6 ms·

It's going to be a bit weird because a lot of those should come back because the underlying business didn't suddenly become nonviable.

by rtkwe 6y ago

rosywoozlechan 6y ago
> the underlying business didn't suddenly become nonviable They may have. We don't know when or if things will go back to the way they were before March 2020 and how consumer and employer behavior will change. For example, maybe movie theaters are completely screwed. Except as a novelty, the big business chains may not survive. Universal Studios is already pushing back on theater release windows and no live-action movies are being filmed right now, and who knows for how long that lasts. Will the public feel safe enough to go back into theaters all at once before theaters run out of money as if nothing happened? I imagine some of those jobs at least are permanently gone. Employers will probably maintain work from home and cut back on office space. All those jobs that support maintaining offices may not come back either. I don't think the restaurant business will jump back either, people can't just restart their failed restaurant as if they didn't lose all that money they needed to keep their already slim margin business open before the pandemic.
- mikeyouse 6y ago
  Right - we saw a lot of businesses lose 80+% of their customers before any shelter in place orders were mandated. In low margin places like bars and restaurants, it's highly unlikely many can survive with even 75% of their normal level of business.
  - marvin 6y ago
    That just means prices will go up. Nothing is certain, of course, but those prices are low mostly because of high competition, not because people are unable to pay. There will certainly be a bit of both, but it's not like you won't be able to find a restaurant after the pandemic.
    - stevenwliao 6y ago
      Some businesses' fixed costs mean raising prices won't prevent bankruptcy. Restaurants will remain available, but will movie theaters? They were already being disrupted by streaming services.
- zelly 6y ago
  > Employers will probably maintain work from home and cut back on office space. All those jobs that support maintaining offices may not come back either. I think there will be a greater demand for office real estate because suddenly everyone needs double the space and (spacious) cubicles or standalone offices will make a comeback. That is, unless every company goes full remote.
  - ghaff 6y ago
    You maintain a location with a handful of dedicated offices together with hoteling and conference rooms for people to come in a day per week or so.
- deleted 6y ago
  [deleted]
- icedchai 6y ago
  It will be a long and slow ramp. I don't expect to sit inside a restaurant or go to the movies for the rest of this year, possibly most of 2021. Theaters were on the way out before any of this started. Movie ticket sales have been declining for years. That trend will only get worse.
  - aaronax 6y ago
    This makes me ponder how fortunate I am (or dumb I am) to have eaten in a restaurant twice in the past week.
    - icedchai 6y ago
      It depends where you are, really. I'm in the hot zone here (northeastern US...)
- chii 6y ago
  > Will the public feel safe enough to go back into theaters all at once before theaters run out of money as if nothing happened? the need for theatres and cinemas have not disappeared. They will come back once the virus situation is under control (in say 2-4 yrs time, when vaccine is available). Therefore, the jobs will come back in 2-4 yrs time. The companies will have been different - the old incumbents will have bankrupted by then. But that doesn't matter - as long as there is new investment, new companies will spring up to soak up the demand. Same with office spaces. It's not like the need for office space will disappear indefinitely.
  - carlmr 6y ago
