Disney’s Shanghai resort partially reopened. Will people go?
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Consumers are the linchpin of the U.S. economy. Spending by or on behalf of consumers amounts to about 70% of economic activity in the U.S. Which is all well and good when consumers are feeling good. But what happens when that confidence goes away?
Behavioral economist Peter Atwater at William & Mary compared consumer confidence to a tower made of Legos which COVID-19 has shattered.
“It takes a very long time to build it up,” Atwater said. “It’s inherently very fragile.”
It takes an even longer time to rebuild it. It’s easier to scare people away from public spaces than it is to get them to come back. Economist Howard Chernick, the author of “Resilient City: The Economic Impact of 9/11,” said that after the Sept. 11 attacks, the travel and leisure industry took the first big hits. People didn’t feel safe in public spaces.
“Las Vegas, which is a very tourist-dependent city, basically shut down,” he said. Chernick sees some similarities today. Once this crisis blows over, he said, it could take the leisure industry quite a while to get back on its feet — at least another year.
John Gerner, managing director of Leisure Business Advisors, which specializes in theme parks, held this position during and after 9/11. What he learned was that in order to get people back out, companies needed to be transparent.
“We can’t talk down to our guests,” Gerner said. “We have to work with them and essentially say, ‘Look, this is what we’re doing, and we’re going to need you, the guest, to do your share.'”
Meaning consumers also play a part in making it safe to go back out there, by taking the recommended precautions. Like, staying home when they’re sick and washing their hands often.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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