7 ms·

This is an unpopular opinion, but I think it's worth considering that most of these people are probably hourly wage earners, and so when things open up again, t

This is an unpopular opinion, but I think it's worth considering that most of these people are probably hourly wage earners, and so when things open up again, they will probably be hired back very quickly. The people aren't going anywhere, and they haven't been deleted from society. When businesses reopen this number will probably drop substantially. The businesses themselves (restaurants, retail, etc) haven't gone anywhere, they're just not operating. Yes there will be some bankruptcies, but those companies will restructure, assets will be sold, and something else will pop up in place. If someone has a strong case for why this isn't true, I'd love to hear it, but it's my current working thesis and I haven't been convinced otherwise. I know it's unpopular because of politics and such, but I'm optimistic about recovery.

pxeboot 7y ago
I am expecting to see record business at the local bars when the lockdowns end. The demand is still there.
- brenden2 7y ago
  That's funny, but it's something I've been thinking about too. When things open up I want to go see friends and catch up.
- ashtonkem 7y ago
  Doubtful. There’s not going to be a clear end time to this shut down, and I for one won’t be going to a bar until I’m vaccinated.
  - gpickett00 7y ago
    You’re getting downvoted but I fully agree. Most people are talking as if the virus will be gone in a month or so. The lockdowns are not going away. We are going to have new hotspots popping up every week once lockdowns start releasing.
    - macintux 7y ago
      The downvotes in this sub-thread really confuse me. Do people honestly believe this virus is going away?
      - ashtonkem 7y ago
        Even if it does, and I don’t know if it’ll ever go away, there’s not going to be a single date when it’s cool for us to go back to normal. Even a vaccine will take weeks or months to manufacture and distribute to the entire planet, if we even had one. There won’t be a clear end date, even in retrospect.
  - standardUser 7y ago
    There may never be a vaccine. If one can be developed, it may take years and it may not be completely safe and recommended for everyone.
    - ashtonkem 7y ago
      I’ve resigned myself to the general understanding that any vaccine, if it’s possible, will most likely be out next year or later.
    - JoeAltmaier 7y ago
      There are 115 vaccines in development now, in four very broad categories. This is a well-understood process and will very, very likely lead to several viable vaccines. Further, inoculation can occur much sooner. That is, introducing antibodies obtained from recovered folk, into vulnerable folk. This is nearing deployment right now. Don't be a wet blanket. Its not all bleak.
      - macintux 7y ago
        We don’t even know yet that people who have been previously infected have gained immunity. It’s fine to be optimistic, but there are no guarantees here.
        JoeAltmaier 7y ago
        That seems like more wet blanket. How often does recovery not give immunity? Lets keep it real.
        macintux 7y ago
        In addition to the sibling comment, there’s also the unlikely dengue scenario where getting infected once actually makes the next time worse. Let’s hope we solve this virus (for whatever definition applies; we’re not particularly good at solving viruses) and apply some of that same effort to dengue before the world gets much warmer and it spreads.
- macintux 7y ago
  Dear heavens I hope not. That would mean people haven’t learned a damned thing, and would also mean we’d be back in lockdown quickly (or would regret not doing so).
- thehoff 7y ago
  I don't think right away. There will be segments of the population still wary to go out into public places where you're shoulder to shoulder with others. It'll take time for people to get comfortable with this (or a vaccine is developed). edit: Sure there will be groups where this will be the case but not enough to cause packed bars.
- JoeAltmaier 7y ago
  With what cash? The 20M Americans out of a job will have spent any ready money on food and rent.
  - _curious_ 7y ago
    Americans will find ways to spend money they don't have on things they don't need - like alcohol.
    - JoeAltmaier 7y ago
      Don't know any bartender that will take a promise...
      - _curious_ 7y ago
        Do you know any people who will beg, borrow, or steal to purchase alcohol off-sale?
- the_snooze 7y ago
  Heading into the lockdowns, the data doesn't bear that out. Restaurant demand crashed before lockdowns were in place: https://www.opentable.com/state-of-industry https://www.opentable.com/state-of-industry The US had a > 90% decline in bookings by March 18. California was one of the more aggressive places with issuing a statewide lockdown, but that didn't happen until March 19: https://abc7news.com/timeline-of-coronavirus-us-coronvirus-bay-area-sf/6047519/ https://abc7news.com/timeline-of-coronavirus-us-coronvirus-b...
  - standardUser 7y ago
    Restaurants were closing or limiting business before official lockdowns in pretty much every jurisdiction that has had a lockdown. You need to look a week or two before official lockdown dates to see the start of declining business.
Zenbit_UX 7y ago
> The people aren't going anywhere, and they haven't been deleted from society. Uh, not to get too dark here, but that's definetly happening to some people.
- throwaway_USD 7y ago
  You are down voted, but it is true. The same thing happened with the 2008 housing and financial crisis, millions lost jobs, lost their houses, almost any major city can tell you about the explosion of homelessness during that time and has never been addressed.
snazz 7y ago
A lot of small businesses have a much harder time "just not operating"; it will probably be a long time until local small businesses can come back. It's also unlikely that people will immediately go out as soon as it is deemed safe to do so. Our habits will have changed by then and we already know not to trust the (US) government's ability to accurately tell us when it's safe.
learc83 7y ago
Yeah I think this is a bit of an artificial recession in that demand hasn't declined for any of the normal reasons, but because people are being forced not to consume. My guess is that means recovery will be quicker because all of the pent up demand will explode once the restrictions are lifted. I could be wrong though. I could see a situation where people are skittish and decide to increase their savings long term--less travel, less eating out etc...
- brenden2 7y ago
  Right. I've been noticing on my walks how many Amazon delivery trucks there are, how many Amazon boxes are sitting outside in the trash piles. While people certainly aren't spending money dining out, they're still going HAM with their online shopping. There's so much doom and gloom in the news, but when I look at the real data I'm not seeing anything that supports the apocalypse predictions.
  - ardy42 7y ago
    >> Yeah I think this is a bit of an artificial recession in that demand hasn't declined for any of the normal reasons, but because people are being forced not to consume. > Right. I've been noticing on my walks how many Amazon delivery trucks there are, how many Amazon boxes are sitting outside in the trash piles. While people certainly aren't spending money dining out, they're still going HAM with their online shopping. I don't think that observation indicates what you seem to think it does. Amazon's has been scheduling delivery for "non-essential" items far out to April 30th for some time now, and many people have been attempting to shift their retail shopping for essentials to delivery services in order to socially distance to avoid the coronavirus. Those boxes might have had things like toothpaste and diapers that people need to buy, recession or no.
