Taking an Illustration into consideration made by Mark Wang which resonates with the story of a man namely Carlos Silva, working in Shoe Repair Store who categorically explains the vulnerability of the lockdown.
Usually a well packed and well crowded store is now empty he says, “There is no traffic, my friend. The whole station is dead,” says Silva. “Now it’s only a part-time job.”
These five months of lockdown have been tough forced millions to stay at home without work and also forced the lockdown of US businesses.
Economists have focussed much more on small business shop, bars, restaurants and chains of outlets but overlooked what we call “white-collar” workers. As the lockdown postponed the reopening of several companies in the US cities, resulted in the vacant skyscrapers and paralysed business ecosystem.
This haemodynamical unstability is directly affecting white-collar workers, on whom mega enterprises are reliant on.
People who are shopping from small businesses such as florists, Silva’s Shoe Repair Store, food carts etc. are also the most important customers of much larger business such as food companies such as Uber Eats, Starbucks etc. There are several white collar businesses such as Starbucks, earnings call in late July, Starbucks attributed the loss of some $2 billion.
Read series of Tweets by Editor of marker.medium.com
The office worker keeps airlines in the air, hotels buzzing, Xerox pumping out cartridges, 3M making Scotch tape, and apparel shops fitting business suits. They keep dry cleaners going, barbers cutting, and office cleaners cleaning. All of this has been deflated or cut. 3/5
— Steve LeVine (@stevelevine) September 1, 2020
Reasons are simple people are not much in line waiting for Starbucks coffee as compared to food carts and much simpler restaurants.
Which also includes Zoomification of business meetings, a cancellation of business travel, business travel accounting for 60% to 70% of all airline traffic etc. Many companies such as including JPMorgan Chase, Ford Motor, Twitter, and REI have announced work from home.
On Friday, Pinterest turned heads when it announced it would pay a $89.5 million contract penalty to cancel its lease on a flashy new 490,000-square-foot office building planned in San Francisco.
MIT Economists David Autor in a research paper indicated the work from home culture added And with that, tens of thousands of workers in the office support economy — those who “feed, transport, clothe, entertain, and shelter people when they are not in their own homes” — will lose their jobs.
The Wall Street Journal reported that “The implications for the office economy are stark. Office-dwelling road warriors — a primary profit center for the travel industry — are now homebound Zoomers, resulting in a bloodbath for airlines and hotels. Business travel in July was down 97% from a year earlier.”
Talking about eaters in the restaurants Goldman Sachs says that the number of seated diners across the country was down by 54% the week ending August 16 compared with the prior week. 1200 hotels are closed permanently. MIT’s Autor and Reynolds write, will bring “a decline of the economic centrality, and even the cultural vitality, of cities.”
According to the survey by the National League of Cities :
- 90% cities are expecting 13% decline in revenue next year.
- Houston had a 13% drop in sales tax in May, 17% in April, and 10% in March.
Well, Implosion of the office economy is not necessarily a black-and-white story of ruination.
The resilience of cities is a pillar of economic history.