Romer: Cost of inaction impacts recovery
Depending on where you sit in the COVID-19 economy, business could be booming or on the brink of bankruptcy. The pandemic’s uneven economic impact on industries and workers has been stark.
Long gone is the notion that we’ll have a V-Shaped Recovery — a deep economic decline followed quickly by sharp rebound. Instead, what we’re looking at is a recovery that will be vigorous for some sectors while others remain in freefall. Enter the K-Shaped Recovery, where the economy recuperates unevenly, and there’s a separate trajectory for two segments of the society.
This is true across the country as evidenced by the research put together on a regular basis by the US Chamber of Commerce which shows the negative impacts on industries including restaurants, retailers, small business owners, and schools. It also resonates here in Eagle County as our businesses face uncertainty.
On the plus side, we should continue to see tech companies and some segments of the retail industry, for example, thrive as their products or services directly support work, education, health, or simply daily life in a pandemic.
Their ability to operate, adapt, and expand in this environment has kept people healthy, connected, and productive. They are supporting remote work, learning, and telemedicine and ensuring food, supplies, and medicine continue to flow into our homes. Their success has also kept the stock market hovering around all-time highs and is expected to drive the strongest growth rate on record in the third quarter.
Yet, the other side of the recovery remains bleak. For countless companies in the travel, entertainment, leisure, hospitality, and food service industries, there is no end in sight to the economic malaise. This sector makes up a large part of our local economy in Eagle County and presents challenges to our economic recovery planning efforts.
As long as necessary social distancing and public health restrictions are in place, it will be difficult if not impossible to get back to strength. Though many are doggedly working, innovating, and adapting to stay open, there is only so long businesses can survive on razor-thin margins with persistently diminished revenue. The uneven recovery is even cutting across some sectors, which explains why some retailers are setting records while others are facing liquidation.
The K-shaped recovery is also evident in employment numbers. The financial services sector, for example, has already recovered 94% of its pre-pandemic employment. Leisure and entertainment, on the other hand, has only brought back 74% of the workforce.
So, while many of us are lucky to mainly be Zoom-fatigued or otherwise harried by life in a pandemic, for millions of others, the economic impact of COVID-19 is existential. The layoffs have come hardest and fastest for those least able to survive prolonged joblessness, creating a cascade of setbacks from which it will be very hard to recover.
As a business community and a nation, we cannot allow millions of workers and broad swaths of our economy to be left behind in the COVID-19 recovery.
Our lawmakers deserve a lot of credit for working quickly and cooperatively, on a bipartisan basis, to provide federal relief to employers and workers in the early days of pandemic. Their historic efforts helped many businesses and families stay afloat and prevented the economic fallout from being even deeper.
Their work is not done. Vail Valley Partnership joins the US Chamber in calling on Congress to pass additional targeted and temporary measures to help those on the wrong side of the recovery.
Chris Romer is president and CEO of the Vail Valley Partnership, the regional chamber of commerce. Learn more at www.vailvalleypartnership.com.
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