From the bottom up and the top down, we can look at the pandemic economy.
Starting at the bottom, we see smaller establishments affected by cutbacks at larger businesses.
Herron’s Printing & Graphics is a small Maryland business. If you needed personalized giveaways like USB drives and pens for a trade show, they could be your supplier. It is also possible that your hotel notepad has a logo that Herron’s printed and that your menu came from them. But now, trade shows have evaporated, hotels have few guests, and restaurants were closed. Herron’s printing and graphics business is down 90 percent from last year. They’ve laid off 9 of their 12 employees. They told the NY Times that they would not be ordering any new software or printing equipment for awhile.
At Tobias’s NYC jewelry store, pre-pandemic business was 100 customers a day. Recently, the total was six. Somewhat similar to Herron’s, they have just two employees after laying off four. And like Herron’s, their slowdown is affecting other businesses such as their landlord who agreed to defer a few months rent.
Small businesses were responsible for the most job creation in 2018. As a whole, small businesses (fewer than 500 employees) employ almost half of the private workforce (2015).
Many economists are concerned that the coronavirus pandemic is a small business existential threat. By May, two percent of all of them were gone. Even higher, three percent of all restaurants had closed.
When we combine the distressed small businesses that resemble Herron’s and Tobias, we wind up with a neighborhood that has problems. New York’s Times Square was especially hard hit.
Looking at the decrease in pedestrian traffic (below), we can understand why Gap, Old Navy, and American Eagle have listed their Times Square stores for sublease. Instead of August 2019’s 400,000+ average daily visitors, this August, Times Square welcomed 87,219.
The impact on hotels, retailers, and restaurants has been gargantuan:
The numbers add up to a gloomy picture. Close to 25 percent of all retail space in Times Square is available for leasing. Whereas theaters sold 14 million tickets last year, now they are shuttered. Approximately one half of the 66,000 people who work at the area’s restaurants, theaters, and hotels have been laid off or furloughed.
This map conveys how a stroll through Times Square might feel:
Our Bottom Line: The Pandemic Economy
We could say that the economy is a partially empty bathtub that is filling with economic activity. According to the October 2nd employment report, we added 661,000 jobs, a large number that really is small compared to the 22 million jobs we lost last March and April. Meanwhile, the unemployment rate is 7.9 percent in a labor force of approximately 160 million people.
So yes, the tub has begun to fill but businesses like Herron’s and Tobias might have a tough time adding to the water level.
My sources and more: Always excellent, the NY Times columnist Neil Irwin started me thinking about the bottom up and top down economic lens. Then, fortuitously, WSJ had the Times Square article. Finally, to complete the picture, my small business facts came from the SBA and my concern, from The Washington Post and this paper.