer said. “The door is wide open for governors and mayors to make their own designation.”
Among the most controversial designations involve the firearms industry. Gun and ammunition manufacturers and retailers were added to a revised version of the Trump administration’s list as were shooting ranges following a lobbying effort by groups such as the National Shooting Sports Foundation.
“It is precisely in times like these that citizens need to be self-reliant,” the Gun Owners of America wrote in a letter to the Department of Homeland Security.
Not all states agree. New York ordered firearm retailers closed but permitted liquor stores to stay open — prompting an outcry from the National Rifle Association.
New York officials are “going out of their way to protect liquor stores and release criminals onto the streets, while ignoring the public’s outcry over the suspension of Second Amendment rights,” the NRA said in a lawsuit challenging Governor Andrew Cuomo’s March 20 executive order.
NRA lawsuits
The New York lawsuit follows similar action the NRA took in Northern California, where it sued several cities including San Jose for ordering gun stores to close. Late last month in New Jersey, Governor Phil Murphy lifted a temporary ban on the sale of guns in the state after the NRA filed suit to block it, and Los Angeles County also backed off an earlier ban.
The patchwork is worrisome for groups ranging from the American Walnut Manufacturers Association to the Vinyl Siding Institute which joined with dozens of other trade association in a March 25 letter to the president, governors, mayors, and other local elected officials.
“It is imperative that the federal, state and local governments come together with uniform definitions of ‘critical infrastructure’ making clear what manufacturers must continue to operate, as well as take seriously the need to transport those products and have the workforce available to keep operations running,” they wrote.
Some companies and trade groups have hired lobbyists to argue their case. St. Louis-based battery maker Energizer Holdings Inc. sought the help of Washington D.C.’s Holland & Knight LLP to secure a coveted “critical industry” designation, according to a lobbying disclosure form. The National Chicken Council and the National Waste & Recycling Association have also enlisted lobbyists to gain designation as essential industries.
Appeals have been successful on the federal level. Groups representing coal mining companies were successful in adding the fossil fuel to the Trump administration’s list of essential industries after being left off the original version. Among their arguments: Reliable coal power “is critical to supporting hospitals, health care providers, and others on the front line,” according to a letter sent by America’s Power, a trade group which counts Peabody Energy Corp. and Murray Energy Corp. among its members.
Dirty laundry
Even laundromats have gotten in on the action. Workers in laundromats, laundry services, and dry cleaners were added to the list after Inwood, New York-based Laundrylux Inc., hired the lobbying shop Ballard Partners at the end of March. Their mission: “Designation as essential business in response to Covid-19 virus,” according to a lobbying disclosure form.
“You don’t think about laundry in a crisis situation until you run out of clean clothes,” said Daniel McFaul, who previously served as chief-of-staff to Trump ally Florida Representative Matt Gaetz, and teamed up with Brian Ballard, the firm’s marquee lobbyist, to press the issue with the Trump administration.
The process isn’t sitting well with some good-government types, who say the list provides a way for the Trump administration to dole out favors to preferred industries.
“It’s sickening that Trump is exploiting a pandemic to deliver financial benefits for his key political and financial allies,” said Tyson Slocum, an official with the watchdog group Public Citizen.
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—How South Korea is preparing for the first nationwide election of the coronavirus era
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—PODCAST: COVID-19 might have upended the concept of the best companies of the year
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