    >Same with office spaces. It's not like the need for office space will disappear indefinitely. There is an arguable difference here, a lot of people were willing to WFH before the crisis, but most businesses didn't allow it. A crisis like this, forcing businesses to accept WFH, has the side benefit of doing a large experiment where business owners see whether WFH works for them, maybe even has good sides to it, but also what's negative about it. Before, many employers were just apprehensive and would only think about this in theory. Many now see in practice what they were afraid about, and maybe they're not as afraid anymore. So maybe office space will rebound, but maybe not. I'm quite sure in my city most office jobs are doable from home, however for meetings we might get back to some balanced level of WFH + office work. But it may never rebound to pre-crisis levels.
- eanzenberg 6y ago
  Things are going back to how things were in March 2020 very quickly [1] [2] As an aside, I’ve stopped being surprised with how out of touch and in a bubble HN posts are. There’s so much understanding of human nature out there that is missing here. 1. https://www.forbes.com/sites/alexandrasternlicht/2020/05/14/wisconsin-bars-packed-after-state-supreme-court-lifts-stay-at-home-orders/amp/ https://www.forbes.com/sites/alexandrasternlicht/2020/05/14/... 2. https://nypost.com/2020/05/09/carnival-swamped-with-bookings-after-announcing-august-return/?utm_source=reddit.com https://nypost.com/2020/05/09/carnival-swamped-with-bookings...
  - dkdk8283 6y ago
    > I’ve stopped being surprised with how out of touch and in a bubble HN posts are. I step away from the site every few days to help stay centered. I hope things return to normal as quickly as possible, our economy depends on it. Very few people can afford to weather this without a strong economy. In the US when you lose your job you lose your healthcare too. Healthcare can’t be fixed in a hurry but we can all agree to be reasonable and keep as many people working as we can.
  - ericd 6y ago
    Have you watched Powell’s most recent remarks? He doesn’t seem to agree with your assessment.
    - eanzenberg 6y ago
      These types of people predict the worst so that they are never wrong on the downside. That’s why the initial death projection was 2m people. Imagine if they instead predicted 1000 deaths. Same stuff happens with global warming preds. You’re getting the worst case, x100, every time.
      - ericd 6y ago
        Who are "these types of people"? Fed Chairmen are usually pretty level-headed. Do you have an academic source for the global warming claim?
- numpad0 6y ago
  Personally I'm not so sure if movie theaters are nonviable. Nerdy stuffs are generally safer.
dv_dt 6y ago
Looking at past economic studies, there is a long run hysteresis effect after depressions and while the jobs should come back it may be on a time frame of a decade or longer.
- dougmwne 6y ago
  My grandparents spending habits were permanently affected by growing up during the great depression. They talked about their frugality in the context of the depression often. It anchored their entire concept of money. My parents were deeply affected too and often talked about their own childhood and how they were taught to handle money. I feel like I was brought up with a vestige of that great depression mentality and often actively challenge myself to be less frugal. That's 90 years of long run hysteresis right there.
puranjay 6y ago
I doubt the consumer confidence will be the same. Not to mention that some people will be staying at home much longer.
- malandrew 6y ago
  And some people will cook more. For example, we have a lovely little neopolitan pizza joint a block away, but two days ago I received an Ooni Koda 16 and have discovered how easy it is to make my own neopolitan pizzas. That's basically a permanent reduction in my spending on pizza if/when it does reopen.
  - azinman2 6y ago
    My guess is when you're tired and just want dinner now-ish, you'll learn to value that nearby restaurant. It's not like restaurants are only viable because people don't know how to cook themselves.
    - dougmwne 6y ago