    - learc83 7y ago
      > Amazon's has been scheduling delivery for "non-essential" items far out to April 30th for some time now They still have many non-essential items available for delivery in a few days, and you be surprised what is considered essential.
DrNuke 7y ago
Social distancing halving (or more) the revenue of such businesses?
gilbetron 7y ago
Short term, that is mostly the theory. However, there are businesses that will have closed permanently, and the number of them grows day by day. Many restaurants survive on razor thin margins, and a few weeks without revenue can shut them down for good. Additionally, people are getting less money right now and so when things reopen you have a bit of a chicken-and-egg problem where restaurants don't get that many people because people need jobs to go there. However, the stock market largely shares your optimism at this point.
- learc83 7y ago
  >a few weeks without revenue can shut them down for good But what does shut down really mean? They've laid off all their staff, they aren't buying food, so their only major expense is rent. The hardest thing about opening a restaurant is staying open long enough for people to find out about them, so it's in the landlord's best interest not to evict restaurants that will likely do ok once the restrictions are lifted.
  - JoeAltmaier 7y ago
    Curiously, I've heard that small-business folks have stopped paying rent! My sister's shop is in a strip mall, and she's the only one who paid the landlord this month. Even the Breugger's Bagel place didn't pay (apparently by corporate decree?!) It's happening all over my town. Tenants paying 1/2 or nothing.
    - madengr 7y ago
      I know my state has barred evictions until May. I assume that pertains to commercial property too.
      - JoeAltmaier 7y ago
        So folks instantly capitalize on that, by stiffing the landlord? It would never have occurred to me. One I talked to was even militant about it. "I tried to call him to negotiate something, but he wouldn't answer his phone! So I sent a check for half, and wrote 'paid in full' on it!" Wow.
standardUser 7y ago
I don't see all of the retail jobs coming back. Small stores will go under, maybe even some big chains, and there will be a further shift to online shopping as millions more Americans become accustomed to it.
- brenden2 7y ago
  Retail has been dying for a while, but that just opens up opportunities elsewhere. It's kind of like the nail salon boom: retail has been dying, but nail salons have been booming (pre-shutdown)[0]. I've been noticing for a while in NYC there's a huge supply glut of ground level retail. Lots of for lease signs in vacant spaces (pre-shutdown). In my apartment building, the ground floor space has been vacant with a for lease sign for 3 years (and I live on 5th Ave in NoMad, which is prime retail). [0]: https://fee.org/articles/the-salon-boom-is-actually-good-for-both-consumers-and-workers/ https://fee.org/articles/the-salon-boom-is-actually-good-for...
  - _curious_ 7y ago
    Interesting. Also a noticeable supply prime CRE empty for a long time before CV19 in my neck of the 'prime location' woods. That asset class has been totally inflated beyond bubble in the past 5 years IMO and will never return to the same levels of occupancy (or $/sf rates).
- matwood 7y ago
  A common theme is that crisis just accelerate what's already happening. Old school retail has been slowly dying for awhile and the death has been accelerated. Things like restaurants have been growing in popularity so when the lockdown ends I expect those to do well again. Even on the personal level, there are more babies born and divorces post crisis. One that I haven't figured out yet is the NFL. I know they have been making record money, but head injuries has slowed down the feed of talent. If sports are canceled until next year, does this accelerate a move to a different nationally popular sport? Unlikely, but something I've been thinking about.
  - 7y ago
JoeAltmaier 7y ago
We will see a sharp uptick in new business failures - all those that opened into this climate with empty showrooms and blank customer lists. They won't be hiring. Even some big companies will retool around automation I imagine - to survive. Those jobs will never come back. Anyone looking for a job after this is 'over' will be shoulder to shoulder with 20M other people doing the same thing. Its going to be rough.
- _curious_ 7y ago
  "Even some big companies will retool around automation I imagine - to survive. Those jobs will never come back. Anyone looking for a job after this is 'over' will be shoulder to shoulder with 20M other people doing the same thing. Its going to be rough. " Wholly agree - automation/robotics/AI is a net winner in the end; wage suppression for those jobs that may return caused by increased (abundant?) labor supply. Most creative/dev freelancers I know who are getting work are not systematically increasing their rates like they used to be only a month or so ago, instead flat at best, and worse, competing more now which drives rates down.
thehoff 7y ago
I'd like to be optimistic about the recovery but for those locations that do go under (retail, restaurants, etc) there will be replacements but I have a feeling new tenants will take a long time to fill those empty locations. I think people will be wary to put their money into a new business not knowing what the next year will look like. edit: spelling
jasonv 7y ago
When your employees file for unemployment, if you didn’t fire them for cause, you can be liable for their unemployment benefit payments.
- Consultant32452 7y ago
  You start paying someone's unemployment the second you hire them, because most states require unemployment insurance by law. You don't suddenly get a new bill when someone is let go, You've already paid. https://smallbusiness.chron.com/employee-files-unemployment-benefits-company-pay-20067.html https://smallbusiness.chron.com/employee-files-unemployment-...
  - jasonv 7y ago
    Ok, looking further into this: “Nevada uses the "Reserve Ratio" formula to determine previous experience, which is the method used by a majority of the states. The Employment Security Division maintains a permanent "Experience Record" for each employer, consisting of accumulated taxes paid, accumulated benefits charged to his account, and average taxable payroll for the prior 3 years. Each year, the employer's reserve ratio is calculated from his experience record to determine his tax rate under the schedule in effect.” http://ui.nv.gov/ESSHTML/ui_information.htm http://ui.nv.gov/ESSHTML/ui_information.htm
  - mikem170 7y ago
    >You don't suddenly get a new bill when someone is let go The link you provided mentioned that an employer may/will have to pay a higher percentage of unemployment payroll insurance/tax after more former employees collect unemployment. Their rate goes up based on how many employees they lay off. I realize this isn't exactly what the comment you were applying to was talking about, but I thought it was interesting. I knew there was some reason that employers don't want their ex-employees to receive unemployment.
