Quote (Goomshill @ 17 May 2020 12:13)
Its becoming increasingly clear that as the buck gets pushed around, its landing on small business owners, and especially restaurant owners who are going down faster than nursing home patients in NYC
Put yourself in the shoes of a business owner right now. Those that stay open for carryout / curbside are reporting about 15-50% of their usual revenue, but their normal average profit margins were 5%. Their operating costs don't go down 85% when they lose 85% of sales, you've got property taxes, mortgages, electric, water, etc. Even shutting down temporarily and unplugging freezers there's a restaurant here that had their monthly electric bill drop from $4000 to $2500. You've still got to pay salaries of employees if you want to keep them, otherwise its closing up and laying off everyone. And those that have been furloughed? Even if you re-open and want to bring them back, unemployment paying an extra $600 means that they'll earn more money by staying home watching youtube videos than flipping burgers. The federal government has completely removed the incentive to work. You can't possibly raise wages enough to make that attractive. And on top of that, states are burying restaurants that re-open with regulations for safety, and all the costs of sanitizing stations, disposable menus, PPE- you're paying that. And between extremely low table limits (5 per store in some places) and the publics unwillingness to eat out, even if you re-open there's no way you'll recapture more than 50-75% of previous revenue at best, probably much less. There are restaurant owners up here who are trying to risk re-opening before the governor allows it, putting huge amounts of protection in place like hospital grade foggers and temperature checks at the door and every other measure you can think of- and they're having to crowdfund legal fees as the attorney general threatens them with a $25,000 fine per location.
What are these business owners supposed to do other than march on their state capitols with AR-15s?
Quote (Goomshill @ 17 May 2020 13:44)
well I think we could shuffle around how the impacts are being absorbed across different fields
giving $1200 stimulus checks and $600 bonus to unemployment was not a solution and if anything is actually making the problem worse now. Give people money they can't spend and disincentive working and drive up labor costs? Its a huge problem when unemployment pays more than jobs.
the next round of economic stimulus should be aimed specifically at industries that have been hard hit, giving them capital to restart and incentives to rehire. Ease the burdens and subsidize it up the chain of labor, utilities, mortgages, property taxes, etc at local/state/federal levels. If businesses are going to be told that in order to re-open they have to provide PPE and sanitizing equipment, maybe those are costs that should be shared
You raise good points. I don't really agree with government bailouts in principle, but in this case, you're right, governments are telling these small businesses they cannot operate. I don't really agree with it. The small business assistance from the federal government is nice, but it's not enough.
Personally, I think the shutdowns should end. Anecdotally, people around my parts aren't even social/physical distancing anymore. It's just an extended vacation that is tanking local economies and only mildly reducing community spread of the virus.
Young and middle-aged Americans taking another hit for old people. The Boomers win again.