As we slowly crawl out of the stay-at-home orders and gradually bring the economy back, using the governor’s four-phase plan, we can begin to speculate about how our lives are going to be different. And speculation it is, since the future is uncertain. Let’s think about what we know:
- The lockdowns have been effective in places such as Washington State and New York, but only in terms of tamping down new outbreaks of Covid-19.
- The virus is still widespread in our communities and likely to flare up in places for a long time.
- We are nowhere near herd immunity.
- If someone gets the disease, there are therapies but no cure.
- There is no vaccine yet, although progress seems to be coming quickly.
So, what does this mean for going forward?
Work Spaces
There is a lot of talk about downsizing office space and allowing some people to work from home permanently. This may mean one or two days in the office or not at all. If not at all, then more jobs could be offshored. The use of technology has been accelerated; we’ve all become very familiar with Zoom and other remote solutions. And while people complain about Zoom fatigue, they aren’t complaining about their commute. This is going to create challenges related to managing people, creating and maintaining company culture, and lots of HR issues. Think about onboarding new employees. It is clear some jobs can be done this way and some people get more done from home.
Restaurants
I’ve read forecasts that 80 percent of all restaurants will go out of business. Always an industry with a high failure rate, not many restaurants are going to be able to weather this storm. Will every failed restaurant result in a new dreamer that wants to lease the space and try to make a go of it? Certainly, there will be many, but I think we’re going to have fewer restaurants permanently. But we’ll probably have branded-kitchens that do take-out/delivery only. And more storefronts that have warming ovens but no ability to really cook food onsite.
Retail
Department stores are dead or dying. The forecast is for 25,000 retail store closings with 60 percent of those closings in malls. As the malls lose their anchor tenants, the smaller tenants will fail due to the reduction on foot traffic. Meanwhile, we’ve all found that online shopping is pretty great. I’ve got Amazon, FedEx, UPS and the USPS on my street about 14 hours a day, seven days a week. A few mouse clicks and it ends up on my porch and credit card! Retail won’t go away, but it is going to be greatly diminished.
A couple of the local malls, Northgate and Totem Lake, were in the middle of conversions before Covid. Northgate’s plan is to be only 40 percent retail, four mid-rise residential towers, four office towers, at least one hotel and a 100,000 square foot park. Totem Lake has similar plans with high density and mixed-uses. America has too much retail space and this is the sort of development we can expect for these properties—if the owners can afford it.
Starbucks
I’ll treat Starbucks as a special case. They have really carved out a niche in the world. But even they are talking about closing 400 stores and focusing on drive-through. I think physical distancing and the cost of being the neighborhood hangout have made their traditional model awfully expensive. As a public company, they are also driven to increase quarterly profits relentlessly. That Wall Street pressure makes it hard to remain “the Third Place,” as Howard Schultz envisioned.
Big Events
Sporting events, concerts and other large gatherings seem to be on the horizon. Let’s think about a Seahawks game this fall. Western Washington may have few cases of Covid-19 but that’s not true of other places. Especially if cold weather brings on a seasonal flare up.
On December 13th, the Seahawks are scheduled to host the New York Jets. New York fans will arrive via airplanes, mix it up at Seattle restaurants and bars, and then join 60,000 others to scream for a few hours. Then the Seahawks fans will go back to their homes and workplaces the following week. If a little choir practice in Mount Vernon can be considered a super spreader event, what’s the potential of a Seahawks game?
I’ve already made my mind up that I will not attend any large events until I’m vaccinated, no matter how long that takes.
A Smaller Economy?
Even after a vaccine is available and widely distributed, it seems to me that many areas of the economy will be smaller than before Covid-19. What are we all going to do? Actually, this is a problem that has been coming for a long time. With increased productivity and automation, how are we all going to earn a living? So far, the answer has been the transition of America’s economy to services. Is there a limit to how much Americans will consume? It doesn’t seem so but it also seems that this isn’t sustainable. Still, I’m guessing that we will invent more goods and services that our fellow citizens can’t live without.
The scariest thing to me is that it appears the rich are getting richer; the poor are getting poorer and the middle class is getting smaller. This wealth gap in our country could have profound implications.
Sorry, no funny stuff this time.
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