Updated: Jul 23, 2020
The first thing anyone looks at when concerned with the economy is the stock market. If you look at the stock markets in the United States today, well… You can see that they’ve taken a huge dive. It’s true that the markets have begun to recover, but we’re still nowhere as close as to where we were before. Just take a look at the Dow Jones Industrial Average for the first quarter of 2020 if you don’t believe me. But it’s also much more than just stock markets. Due to the stoppage in air travel and cross border transportation, the global supply chain has been disrupted. As of March 21st, at least three million Americans have filed for unemployment benefits.
The majority of businesses in the US are small business. And most of them are service driven. These account for the employment of around half the labor force in the United States. Most of these businesses operate by serving a specialized client list which they’ve grown over the years. They are highly dependent on returning customers and cannot afford month long disruptions. The uncertainty of the situation is also preventing newer businesses from joining the market as they no longer know whether they will be able to find the money they require to remain operational. This is inhibiting the start-up ecosystem in many cities across the United States.
The Economic Policy institute predicts that the pandemic could affect three million jobs in the economy directly before the summer begins. A Goldman Sachs survey also concluded that out of 1500 small business owners surveyed, more than half of them wouldn’t be able to operate for longer than three months.
Some states have already begun introducing guidelines that limit non-essential businesses from being open, with essential businesses being supermarkets and pharmacies. In states where this is not the case, many businesses have either decided to reduce their hours to a minimum or close entirely to prevent exposure to employees.
While locals try to support neighborhood businesses by buying items and having them delivered, or buying takeout from restaurants, there is a massive disruption taking place. Cinemas have closed down, larger businesses have stopped their affiliate programs, and some companies have suspended deliveries until SOPs are implemented properly. Restaurants have stopped allowing customers to dine in, and try to make up for the loss in customers by offering delivery or takeout services. However, this does not prevent much as the National Restaurant Association is already predicting that over the next three months the industry may lose up to seven million jobs, as well as 225 billion dollars in revenue.
The hospitality and travel businesses have been hit the hardest, with many airlines scraping their fleets or shutting down altogether. Hotels struggle to pay wages and remain open as they lose customers. But with all this going on, people are quickly learning to adapt. Businesses have started adopting the “No mask, no service” policy in an effort to combat potential spreading of the virus. Other businesses have embraced remote working techniques and are managing most of their operations as employees work from home. Some hybrid techniques are being used, with businesses running employees in shifts rather than having them all work at the same time. Mandatory health screening and increased awareness of sanitation in a workspace environment.