KallDrexx 7y ago
The problem is this assumes that the businesses that employ these hourly workers can snap their fingers one day and Tada, be open. The problem is that businesses can only be operating if the businesses they depend on upstream and downstream are open. Restaurants can't open until they get their food restocked, but restaurant suppliers haven't been stocking at their previous levels because they haven't had customers. Restaurants also may not be able to go back to 100% capacity in order to spread people out, which means the restaurants won't make enough money to warrant the number of servers and cooks they had previously. Restaurants may not even be able to afford to re-open or pay the same number of staff even if business warrants it because of built up backpayments on rent and accounts payables. This isn't just a food service industry problem. What about movie theaters? Theaters attendance had heavily declined before shelter in place directives caused them to close. They aren't going to open to full capacity and need the whole staff they originally had. Have an IT consulting shop? I know several who had their services (both commercial and residential) dry up because companies didn't want to incur extra expenditures and house holds were scared because of unemployment and getting less PC problems diagnosed or buying less hardware. The IT shop can't staff back up until their customers starts coming back. Hotels won't need to rehire a lot of their cleaning crews until their occupancy rates go back up. Same with airline and airport staff, and indications do not show that people will be willing to travel immediately once lock downs are gone. etc... Every part of our economy is dependent on each other, and even if we had everyone vaccinated today there would still be significant spin-up time until we even halve the unemployment rate.
matwood 7y ago
Instead of a V recovery, think of it as a flipped check mark. Once lockdown ends there will be quick partial recovery (we've already seen some of that in the stock market), and then we'll find out fully which industries are not coming back for awhile if ever (brick and mortar, commercial RE, etc...)
- madengr 7y ago
  The brick and mortar may be helped by the fact that Amazon can’t deliver on time. The curbside service of brick and mortar has been awesome.
  - matwood 7y ago
    Good point. Something I mentioned in another post was that crisis accelerate what's already happening. Is this move to service/pick up a pivot that can save brick and mortar? At some point Amazon will adjust though. It's interesting to watch happen.
remote_phone 7y ago
There are a couple of things: 1) most Americans can’t afford an unexpected $400 expense. This multi-month lockdown will be much more than that. I doubt landlords will simply forgive rent, so any Americans will owe several months of rent without any revenue. That will mean several months of no disposable income to go spend at a bar or a restaurant. That means small businesses like those will suffer longer than essential staples like grocery stores. 2) Travel And tourism are dead and will be dead until a vaccine is available. Are you going to risk getting sick in a foreign country, especially when travel insurance likely won’t cover pandemics anymore? Tourism is definitely a large source of revenue for bars and restaurants will be a huge impairment on revenues as well. 3) People aren’t necessarily going to come back to the same jobs post-coronavirus. They might flock to jobs that pay better or have better health benefits. There might be a significant delay in getting staff up and running or they may need to pay higher wages. 4) more to point 1, many people have multiple part time jobs to afford to live. Losing even one of those jobs will affect them deeply. If they can’t replace their income or get those same number of jobs post-coronavirus, their spending will also be curtailed. All of these contribute to lower revenues for business owners once the economy “starts back up”. I don’t think it will be a fast recovery. A lot of people will be financially hurt for a while. Owners will need some very thick skin and deep pockets to wait out for revenues to come back. Some may see impaired revenues for months longer, which probably isn’t enough to keep the business afloat.
- theferalrobot 7y ago
  > most Americans can’t afford an unexpected $400 expense This is just not true despite the fact that a few media sources twisted a statement from the reserve board a while back. Here is a fact that may help provide some context: The median net worth of a us household is $97,300.
  - cpursley 7y ago
    You can't pay your light bill or insurance deductible with your net worth
    - 7y ago
save_ferris 7y ago
I think the major miscalculation you’re making here is that business will magically return to these places as soon as things open back up. People are not going to patronize restaurants and bars as long as the risk of infection remains high. If half of people stay home due to Covid and the other half don’t care, most businesses won’t be able to sustain. A quick recovery is completely dependent on full economic participation, particularly by those lucky enough to still have jobs. The US still has no scalable testing system, despite being promised one over a month ago, and we still don’t yet know if Covid can reinfect people. Opening back up without testing puts small businesses at risk by asking them to start spending money to open back up with no guarantee business will come back. If that happens, the government will have more people to bail out.
- cpursley 7y ago
  > People are not going to patronize restaurants and bars as long as the risk of infection remains high. It's not even that. People's spending habits have and will change drastically (those who still have incomes). And those who were put out of work will be playing financial catch-up once they obtain new employment and are very unlikely to patronize bars, etc at the same rates they used to. We also have to consider that people who do keep their jobs already are or will likely be supporting family members and friends in need with their excess cash for a while (the cash they would typically spend at the bar, etc). Additionally, those with jobs who can are going to continue saving their money at higher rates than before (which is currently happening despite the risk of inflation and/or low negative interest rates). At least, this is how I've changed my habits.
  - save_ferris 7y ago
    I agree with this too, I'm definitely in the still-employed-but-spending-has-changed camp as well. We're completely ignoring the higher order effects of what the pandemic is doing and I think we do so at our own peril.
- JoeAltmaier 7y ago
  Our governor talks of opening restaurants with fewer tables. That's pretty much a no-go, they rely on filling all the tables and then its thin margins. Running half a restaurant with full overhead? Nope.
baron_harkonnen 7y ago
I'm genuinely confused how anyone in tech can honestly believe that this is only effecting hourly workers. That was certainly true for the first week but if my linkedin is any indicator last week was a blood bath for many startups. I can easily name 5 companies in my area that had greater than 20% layoffs just last week. Google is already making the call to slow down hiring. Each week from here on out we are going to continue to see this impact more and more people in more secure jobs become effected. This will remain true even as the pandemic eases up.
