The Other 99.947% Need to Get Back to Work, School and Life

In the age of Covid-19 and one of the most divided electorates in modern history, when statistics, facts and the mainstream media are distrusted at unprecedented levels, how does one determine what is and isn’t true?

Last week President Trump celebrated the 8.4% U.S. unemployment rate, which surprised even some of his most ardent critics. Keep in mind; in June the Federal Reserve predicted the unemployment rate would fall to 9.3% by the end of 2020. So it’s safe to say 8.4% by the end of August was well beyond expectations.

However, as many economists will agree, one measurement doesn’t tell the whole story. Hiring must be viewed in its totality, which means the kind of hiring that occurred.

As Bloomberg editor Joe Weisenthal wrote:

There was a brief pause in the permanent layoffs in July, but then in August they shot right back up again. This is what's concerning. Even with total employment accelerating much faster than economists had forecasted, the pace of permanent layoffs is happening faster than during the last crisis. Furthermore, we're already undergoing fiscal tightening, with the failure to extend the UI expansion and PPP, not to mention ongoing fiscal stress on towns, cities, and states. Beyond that, other headwinds may possibly emerge in the weeks and months ahead, as outdoor dining eases (due to weather), college towns suffer due to the lack of on-premise learning, and public school issues further disrupt economic activity to varying degrees around the country.

Small businesses, restaurants, retail, medical, commercial real estate, hospitality, travel and tourism have taken the brunt of the shutdowns by Governors and Mayors across the country. Even as the number of Covid-19 deaths plummets, many states, counties and cities are still in some form of restrictive lockdown that has delayed a return to economic and psychological normalcy.

The restaurant industry encapsulates the devastation. Industry groups predicted as many as 75-80 percent of independent restaurants would not survive closures of more than a few weeks. Restaurants are well known to have small profit margins, typically ranging from 3-7%.

Now restaurant owners must navigate the gradual return of customers over an indefinite period where 25, 50, 75 and eventually 100 percent capacity is granted by officials, most whom never once made a payroll. If a restaurateur is barely making 3-7 percent margins at 100 percent capacity, how long is survival at 50?

Another cautionary element to the faster than expected recovering employment numbers is that a full 25 percent of the hiring has been temporary government or public sector jobs. Government hiring helped boost the total, with the growth of 344,000 workers accounting for a quarter of the monthly gain. Most of that hiring came from Census workers, whose rolls increased by 328,000. Despite worries of a revenue crunch at the municipal level, local government employment rose by 95,000.

With stimulus legislation currently stalled in Congress, unemployment insurance and payment protection programs have run their course. As a consequence, we may see a large increase in the number of businesses that give up after they delayed closing their doors in the spring and summer.

Worse for businesses reliant on foot traffic related to office work, larger corporations are delaying the re-opening of their headquarters and other physical spaces. Social media platform Pinterest, one of the largest examples, just paid $89.5 million to cancel its lease for new San Francisco offices.

Other Bay Area tech giants, such as Apple, Facebook and Twitter, have said work-from-home policies will continue even after the coronavirus pandemic ends. The coming tsunami of empty commercial real estate properties will depress the markets further, and exasperate the already severe financial distress of local businesses that rely on the foot traffic of employees in cities and suburbs.

There is no magic bullet to solve these problems, but a good start would be to open the economy 100%. After six months of people wearing masks, social distancing and learning the new normal, people can manage risks for themselves and their families.

Furthermore, people have had enough of the double talk and constant mixed messages promulgated by politicians. They no longer believe unelected bureaucrats have the wisdom to determine which funerals can be attended, which massive protests can be celebrated while rallies are questioned, which large retailers are considered ‘essential’ while small businesses are forced to remain closed, and which private gyms, hair salons, etc. can be frequented by the very politicians who determine if you will go bankrupt.

Reasonable, non-political people once trusted the politicians, but patience has run out amid the ongoing economic carnage. All-too-many want to resume control back of their livelihoods.

So while the more vulnerable will still ideally take precautions if visiting stores, restaurants and businesses, business owners should have back the right to their businesses. And their employees should have the right to continue working free of government handouts.

The good news is that Covid-19 deaths have declined for at least four weeks. While it can sound heartless to reduce any issue to death counts, it’s important to consider the 180,000 who died with or because of the virus in terms of a population of 330 million. Let’s be responsible and remember that these numbers represent 0.053 percent of the population.

Let’s also consider all of the above in terms of the U.S.’s 32 million small businesses. How many of them have to go under in the fight against a virus that thankfully spares the vast majority of us? And with the rest of us in mind, let’s not forget the lost savings, the increase in domestic violence, and the rise in suicides that’s come in concert with the forced economic contractions.

The other 99.947% need to get back to work, school and life.