      You can quibble about a specific food, but I think the general point stands. Habits are powerful and they can change. Every adult in the country (world?) is now forcibly learning how to cook or practicing a few new recipes. It turns out that some of those recipes are delicious, dead simple and once you know how to do it, having someone else do it for you looses it's convenience factor. For myself: I love cappuccino and bought several per week from cafes near me. I was missing them, so did a bit of research into home espresso and bought a nespresso and semi-automatic milk frother. My homemade cappuccino is excellent. It takes 2 minutes to make with just about zero cleanup. I have had better cappuccino, but seriously the extra time, money and hassle are no longer worth it for me. I will make it at home. It's also 6x cheaper. I like to treat myself to steak every now and then, but only ever at a restaurant. I recently bought a package of strip steaks and did some trial and error on a George Foreman grill I found in the back of the cupboard I hadn't used in years. I figured out a process that works with that piece of equipment, and now I can knock out an amazing steak in exactly 4 minutes. It's cooked exactly how I like it. Why bother with the hassle and expense of going out for one? Plus it's 4x cheaper. I doubt I'll completely stop going out or getting delivery, but if I reduce by 10% and everybody else does too, we're talking a lot of businesses that will close.
asdff 6y ago
The demand is there, say for food, but the capital has evaporated and the restaurant no longer exists. To start a new one you would need investors to pay for up front costs, labor, food, and commercial rent, and who is feeling bullish enough to start a business notorious for it's razor thin margins at the start of a recession?
- mikepurvis 6y ago
  This kind of thing is why it's so confusing to me that more commercial landlords haven't been willing to play ball with their tenants on rent breaks through this crisis. Like, what do you have to gain by throwing out a restaurant or other business that is ready to start right back up the moment the lockdown lifts, vs sitting on an empty unit for months and months while the economy remains in turmoil, getting nothing from it. I guess it's maybe a play for some deep-pocketed franchise operator to grab it on spec? Seems risky.
  - nostrademons 6y ago
    I read somewhere on HN that commercial real estate is financed differently from residential real estate, and in particular, financing costs are related to what a building could earn rather than what a building does earn. If you keep rents the same but have vacancies, your funders apparently don't count that against you, while if reduce rents, suddenly the earning potential of your building has dropped and it will cost you, even if the building is actually earning more in cash flow than if it were vacant. Seems like a bit of a misincentive here, and a recipe for lenders to go bust too. Then again, it seems like commercial real estate has periodic financial crises, so this seems to reflect reality. Get ready for the next one.
    - momokoko 6y ago
      This is 100% true and this actually does affect residential as well. Many real estate investors make more money from the appreciation of the asset as opposed to current rents. Reducing rent reduces the value of the property on paper because the projected earnings over time decrease.
nabla9 6y ago
Jobs may come slowly back, but fraction of people and families will be permanently damaged in the process. People are not like rubber bands that return to where they were. The effects can be generational when families have children.
- rtkwe 6y ago
  I get that and am personally for way more support than the paltry 1200 ea that has been sent out so far. I'm just saying the loss of jobs here was artificial where every other depress/recession it's come out of systemic reactions and problems. As this goes on longer it starts to act more like a normal one though I'll admit since businesses start to fold and go under based on their fixed costs meaning the jobs are actually lost.
MiroF 6y ago
Meet retail
empath75 6y ago
They may have. Movie theaters and night clubs for example.
dbuder 6y ago
They were already non viable.
newyankee 6y ago
People might very well use it as a reason to automate and layoff without the guilt that would have been stronger before Covid