- _bxg1 7y ago
  Startups being the key word. There's much more to tech than startups, and the picture outside of them is significantly more mixed. Google has slowed, but Facebook has accelerated. Etc.
  - Exmoor 7y ago
    Obviously things will differ greatly from industry to industry and company to company, but you're lying to yourself if you think this is going to end at startups. It takes a bit of time for dominoes to fall, but as the various factors such as consumer spending, B2B spending, supply-chain issues, etc. begin to ripple out the waves will effect more and more companies.
    - _bxg1 7y ago
      It has an effect on other businesses but it'll be far from a "blood bath"
wonderwonder 7y ago
I unfortunately disagree with this. Restaurants operate on thin margins. They are currently closed so all of the food, etc is likely waste. On top of that they are going to be months in arrears on rent and fees to their vendors. Many of those vendors are going to be months in arrears to their own employees, vendors etc. In order to open back up, pay rent / vendors and employees they are going to each need a large cash infusion. They cant just open, and hope that customers come back, if they do that they wont be able to pay the employees on payday. Many of them are likely done for good. Not to say other things wont replace them. Regarding most of these people being hourly, I think that is not correct. Lots are but there are tons of startups, unicorns and publicly traded companies laying off 20+ % of their employees. Travel companies are slashing their backend salaried work force. Many of these companies are going to learn they can operate painfully but still operate with a greatly reduced workforce, boosting the bottom line and increasing share holder value. The remaining employees will be tasked to do work previously done by several employees and will not receive additional compensation for it. On top of that, until we have a vaccine, many people are simply not going to go out and spend money in public. I appreciate your optimism though and very much hope you are right. I could be completely wrong though, stock market seems to think I am. Every 5 million people laid off is a 5% rally on the S&P. Personal opinion: We have tilted business too far towards 'share holder value' and C-suite compensation and away from treating employees like real people with lives. The cycle will continue until this changes. We are berating individuals for not having savings but giving these massive corporations a pass and massive bailout. I think we need to fundamentally change what it means to be a publicly traded company in this country. Opinion note 2: A monthly efficient, meaningful and importantly, universal government injection of cash into households for the next several months could spur a massive recovery and is likely the best solution.
- _curious_ 7y ago
  "I think we need to fundamentally change what it means to be a publicly traded company in this country." What would you change?
  - wonderwonder 7y ago
    Require a % of stocks be distributed to employees. Allow them to vote as a shareholder block. Limit C-suite pay to a multiple of employee pay. Eliminate golden parachutes. Tie C-Suite compensation to some metric measuring employee quality of life.
jhowell 7y ago
The impact changes in consumer behavior will have on business models that employ hourly wage earners is unknown and difficult to model especially in the absence of a vaccine. The value in sharing a car ride to go out for the evening, attending a concert or sporting event, or living in large, (formerly) convenient, densely populated areas is being reevaluated by consumers no matter how much money the federal reserve puts into circulation to bolster these potentially antiquated practices. The thought of dying, being intubated or having long term respiratory problems that elevate your risk for future medical complications is part of the calculation now. The upside I see is the amount of money people who are working are saving now that there is much less to consume, though this changes behavior as well.
nickthemagicman 7y ago
I like your idealism and hope you're right but have a feeling we've quarantined ourselves AND our economy. When things open back up again it's going to be brutal. Children begging in the streets brutal.
_curious_ 7y ago
"it's worth considering that most of these people are probably hourly wage earners" I'll consider your unpopular opinion because it's healthy to think about a range of scenarios...though curious to know why your optimism operates on this premise?
- brenden2 7y ago
  It's usually easy to hire/train hourly employees because they are less specialized. Hiring someone to wait tables is much easier than hiring a software engineer.
ta1234567890 7y ago
> The businesses themselves (restaurants, retail, etc) haven't gone anywhere, they're just not operating. Yes there will be some bankruptcies, but those companies will restructure, assets will be sold, and something else will pop up in place. I personally know of dozens of small businesses that have closed for good. You can also go on Reddit and check the small businesses subs for a reality check. Small business owners and employees are hurting really bad and government aid has pretty much failed them. It also seems you are thinking of small businesses as if they were large corporations that can file for chapter 11 and simply restructure. Small businesses and their owners cannot afford that, they usually close down out of court or file for chapter 7, which implies a total shut down and liquidation of their business at a loss. The business owners will be ruined and most likely won't be able to start a new business for years, if ever. And in these uncertain times, it's very doubtful anyone will want to take their place for a while. Honestly it seems to me you are so far removed from these people, businesses and their actual lives, that you are out of touch with reality. I find your lack of empathy appalling.
JamesBarney 7y ago
This supply side argument could also be made for the great recession and great depression. But obviously those still happened. Historically when lots of companies file for bankruptcy and large swathes of the work force are laid off we enter a recession/depression. And they've all been stickier than your comment suggests.
whatok 7y ago
A lot of this is timing on reopening and how consumers are doing. If you just naively assumed a 1:1 fire to rehire ratio on some time window, there's still an extreme amount of friction involved in rebalancing that to previous levels. Spending is not going to magically bounce back to normal as anyone who had their mortgage or rent frozen is going to have to pay that back in a few months. Or just pay down credit card debt that they racked up. There's a lot of good data out there showing that savings rates (that has a massive effect on consumer spending) go way up during recessions/depressions and I wouldn't expect that to be any different. I also wouldn't assume that there won't be further layoffs later in the year that hit salaried workers. Airlines are almost certainly going to do massive layoffs as soon as their federal programs expire in October and a huge portion of those people are going to be competing for hourly jobs. Then think about how many people are going to get laid off after their employer starts monitoring VPN traffic and fully realizes that a good 20-30% of their workforce does nothing all day.

