On April 9th, U.S.-based think tank Brookings Institute held a roundtable webinar to discuss the ways that COVID-19 is affecting the employment and livelihoods of retail and hospitality workers. While some businesses have been able to manage with reduced overheads and delivery services, most Main Street restaurants have had to furlough staff. The impact of this cannot be overstated:32 million Americans are employed in retail and hospitality sectors, over one-fifth of the entire workforce.
Four perspectives made up the discussion hosted by the Institute’s Metropolitan Policy Program. Tracy Hadden Loh, a Brookings scholar and fellow at Anne T. and Robert M. Bass Center for Transformative Placemaking moderated the panel. From Prince George's County Economic Development Corporation, David Iannucci represented the local response and potential future for small towns, speaking as the President and CEO of a county that has been a leader in job growth since 2008. Annelies Goger, another Brookings scholar and David M. Rubenstein Fellow on the Metropolitan Policy Program, weighed in with her research on the economic repercussions of COVID-19. Offering a view from the restaurant business, owner of D.C.’s Seoul Spice Eric Shin explained how his company has innovated since the emergence of lockdown measures in the U.S..
The majority of the conversation discussed the not insignificant CARES Acts' Paycheck Protection Program and the creaking government apparatus for handling such huge demands from American workers. With a 3-week delay on handling 10 million+ unemployment requests, the role of local bodies- economic development councils, chambers of commerce and philanthropic organisations-to accelerate the movement of cash to where it is needed most was stressed. Short-Time Work Compensation plans have offered one way to keep employees linked to businesses through reduced hours, but they can’t be relied on if the timeframe for lockdowns is extended.
Businesses have had to think about their long-term survival through the downturn - when 50% of food is consumed outside the home, restaurants are bound to be impacted by forced lockdowns. As operations that rely on cash flow and rarely store more than three months of revenue, cost reduction has been a first response. Meanwhile, wholesale retailers will need to update their vending operations to increase flow of inventory to shelves in supermarkets. Loh mentioned the opportunity here - to include further training for building resilience within the supply chain. But even with the application of best recovery practices, between 35 to 75% of restaurants won’t come back from this recession.
Chin mentioned the demand for restaurants to consider a pivot and ask what they can do as a food operation. Speaking from his experience, Chin described how Seoul Spice launched “Heart + Soul,” an initiative to help the local community access high quality food at a low price and repointing inventory to where it is needed most. The operation has a dedicated URL, bodega.seoulspice.com, delivering through DC and in half a dozen neighborhoods in Maryland since March 23rd, with no minimum delivery requirement. A mobile-friendly web page enables customers to choose doorstep or curbside drop points, also providing space for the suggestion of new products to the store. New inventory is highlighted on social media - an Instagram post announcing a fresh stock of toiletries received over 100 Likes.
The everydayness and authenticity of the image itself is undeniable, with responsiveness emphasised above all. While government software systems built in the 1980s show the crippling consequences of legacy, we see how smaller operations are more ergonomic in navigating the changing situation.
Meanwhile, the implications for local government are mounting. Iannucci was most candid on the topic of municipal budgets. When rents, wages, and sales taxes go uncollected, local governments rapidly lose the revenues that support their operation. The county has had over 26,000 layoffs in four weeks, translating to a significant and immediate loss of taxable earnings.
References to online training were mentioned, mostly by Goger. The American Jobs Centres were highlighted as a resource, and the general point of creating reform in the system was noted. Identifying a foundation of online training is viable now, but reforms to what classifies as tax-deductible training needs to be made, says Goger. Whether there is scope to creating an efficient, personalized curriculum for workers remained unanswered.
Brookings recently published research that outlines the labour shortages in infrastructure roles, namely transport, water and energy and the opportunity for work-based learning. An aging workforce hasn’t been met with new joiners from youth - roles remain low in visibility and don’t offer flexibility to foster long-term employability. Only 15% of infrastructure jobs are involved in construction with the remaining 85% (over 14 million workers) are employed in repairing and maintaining existing infrastructure systems. Perhaps now is the moment to act swiftly and implement a smarter exchange of skill-sets between sectors.
For more information, watch the webinar at brookings.edu.
Member discussion