It's going to be a bit weird because a lot of those should come back because the underlying business didn't suddenly become nonviable.

by rtkwe 6y ago

It's going to be a bit weird because a lot of those should come back because the underlying business didn't suddenly become nonviable.

rosywoozlechan 6y ago

> the underlying business didn't suddenly become nonviable They may have. We don't know when or if things will go back to the way they were before March 2020 and how consumer and employer behavior will change. For example, maybe movie theaters are completely screwed. Except as a novelty, the big business chains may not survive. Universal Studios is already pushing back on theater release windows and no live-action movies are being filmed right now, and who knows for how long that lasts. Will the public feel safe enough to go back into theaters all at once before theaters run out of money as if nothing happened? I imagine some of those jobs at least are permanently gone. Employers will probably maintain work from home and cut back on office space. All those jobs that support maintaining offices may not come back either. I don't think the restaurant business will jump back either, people can't just restart their failed restaurant as if they didn't lose all that money they needed to keep their already slim margin business open before the pandemic.

mikeyouse 6y ago
Right - we saw a lot of businesses lose 80+% of their customers before any shelter in place orders were mandated. In low margin places like bars and restaurants, it's highly unlikely many can survive with even 75% of their normal level of business.
- marvin 6y ago
  That just means prices will go up. Nothing is certain, of course, but those prices are low mostly because of high competition, not because people are unable to pay. There will certainly be a bit of both, but it's not like you won't be able to find a restaurant after the pandemic.
  - stevenwliao 6y ago
    Some businesses' fixed costs mean raising prices won't prevent bankruptcy. Restaurants will remain available, but will movie theaters? They were already being disrupted by streaming services.
zelly 6y ago
> Employers will probably maintain work from home and cut back on office space. All those jobs that support maintaining offices may not come back either. I think there will be a greater demand for office real estate because suddenly everyone needs double the space and (spacious) cubicles or standalone offices will make a comeback. That is, unless every company goes full remote.
- ghaff 6y ago
  You maintain a location with a handful of dedicated offices together with hoteling and conference rooms for people to come in a day per week or so.
deleted 6y ago
[deleted]
icedchai 6y ago
It will be a long and slow ramp. I don't expect to sit inside a restaurant or go to the movies for the rest of this year, possibly most of 2021. Theaters were on the way out before any of this started. Movie ticket sales have been declining for years. That trend will only get worse.
- aaronax 6y ago
  This makes me ponder how fortunate I am (or dumb I am) to have eaten in a restaurant twice in the past week.
  - icedchai 6y ago
    It depends where you are, really. I'm in the hot zone here (northeastern US...)
chii 6y ago
> Will the public feel safe enough to go back into theaters all at once before theaters run out of money as if nothing happened? the need for theatres and cinemas have not disappeared. They will come back once the virus situation is under control (in say 2-4 yrs time, when vaccine is available). Therefore, the jobs will come back in 2-4 yrs time. The companies will have been different - the old incumbents will have bankrupted by then. But that doesn't matter - as long as there is new investment, new companies will spring up to soak up the demand. Same with office spaces. It's not like the need for office space will disappear indefinitely.
- carlmr 6y ago
  >Same with office spaces. It's not like the need for office space will disappear indefinitely. There is an arguable difference here, a lot of people were willing to WFH before the crisis, but most businesses didn't allow it. A crisis like this, forcing businesses to accept WFH, has the side benefit of doing a large experiment where business owners see whether WFH works for them, maybe even has good sides to it, but also what's negative about it. Before, many employers were just apprehensive and would only think about this in theory. Many now see in practice what they were afraid about, and maybe they're not as afraid anymore. So maybe office space will rebound, but maybe not. I'm quite sure in my city most office jobs are doable from home, however for meetings we might get back to some balanced level of WFH + office work. But it may never rebound to pre-crisis levels.
eanzenberg 6y ago
Things are going back to how things were in March 2020 very quickly [1] [2] As an aside, I’ve stopped being surprised with how out of touch and in a bubble HN posts are. There’s so much understanding of human nature out there that is missing here. 1. https://www.forbes.com/sites/alexandrasternlicht/2020/05/14/wisconsin-bars-packed-after-state-supreme-court-lifts-stay-at-home-orders/amp/ https://www.forbes.com/sites/alexandrasternlicht/2020/05/14/... 2. https://nypost.com/2020/05/09/carnival-swamped-with-bookings-after-announcing-august-return/?utm_source=reddit.com https://nypost.com/2020/05/09/carnival-swamped-with-bookings...
- dkdk8283 6y ago
  > I’ve stopped being surprised with how out of touch and in a bubble HN posts are. I step away from the site every few days to help stay centered. I hope things return to normal as quickly as possible, our economy depends on it. Very few people can afford to weather this without a strong economy. In the US when you lose your job you lose your healthcare too. Healthcare can’t be fixed in a hurry but we can all agree to be reasonable and keep as many people working as we can.
- ericd 6y ago
  Have you watched Powell’s most recent remarks? He doesn’t seem to agree with your assessment.
  - eanzenberg 6y ago
    These types of people predict the worst so that they are never wrong on the downside. That’s why the initial death projection was 2m people. Imagine if they instead predicted 1000 deaths. Same stuff happens with global warming preds. You’re getting the worst case, x100, every time.
    - ericd 6y ago
      Who are "these types of people"? Fed Chairmen are usually pretty level-headed. Do you have an academic source for the global warming claim?
numpad0 6y ago
Personally I'm not so sure if movie theaters are nonviable. Nerdy stuffs are generally safer.

dv_dt 6y ago

Looking at past economic studies, there is a long run hysteresis effect after depressions and while the jobs should come back it may be on a time frame of a decade or longer.

dougmwne 6y ago
My grandparents spending habits were permanently affected by growing up during the great depression. They talked about their frugality in the context of the depression often. It anchored their entire concept of money. My parents were deeply affected too and often talked about their own childhood and how they were taught to handle money. I feel like I was brought up with a vestige of that great depression mentality and often actively challenge myself to be less frugal. That's 90 years of long run hysteresis right there.