pxeboot 7y ago

I am expecting to see record business at the local bars when the lockdowns end. The demand is still there.

brenden2 7y ago
That's funny, but it's something I've been thinking about too. When things open up I want to go see friends and catch up.
ashtonkem 7y ago
Doubtful. There’s not going to be a clear end time to this shut down, and I for one won’t be going to a bar until I’m vaccinated.
- gpickett00 7y ago
  You’re getting downvoted but I fully agree. Most people are talking as if the virus will be gone in a month or so. The lockdowns are not going away. We are going to have new hotspots popping up every week once lockdowns start releasing.
  - macintux 7y ago
    The downvotes in this sub-thread really confuse me. Do people honestly believe this virus is going away?
    - ashtonkem 7y ago
      Even if it does, and I don’t know if it’ll ever go away, there’s not going to be a single date when it’s cool for us to go back to normal. Even a vaccine will take weeks or months to manufacture and distribute to the entire planet, if we even had one. There won’t be a clear end date, even in retrospect.
- standardUser 7y ago
  There may never be a vaccine. If one can be developed, it may take years and it may not be completely safe and recommended for everyone.
  - ashtonkem 7y ago
    I’ve resigned myself to the general understanding that any vaccine, if it’s possible, will most likely be out next year or later.
  - JoeAltmaier 7y ago
    There are 115 vaccines in development now, in four very broad categories. This is a well-understood process and will very, very likely lead to several viable vaccines. Further, inoculation can occur much sooner. That is, introducing antibodies obtained from recovered folk, into vulnerable folk. This is nearing deployment right now. Don't be a wet blanket. Its not all bleak.
    - macintux 7y ago
      We don’t even know yet that people who have been previously infected have gained immunity. It’s fine to be optimistic, but there are no guarantees here.
      - JoeAltmaier 7y ago
        That seems like more wet blanket. How often does recovery not give immunity? Lets keep it real.
        macintux 7y ago
        In addition to the sibling comment, there’s also the unlikely dengue scenario where getting infected once actually makes the next time worse. Let’s hope we solve this virus (for whatever definition applies; we’re not particularly good at solving viruses) and apply some of that same effort to dengue before the world gets much warmer and it spreads.
macintux 7y ago
Dear heavens I hope not. That would mean people haven’t learned a damned thing, and would also mean we’d be back in lockdown quickly (or would regret not doing so).
thehoff 7y ago
I don't think right away. There will be segments of the population still wary to go out into public places where you're shoulder to shoulder with others. It'll take time for people to get comfortable with this (or a vaccine is developed). edit: Sure there will be groups where this will be the case but not enough to cause packed bars.
JoeAltmaier 7y ago
With what cash? The 20M Americans out of a job will have spent any ready money on food and rent.
- _curious_ 7y ago
  Americans will find ways to spend money they don't have on things they don't need - like alcohol.
  - JoeAltmaier 7y ago
    Don't know any bartender that will take a promise...
    - _curious_ 7y ago
      Do you know any people who will beg, borrow, or steal to purchase alcohol off-sale?
the_snooze 7y ago
Heading into the lockdowns, the data doesn't bear that out. Restaurant demand crashed before lockdowns were in place: https://www.opentable.com/state-of-industry https://www.opentable.com/state-of-industry The US had a > 90% decline in bookings by March 18. California was one of the more aggressive places with issuing a statewide lockdown, but that didn't happen until March 19: https://abc7news.com/timeline-of-coronavirus-us-coronvirus-bay-area-sf/6047519/ https://abc7news.com/timeline-of-coronavirus-us-coronvirus-b...
- standardUser 7y ago
  Restaurants were closing or limiting business before official lockdowns in pretty much every jurisdiction that has had a lockdown. You need to look a week or two before official lockdown dates to see the start of declining business.

Zenbit_UX 7y ago

> The people aren't going anywhere, and they haven't been deleted from society. Uh, not to get too dark here, but that's definetly happening to some people.

throwaway_USD 7y ago
You are down voted, but it is true. The same thing happened with the 2008 housing and financial crisis, millions lost jobs, lost their houses, almost any major city can tell you about the explosion of homelessness during that time and has never been addressed.

snazz 7y ago

A lot of small businesses have a much harder time "just not operating"; it will probably be a long time until local small businesses can come back. It's also unlikely that people will immediately go out as soon as it is deemed safe to do so. Our habits will have changed by then and we already know not to trust the (US) government's ability to accurately tell us when it's safe.

learc83 7y ago

Yeah I think this is a bit of an artificial recession in that demand hasn't declined for any of the normal reasons, but because people are being forced not to consume. My guess is that means recovery will be quicker because all of the pent up demand will explode once the restrictions are lifted. I could be wrong though. I could see a situation where people are skittish and decide to increase their savings long term--less travel, less eating out etc...

brenden2 7y ago
Right. I've been noticing on my walks how many Amazon delivery trucks there are, how many Amazon boxes are sitting outside in the trash piles. While people certainly aren't spending money dining out, they're still going HAM with their online shopping. There's so much doom and gloom in the news, but when I look at the real data I'm not seeing anything that supports the apocalypse predictions.
- ardy42 7y ago
  >> Yeah I think this is a bit of an artificial recession in that demand hasn't declined for any of the normal reasons, but because people are being forced not to consume. > Right. I've been noticing on my walks how many Amazon delivery trucks there are, how many Amazon boxes are sitting outside in the trash piles. While people certainly aren't spending money dining out, they're still going HAM with their online shopping. I don't think that observation indicates what you seem to think it does. Amazon's has been scheduling delivery for "non-essential" items far out to April 30th for some time now, and many people have been attempting to shift their retail shopping for essentials to delivery services in order to socially distance to avoid the coronavirus. Those boxes might have had things like toothpaste and diapers that people need to buy, recession or no.
  - learc83 7y ago
    > Amazon's has been scheduling delivery for "non-essential" items far out to April 30th for some time now They still have many non-essential items available for delivery in a few days, and you be surprised what is considered essential.

