California’s economy doesn’t need a quick reopening. It needs a deliberate, healthy and successful one.
It’s easy to understand why many folks are anxious to get back on the road to whatever the new normal will bring the business climate. At least 1 in 5 California workers lost their jobs due to business limitations designed to limit the spread of the killer coronavirus.
Lives vs. livelihoods is a debate with few easy answers. I know many folks have bills to pay. Or they’re owed money by somebody out of a job. Or their business or entire industry — like mine — is hanging on by a thread. I see the passion of the protestors.
But I also know there’s a largely silent majority who speak volumes with their compliance to “stay at home” orders. Many of these people also face financial distress and personal sacrifice but view business limitations as needed pandemic mitigation.
Look, we’re talking a deadly, contagious disease. So far, thanks in large part to an early call to “stay at home” from Gov. Gavin Newsom, coronavirus has sickened and killed far fewer than originally projected.
Plus, the state is slowly reopening with modest first steps. Opinion surveys suggest most Californians seem to be in no rush: 75% of 1,015 adults polled in mid-April said they’d prefer “shelter in place as long as it is needed” vs. “stop sheltering to stimulate the economy,” according to the California Health Care Foundation.
A newer survey from Reform California, a group that’s no fan of the state’s handling of the crisis, shows only 41% of 1,265 Californians surveyed think the state “flattened the curve enough that it can now safely reopen now.”
Considering the leaning of these folks who paid for the poll, that’s not much support for a fast return to the business-as-usual.
Now Reform California’s results from May 1-2 polling expose deep tensions over continued business limitations. Opinions vary by geography — from only 28% who say “reopen now” in San Francisco (hard hit by the virus) to 50% in the Southern California region outside of Los Angeles (with far less medical impact). And, no surprise, there’s political variations, too — only 21% of Democrats say “reopen now” to 41% of independents to 70% of Republicans.
My view is that forcing a large-scale reopening when emotions aren’t solidly behind the move — no less, medical science — won’t do anything to restore consumer confidence. And without widespread buy-in, it’s a reopening destined to flop, economically speaking.
Dollars vote
What day, what pace, or under what conditions California’s economy “reopens” isn’t the critical puzzle piece to the financial future.
No, the key deciding force will the public at large. When will they feel comfortable enough to go back to performing at work and spending at local stores as they did before the pandemic?
The consumer will vote with their dollars. Two recent surveys of California shoppers, from the Conference Board and Chapman-CMC, show soaring pessimism since the pandemic arrived.
Getting paychecks may help to reverse that trend. But more cash in more wallets alone won’t bring public psyche anywhere near to the upbeat feel of the good ol’ days. You know, early 2020.
Proponents of a quick reopening say high-risk folks can self-quarantine. Meanwhile, others get to return to work with proper protections and social distancing, especially in parts of California with low infection rates to date.
Few will argue with these concepts as the logical next steps. Anti-shutdown protests and crowds seen at the rare restaurant reopening showed us unmasked people in crowded settings using no medical common sense. That instills doubts that mandated precautions will be strictly maintained.
When pondering the economic power of any reopening, remember, the self-quarantine group is far bigger than you’d think. It includes many loved ones of the elderly and the medically weak. And what of folks who are supposed to be helping to educate their kids at home?
If that large group — and folks who support their cause — are uncomfortable with the level of renewed business and congestion, it’s a good bet they’ll be distantly participating in the economy. Their “protest” will be quiet. They’ll eat at home. Shop online. Vacation differently. Stay away from public events.
I know many business owners want a shot at even a small slice of their old cash flow vs. none in this “stay at home” era. But a meager business recovery due to reluctance from this unsure majority will be unsatisfying. And it could be disastrous for people betting on a sharp rebound.
Second wave
Rush a reopening, or mismanage it, and we could have a second wave of the disease. And the second wave may happen, anyway.
Scary thought knowing we are on an extremely uncharted path. Imagine the harsh societal — and business — questions that such a scenario brings. I cannot imagine a sadder outcome, and forget dollars and cents. What of lost lives in what’s essentially a mistimed bet that deaths won’t soar?
In this worst-case scenario, consumer confidence will be shattered. Nobody will believe in leadership, both political and business. And maybe even worse: Who’ll listen to the medical profession, seen as guilty of leading the decision-makers astray?
Plus, does anybody know how to do a second shutdown? Is there enough political will, or discipline, to pull it off? And if we get there — a situation I’d wish on nobody — how do we reopen for the second time?
The large majority of Californians may not be thinking that far out. But they discretely want a cautious approach like the plans suggested by the governor.
Just look at that poll from Reform California, harsh critics of Newsom. It gives him a 64% approval rating on the job he’s done handling the pandemic response.
