Across the country, the economy has slumped in the onslaught of the novel coronavirus. Industries in virtually all sectors are in danger, as are their employees, the dollars they earn and the businesses their spending supports.
It’s as true in Western New York as anywhere else. Sports and entertainment venues have shut down, schools have closed their doors, shopping malls are empty, restaurants are limited to takeout and residents – those who are paying attention, anyway – spend most of their time staying safe in their houses – and not spending money. It’s a broad, necessary assault on Covid-19, but the economy is critical collateral damage.
And in every community, the sudden weakness in key industries poses special risks. In Western New York, home to Niagara Falls, one of those industries is tourism. Hotels, restaurants, a variety of attractions and all of their suppliers are suddenly at risk. A report by CNBC estimated that just in the United States, the coronavirus could cost the industry $24 billion. Another report called it tourism’s biggest threat since World War II.
Niagara Falls may be at the biggest risk in Western New York, but it’s not alone. Buffalo will feel the pinch, too. With the development of Canalside and the Outer Harbor, the restoration of the Martin House Complex and the Richardson Olmsted Campus, Buffalo has a bigger stake in tourism than it did a decade ago.
Jamestown is home to the still-new National Comedy Center, now closed because of Covid-19. Letchworth State Park draws visitors from around the country.
The impact of this coronavirus is devastating in hundreds of ways, but tourism undergirds sizeable parts of the regional economy and especially around Niagara Falls, one of the most recognizable names in international travel.
It has also dealt a blow to Delaware North, a global name in the hospitality industry, based in Buffalo. The company announced on Wednesday that it is putting more than two-thirds of its 3,100 full-time workers on leave because of the disruption caused by the Covid-19 outbreak. They will receive just one week of pay and eight weeks of benefits, effective April 1. Full-time workers who remain on the job will do so at reduced pay.
That’s serious and it underscores the need for dramatic action to buttress the sagging economy. Washington has begun that work, but more may well be necessary and it will probably need to be drastic.
The question is, how drastic does that effort need to be? What we do – or don’t do – now, will have consequences for the future. It would be dangerous to overdo it but potentially disastrous to do too little in the face of an economic shutdown such as we have never seen.
Among the ideas worth examining is one by Andrew Ross Sorkin, founder and editor-at-large of DealBook and author of “Too Big to Fail.” In a recent New York Times piece, he proposed what he called a “thought experiment.” Instead of limiting itself to the usual prescriptions for a recession – and one is surely in the offing – he suggested that the government should offer no-interest loans to every American business and every self-employed worker, including gig workers.
These “bridge loans” would be guaranteed for the duration of the crisis and would be paid back over a five-year period. The only condition to businesses would be that they continue to employ at least 90% of their workforce at the same wage as before the crisis. Bolstered by the nation’s current, historically low interest rates, it would seem to fit the contours of the emergency. It would certainly count as drastic.
There may be other, better ideas, but Americans are keeping a social distance for a reason. We need to see this through to a safe end and we need to handle it in as bold a way as the dire conditions require. We an economy to which we return.
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