DrNuke 7y ago

Social distancing halving (or more) the revenue of such businesses?

gilbetron 7y ago

Short term, that is mostly the theory. However, there are businesses that will have closed permanently, and the number of them grows day by day. Many restaurants survive on razor thin margins, and a few weeks without revenue can shut them down for good. Additionally, people are getting less money right now and so when things reopen you have a bit of a chicken-and-egg problem where restaurants don't get that many people because people need jobs to go there. However, the stock market largely shares your optimism at this point.

learc83 7y ago
>a few weeks without revenue can shut them down for good But what does shut down really mean? They've laid off all their staff, they aren't buying food, so their only major expense is rent. The hardest thing about opening a restaurant is staying open long enough for people to find out about them, so it's in the landlord's best interest not to evict restaurants that will likely do ok once the restrictions are lifted.
- JoeAltmaier 7y ago
  Curiously, I've heard that small-business folks have stopped paying rent! My sister's shop is in a strip mall, and she's the only one who paid the landlord this month. Even the Breugger's Bagel place didn't pay (apparently by corporate decree?!) It's happening all over my town. Tenants paying 1/2 or nothing.
  - madengr 7y ago
    I know my state has barred evictions until May. I assume that pertains to commercial property too.
    - JoeAltmaier 7y ago
      So folks instantly capitalize on that, by stiffing the landlord? It would never have occurred to me. One I talked to was even militant about it. "I tried to call him to negotiate something, but he wouldn't answer his phone! So I sent a check for half, and wrote 'paid in full' on it!" Wow.

standardUser 7y ago

I don't see all of the retail jobs coming back. Small stores will go under, maybe even some big chains, and there will be a further shift to online shopping as millions more Americans become accustomed to it.

brenden2 7y ago
Retail has been dying for a while, but that just opens up opportunities elsewhere. It's kind of like the nail salon boom: retail has been dying, but nail salons have been booming (pre-shutdown)[0]. I've been noticing for a while in NYC there's a huge supply glut of ground level retail. Lots of for lease signs in vacant spaces (pre-shutdown). In my apartment building, the ground floor space has been vacant with a for lease sign for 3 years (and I live on 5th Ave in NoMad, which is prime retail). [0]: https://fee.org/articles/the-salon-boom-is-actually-good-for-both-consumers-and-workers/ https://fee.org/articles/the-salon-boom-is-actually-good-for...
- _curious_ 7y ago
  Interesting. Also a noticeable supply prime CRE empty for a long time before CV19 in my neck of the 'prime location' woods. That asset class has been totally inflated beyond bubble in the past 5 years IMO and will never return to the same levels of occupancy (or $/sf rates).
matwood 7y ago
A common theme is that crisis just accelerate what's already happening. Old school retail has been slowly dying for awhile and the death has been accelerated. Things like restaurants have been growing in popularity so when the lockdown ends I expect those to do well again. Even on the personal level, there are more babies born and divorces post crisis. One that I haven't figured out yet is the NFL. I know they have been making record money, but head injuries has slowed down the feed of talent. If sports are canceled until next year, does this accelerate a move to a different nationally popular sport? Unlikely, but something I've been thinking about.
- 7y ago

JoeAltmaier 7y ago

We will see a sharp uptick in new business failures - all those that opened into this climate with empty showrooms and blank customer lists. They won't be hiring. Even some big companies will retool around automation I imagine - to survive. Those jobs will never come back. Anyone looking for a job after this is 'over' will be shoulder to shoulder with 20M other people doing the same thing. Its going to be rough.

_curious_ 7y ago
"Even some big companies will retool around automation I imagine - to survive. Those jobs will never come back. Anyone looking for a job after this is 'over' will be shoulder to shoulder with 20M other people doing the same thing. Its going to be rough. " Wholly agree - automation/robotics/AI is a net winner in the end; wage suppression for those jobs that may return caused by increased (abundant?) labor supply. Most creative/dev freelancers I know who are getting work are not systematically increasing their rates like they used to be only a month or so ago, instead flat at best, and worse, competing more now which drives rates down.

thehoff 7y ago

I'd like to be optimistic about the recovery but for those locations that do go under (retail, restaurants, etc) there will be replacements but I have a feeling new tenants will take a long time to fill those empty locations. I think people will be wary to put their money into a new business not knowing what the next year will look like. edit: spelling

jasonv 7y ago

When your employees file for unemployment, if you didn’t fire them for cause, you can be liable for their unemployment benefit payments.

Consultant32452 7y ago
You start paying someone's unemployment the second you hire them, because most states require unemployment insurance by law. You don't suddenly get a new bill when someone is let go, You've already paid. https://smallbusiness.chron.com/employee-files-unemployment-benefits-company-pay-20067.html https://smallbusiness.chron.com/employee-files-unemployment-...
- jasonv 7y ago
  Ok, looking further into this: “Nevada uses the "Reserve Ratio" formula to determine previous experience, which is the method used by a majority of the states. The Employment Security Division maintains a permanent "Experience Record" for each employer, consisting of accumulated taxes paid, accumulated benefits charged to his account, and average taxable payroll for the prior 3 years. Each year, the employer's reserve ratio is calculated from his experience record to determine his tax rate under the schedule in effect.” http://ui.nv.gov/ESSHTML/ui_information.htm http://ui.nv.gov/ESSHTML/ui_information.htm
- mikem170 7y ago
  >You don't suddenly get a new bill when someone is let go The link you provided mentioned that an employer may/will have to pay a higher percentage of unemployment payroll insurance/tax after more former employees collect unemployment. Their rate goes up based on how many employees they lay off. I realize this isn't exactly what the comment you were applying to was talking about, but I thought it was interesting. I knew there was some reason that employers don't want their ex-employees to receive unemployment.

