From arts to airports, Columbus' diverse economy is feeling the dire consequences of the outbreak.
They’re called WARN notices, and these state-mandated layoff notifications provide insight into the depth and breadth of the local economic devastation wreaked by the ongoing COVID-19 epidemic, providing a flashing-red warning of a looming recession.
Ohio companies filed six Worker Adjustment Retraining Notifications with the state in all of November and December, totaling 538 layoffs. In comparison, there were 69 filings, resulting in 13,991 job losses from March 17 to March 31 as the state closed schools and restaurants, banned large gatherings and ordered residents to stay in their homes to stop the spread of the new coronavirus. Only companies with 50 or more employees are required to file these notices, which means those figures don’t include thousands more workers let go by small businesses.
Cameron Mitchell Restaurants filed a WARN notice on March 20 affecting 1,390 Ohio employees, including bartenders, managers, cooks, chefs, home office employees and executives. On the same day, the Rusty Bucket chain of restaurants, a sister company of CMR, filed a notice cutting 910 jobs. Car dealerships have been hit hard, too. The Roush Automotive March 20 notice said the company would lay off 200 area workers; Ricart Automotive filed five days later and cut 121 employees at its dealerships in Central Ohio.Information is critical. Read our latest reporting on the coronavirus response here.
“Nobody knows how bad it will get,” says Bill LaFayette, owner of Regionomics, a local economic consulting firm. “It all depends on how long this lasts, and nobody knows that.”
Almost 85 million jobs nationally are at a high or moderate risk, according to Moody Analytics. Other experts and economists have said the unemployment rate could reach 20 percent, as a record 3.3 million Americans filed for unemployment during the work week of March 16 to March 20. LaFayette says the biggest losses among the 1.12 million workers in the Columbus metropolitan area will be “at restaurants and hotels and everything travel- and tourism-related, and all the businesses that supply them. A lot of retail is going to shut down, if it hasn’t already, because people can’t get out.” A survey by the Ohio Restaurant Association found that 47 percent of the 308 respondents had closed restaurant locations.
The $2 trillion federal stimulus package could help, but it’s hard to know how much. “Uncertainty will dominate and make the recession more severe,” says Ned Hill, a professor of economic development in the John Glenn College of Public Affairs at Ohio State University. Making the economic situation worse, he says, is the weakness in the economy previously masked or hidden by robust consumer spending and low unemployment. Even with the $2 trillion bailout, reluctant consumers may hold off spending what they have, especially on big-ticket items. “And a lot of people in the lower-income levels were already spending everything they made on basic necessities,” Hill says.
Hill hopes the country will benefit from lessons learned during the Great Recession of the late 2000s. “The first lesson was to get the stimulus money out as quickly as possible,” he says. “The second lesson was, Obama wanted a second trillion-dollar stimulus package, but the Senate blocked it, and the recession was prolonged, and it delayed the recovery. I think [public officials] learned their lesson.”
The local economic impact began in earnest with the Arnold Sports Festival in early March, which was closed to spectators, while many of the bodybuilding and athletic competitions were still held in empty venues. The annual event brings in more than 200,000 people from around the country and world, with visitor spending in excess of $50 million. The loss of all those fans hurt restaurants, bars, shops and hotels in a wide radius around the Greater Columbus Convention Center.
“That was the beginning of the devastation, the first time those of us in this industry started wrapping our arms around what COVID-19 was and the effect it was going to have,” says Brian Ross, president and CEO of Experience Columbus, the city’s visitor and convention bureau. “We’ve basically had to cancel everything from March 17 through the end of April. … We’re losing 50,000 hotel room nights and $47 million in visitor spending, and that’s not including the $50 million plus [typically spent at] the Arnold.” (Ross says it’s too soon to tabulate the lost revenue from this year’s Arnold.) If the lockdown and cancellations continue into May, that would mean the loss of two large conventions that Ross says are expected to attract 100,000 attendees and $14 million in visitor spending.
Experience Columbus’s 62 employees work from home, “connecting every day with our partners, finding out who’s open, who’s selling gift cards, doing carryout, online retail,” Ross says. “We’re trying to get those businesses in front of people to help them bring in some revenue.”
Visitor spending has a tremendous multiplier effect, LaFayette explains. “Employees get their wages and salary and go out and spend their money here, on goods and services, at restaurants and so on. And then there’s all the lost [city and state] tax revenue.” The typical one-day visitor spends $130, and the average overnight visitor stays three nights and spends $250, not including any hotel costs, he says.
The arts industry has also been hit hard, as theaters, museums, music venues and other artistic outlets have gone dark. A 2018 study by Ohio Citizens for the Arts found that the arts generate $41 billion in annual economic activity and support 290,000 jobs.
“We’re finding this crisis underscores how vulnerable our arts and cultural infrastructure is,” says Angela Meleca, executive director of Ohio Citizens for the Arts. “This has been devastating, and it’s too soon to know what the end result will be.” Self-employed artists who’ve lost work don’t usually qualify for unemployment compensation, but the $2 trillion stimulus package does extend unemployment insurance to freelancers. “We’re in survival mode, trying to keep as many individual artists afloat [as we can],” Meleca says.
The irony is that now, more than ever, the arts are necessary. “We enrich people’s lives and add so much culturally,” Meleca says.
Hill believes several other major industries will also be affected, including retailers with inventory they’ll be unable to sell, and the region’s massive system of distribution centers will slow to a standstill, though grocery stores and Amazon (which has a huge presence in Central Ohio) are thriving. Smaller community hospitals will be hit hard, as elective surgeries are canceled, while colleges and universities, especially smaller, private schools, also will suffer. “Many were already having trouble and were making budget cuts,” Hill says of smaller universities. “How many new freshmen will they get, how many parents will be willing to let their children go and live in dorms? We need stable educational institutions. That’s our future workforce.”
Home sales could also decline sharply. “Nobody is going to want to have an open house and have a bunch of strangers traipsing through their house,” LaFayette says.
Meanwhile, the John Glenn and Rickenbacker airports are quiet. “Half our flights are cancelled, and we’re seeing even more cancellations every day,” Joseph Nardone, president and CEO of the Columbus Regional Airport Authority said in late March. Load factor, the percentage of occupied seats, is down from above 80 percent into the teens, Nardone says. “We had one aircraft with 149 seats and four folks on it.”
The authority estimates the region’s airports generate $12.9 billion in annual economic activity and 59,000 jobs. The airports set a record of 8.9 million passengers in 2019. “It may take a year or two longer to get past the 2019 levels, but it’s coming, and we’re ready for it,” Nardone says. “This is an incredible city and region with great leadership, and we’ll get through this.”***
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