puranjay 6y ago

I doubt the consumer confidence will be the same. Not to mention that some people will be staying at home much longer.

malandrew 6y ago
And some people will cook more. For example, we have a lovely little neopolitan pizza joint a block away, but two days ago I received an Ooni Koda 16 and have discovered how easy it is to make my own neopolitan pizzas. That's basically a permanent reduction in my spending on pizza if/when it does reopen.
- azinman2 6y ago
  My guess is when you're tired and just want dinner now-ish, you'll learn to value that nearby restaurant. It's not like restaurants are only viable because people don't know how to cook themselves.
  - dougmwne 6y ago
    You can quibble about a specific food, but I think the general point stands. Habits are powerful and they can change. Every adult in the country (world?) is now forcibly learning how to cook or practicing a few new recipes. It turns out that some of those recipes are delicious, dead simple and once you know how to do it, having someone else do it for you looses it's convenience factor. For myself: I love cappuccino and bought several per week from cafes near me. I was missing them, so did a bit of research into home espresso and bought a nespresso and semi-automatic milk frother. My homemade cappuccino is excellent. It takes 2 minutes to make with just about zero cleanup. I have had better cappuccino, but seriously the extra time, money and hassle are no longer worth it for me. I will make it at home. It's also 6x cheaper. I like to treat myself to steak every now and then, but only ever at a restaurant. I recently bought a package of strip steaks and did some trial and error on a George Foreman grill I found in the back of the cupboard I hadn't used in years. I figured out a process that works with that piece of equipment, and now I can knock out an amazing steak in exactly 4 minutes. It's cooked exactly how I like it. Why bother with the hassle and expense of going out for one? Plus it's 4x cheaper. I doubt I'll completely stop going out or getting delivery, but if I reduce by 10% and everybody else does too, we're talking a lot of businesses that will close.

asdff 6y ago

The demand is there, say for food, but the capital has evaporated and the restaurant no longer exists. To start a new one you would need investors to pay for up front costs, labor, food, and commercial rent, and who is feeling bullish enough to start a business notorious for it's razor thin margins at the start of a recession?

mikepurvis 6y ago
This kind of thing is why it's so confusing to me that more commercial landlords haven't been willing to play ball with their tenants on rent breaks through this crisis. Like, what do you have to gain by throwing out a restaurant or other business that is ready to start right back up the moment the lockdown lifts, vs sitting on an empty unit for months and months while the economy remains in turmoil, getting nothing from it. I guess it's maybe a play for some deep-pocketed franchise operator to grab it on spec? Seems risky.
- nostrademons 6y ago
  I read somewhere on HN that commercial real estate is financed differently from residential real estate, and in particular, financing costs are related to what a building could earn rather than what a building does earn. If you keep rents the same but have vacancies, your funders apparently don't count that against you, while if reduce rents, suddenly the earning potential of your building has dropped and it will cost you, even if the building is actually earning more in cash flow than if it were vacant. Seems like a bit of a misincentive here, and a recipe for lenders to go bust too. Then again, it seems like commercial real estate has periodic financial crises, so this seems to reflect reality. Get ready for the next one.
  - momokoko 6y ago
    This is 100% true and this actually does affect residential as well. Many real estate investors make more money from the appreciation of the asset as opposed to current rents. Reducing rent reduces the value of the property on paper because the projected earnings over time decrease.

nabla9 6y ago

Jobs may come slowly back, but fraction of people and families will be permanently damaged in the process. People are not like rubber bands that return to where they were. The effects can be generational when families have children.

rtkwe 6y ago
I get that and am personally for way more support than the paltry 1200 ea that has been sent out so far. I'm just saying the loss of jobs here was artificial where every other depress/recession it's come out of systemic reactions and problems. As this goes on longer it starts to act more like a normal one though I'll admit since businesses start to fold and go under based on their fixed costs meaning the jobs are actually lost.

MiroF 6y ago

Meet retail

empath75 6y ago

They may have. Movie theaters and night clubs for example.

dbuder 6y ago

They were already non viable.

newyankee 6y ago

People might very well use it as a reason to automate and layoff without the guilt that would have been stronger before Covid