KallDrexx 7y ago

The problem is this assumes that the businesses that employ these hourly workers can snap their fingers one day and Tada, be open. The problem is that businesses can only be operating if the businesses they depend on upstream and downstream are open. Restaurants can't open until they get their food restocked, but restaurant suppliers haven't been stocking at their previous levels because they haven't had customers. Restaurants also may not be able to go back to 100% capacity in order to spread people out, which means the restaurants won't make enough money to warrant the number of servers and cooks they had previously. Restaurants may not even be able to afford to re-open or pay the same number of staff even if business warrants it because of built up backpayments on rent and accounts payables. This isn't just a food service industry problem. What about movie theaters? Theaters attendance had heavily declined before shelter in place directives caused them to close. They aren't going to open to full capacity and need the whole staff they originally had. Have an IT consulting shop? I know several who had their services (both commercial and residential) dry up because companies didn't want to incur extra expenditures and house holds were scared because of unemployment and getting less PC problems diagnosed or buying less hardware. The IT shop can't staff back up until their customers starts coming back. Hotels won't need to rehire a lot of their cleaning crews until their occupancy rates go back up. Same with airline and airport staff, and indications do not show that people will be willing to travel immediately once lock downs are gone. etc... Every part of our economy is dependent on each other, and even if we had everyone vaccinated today there would still be significant spin-up time until we even halve the unemployment rate.

matwood 7y ago

Instead of a V recovery, think of it as a flipped check mark. Once lockdown ends there will be quick partial recovery (we've already seen some of that in the stock market), and then we'll find out fully which industries are not coming back for awhile if ever (brick and mortar, commercial RE, etc...)

madengr 7y ago
The brick and mortar may be helped by the fact that Amazon can’t deliver on time. The curbside service of brick and mortar has been awesome.
- matwood 7y ago
  Good point. Something I mentioned in another post was that crisis accelerate what's already happening. Is this move to service/pick up a pivot that can save brick and mortar? At some point Amazon will adjust though. It's interesting to watch happen.

remote_phone 7y ago

There are a couple of things: 1) most Americans can’t afford an unexpected $400 expense. This multi-month lockdown will be much more than that. I doubt landlords will simply forgive rent, so any Americans will owe several months of rent without any revenue. That will mean several months of no disposable income to go spend at a bar or a restaurant. That means small businesses like those will suffer longer than essential staples like grocery stores. 2) Travel And tourism are dead and will be dead until a vaccine is available. Are you going to risk getting sick in a foreign country, especially when travel insurance likely won’t cover pandemics anymore? Tourism is definitely a large source of revenue for bars and restaurants will be a huge impairment on revenues as well. 3) People aren’t necessarily going to come back to the same jobs post-coronavirus. They might flock to jobs that pay better or have better health benefits. There might be a significant delay in getting staff up and running or they may need to pay higher wages. 4) more to point 1, many people have multiple part time jobs to afford to live. Losing even one of those jobs will affect them deeply. If they can’t replace their income or get those same number of jobs post-coronavirus, their spending will also be curtailed. All of these contribute to lower revenues for business owners once the economy “starts back up”. I don’t think it will be a fast recovery. A lot of people will be financially hurt for a while. Owners will need some very thick skin and deep pockets to wait out for revenues to come back. Some may see impaired revenues for months longer, which probably isn’t enough to keep the business afloat.

theferalrobot 7y ago
> most Americans can’t afford an unexpected $400 expense This is just not true despite the fact that a few media sources twisted a statement from the reserve board a while back. Here is a fact that may help provide some context: The median net worth of a us household is $97,300.
- cpursley 7y ago
  You can't pay your light bill or insurance deductible with your net worth
  - 7y ago

save_ferris 7y ago

I think the major miscalculation you’re making here is that business will magically return to these places as soon as things open back up. People are not going to patronize restaurants and bars as long as the risk of infection remains high. If half of people stay home due to Covid and the other half don’t care, most businesses won’t be able to sustain. A quick recovery is completely dependent on full economic participation, particularly by those lucky enough to still have jobs. The US still has no scalable testing system, despite being promised one over a month ago, and we still don’t yet know if Covid can reinfect people. Opening back up without testing puts small businesses at risk by asking them to start spending money to open back up with no guarantee business will come back. If that happens, the government will have more people to bail out.

cpursley 7y ago
> People are not going to patronize restaurants and bars as long as the risk of infection remains high. It's not even that. People's spending habits have and will change drastically (those who still have incomes). And those who were put out of work will be playing financial catch-up once they obtain new employment and are very unlikely to patronize bars, etc at the same rates they used to. We also have to consider that people who do keep their jobs already are or will likely be supporting family members and friends in need with their excess cash for a while (the cash they would typically spend at the bar, etc). Additionally, those with jobs who can are going to continue saving their money at higher rates than before (which is currently happening despite the risk of inflation and/or low negative interest rates). At least, this is how I've changed my habits.
- save_ferris 7y ago
  I agree with this too, I'm definitely in the still-employed-but-spending-has-changed camp as well. We're completely ignoring the higher order effects of what the pandemic is doing and I think we do so at our own peril.
JoeAltmaier 7y ago
Our governor talks of opening restaurants with fewer tables. That's pretty much a no-go, they rely on filling all the tables and then its thin margins. Running half a restaurant with full overhead? Nope.

baron_harkonnen 7y ago

I'm genuinely confused how anyone in tech can honestly believe that this is only effecting hourly workers. That was certainly true for the first week but if my linkedin is any indicator last week was a blood bath for many startups. I can easily name 5 companies in my area that had greater than 20% layoffs just last week. Google is already making the call to slow down hiring. Each week from here on out we are going to continue to see this impact more and more people in more secure jobs become effected. This will remain true even as the pandemic eases up.

_bxg1 7y ago
Startups being the key word. There's much more to tech than startups, and the picture outside of them is significantly more mixed. Google has slowed, but Facebook has accelerated. Etc.
- Exmoor 7y ago
  Obviously things will differ greatly from industry to industry and company to company, but you're lying to yourself if you think this is going to end at startups. It takes a bit of time for dominoes to fall, but as the various factors such as consumer spending, B2B spending, supply-chain issues, etc. begin to ripple out the waves will effect more and more companies.
  - _bxg1 7y ago
    It has an effect on other businesses but it'll be far from a "blood bath"

wonderwonder 7y ago

I unfortunately disagree with this. Restaurants operate on thin margins. They are currently closed so all of the food, etc is likely waste. On top of that they are going to be months in arrears on rent and fees to their vendors. Many of those vendors are going to be months in arrears to their own employees, vendors etc. In order to open back up, pay rent / vendors and employees they are going to each need a large cash infusion. They cant just open, and hope that customers come back, if they do that they wont be able to pay the employees on payday. Many of them are likely done for good. Not to say other things wont replace them. Regarding most of these people being hourly, I think that is not correct. Lots are but there are tons of startups, unicorns and publicly traded companies laying off 20+ % of their employees. Travel companies are slashing their backend salaried work force. Many of these companies are going to learn they can operate painfully but still operate with a greatly reduced workforce, boosting the bottom line and increasing share holder value. The remaining employees will be tasked to do work previously done by several employees and will not receive additional compensation for it. On top of that, until we have a vaccine, many people are simply not going to go out and spend money in public. I appreciate your optimism though and very much hope you are right. I could be completely wrong though, stock market seems to think I am. Every 5 million people laid off is a 5% rally on the S&P. Personal opinion: We have tilted business too far towards 'share holder value' and C-suite compensation and away from treating employees like real people with lives. The cycle will continue until this changes. We are berating individuals for not having savings but giving these massive corporations a pass and massive bailout. I think we need to fundamentally change what it means to be a publicly traded company in this country. Opinion note 2: A monthly efficient, meaningful and importantly, universal government injection of cash into households for the next several months could spur a massive recovery and is likely the best solution.

_curious_ 7y ago
"I think we need to fundamentally change what it means to be a publicly traded company in this country." What would you change?
- wonderwonder 7y ago
  Require a % of stocks be distributed to employees. Allow them to vote as a shareholder block. Limit C-suite pay to a multiple of employee pay. Eliminate golden parachutes. Tie C-Suite compensation to some metric measuring employee quality of life.

jhowell 7y ago

The impact changes in consumer behavior will have on business models that employ hourly wage earners is unknown and difficult to model especially in the absence of a vaccine. The value in sharing a car ride to go out for the evening, attending a concert or sporting event, or living in large, (formerly) convenient, densely populated areas is being reevaluated by consumers no matter how much money the federal reserve puts into circulation to bolster these potentially antiquated practices. The thought of dying, being intubated or having long term respiratory problems that elevate your risk for future medical complications is part of the calculation now. The upside I see is the amount of money people who are working are saving now that there is much less to consume, though this changes behavior as well.

nickthemagicman 7y ago

I like your idealism and hope you're right but have a feeling we've quarantined ourselves AND our economy. When things open back up again it's going to be brutal. Children begging in the streets brutal.

_curious_ 7y ago

"it's worth considering that most of these people are probably hourly wage earners" I'll consider your unpopular opinion because it's healthy to think about a range of scenarios...though curious to know why your optimism operates on this premise?

brenden2 7y ago
It's usually easy to hire/train hourly employees because they are less specialized. Hiring someone to wait tables is much easier than hiring a software engineer.

ta1234567890 7y ago

> The businesses themselves (restaurants, retail, etc) haven't gone anywhere, they're just not operating. Yes there will be some bankruptcies, but those companies will restructure, assets will be sold, and something else will pop up in place. I personally know of dozens of small businesses that have closed for good. You can also go on Reddit and check the small businesses subs for a reality check. Small business owners and employees are hurting really bad and government aid has pretty much failed them. It also seems you are thinking of small businesses as if they were large corporations that can file for chapter 11 and simply restructure. Small businesses and their owners cannot afford that, they usually close down out of court or file for chapter 7, which implies a total shut down and liquidation of their business at a loss. The business owners will be ruined and most likely won't be able to start a new business for years, if ever. And in these uncertain times, it's very doubtful anyone will want to take their place for a while. Honestly it seems to me you are so far removed from these people, businesses and their actual lives, that you are out of touch with reality. I find your lack of empathy appalling.

JamesBarney 7y ago

This supply side argument could also be made for the great recession and great depression. But obviously those still happened. Historically when lots of companies file for bankruptcy and large swathes of the work force are laid off we enter a recession/depression. And they've all been stickier than your comment suggests.

whatok 7y ago

A lot of this is timing on reopening and how consumers are doing. If you just naively assumed a 1:1 fire to rehire ratio on some time window, there's still an extreme amount of friction involved in rebalancing that to previous levels. Spending is not going to magically bounce back to normal as anyone who had their mortgage or rent frozen is going to have to pay that back in a few months. Or just pay down credit card debt that they racked up. There's a lot of good data out there showing that savings rates (that has a massive effect on consumer spending) go way up during recessions/depressions and I wouldn't expect that to be any different. I also wouldn't assume that there won't be further layoffs later in the year that hit salaried workers. Airlines are almost certainly going to do massive layoffs as soon as their federal programs expire in October and a huge portion of those people are going to be competing for hourly jobs. Then think about how many people are going to get laid off after their employer starts monitoring VPN traffic and fully realizes that a good 20-30% of their workforce does nothing all day.