March 19, 2020
“The virus will bankrupt more people than it kills” predicted Jennifer Tescher, CEO of the Financial Health Network. “Missing even one paycheck can have a domino effect for families, leaving a trail of missed mortgage or rent payments, utility shut-offs, unpaid bills.”
As COVID-19 propagates around the world and across the U.S., the economic damage is mounting. The U.S. economy will contract in the first half of the year, as forecasted by a report released by JPMorgan last week; industries, companies, and individuals are feeling the effects more immediately and acutely.
The travel industry, one of the hardest hit, has already seen the impact with Norwegian Air temporarily laying off half its staff this week, Delta Airlines announcing a hiring freeze, and Marriott furloughing tens of thousands of employees. In cities that depend on tourism, the precipitous decline in travel is leaving many facing mass layoffs. With recent mandatory closures, a lot of restaurants across the U.S. are shuttered, leaving many owners with little choice but to lay off (hopefully temporarily) hundreds of employees. The impact is harsh: New York City, for example, has roughly 154,000 people working in restaurants, bars, and cafes earning $4.7 billion in wages per year. Estimates from the city’s comptroller indicate a potential wage decline of 80 percent due to coronavirus.
The impact will extend much further. As a recent Brookings Institution essay put it: “Some of the largest occupations employing these [low-wage] workers are also the most susceptible to the economic slowdown accompanying the virus’ spread: 5 million food service workers, 4.5 million retail clerks, and 2.5 million custodians and housekeepers. When college campuses empty out, when stadiums don’t host games, or when conferences are cancelled, it means that food servers, cooks, clerks, and housekeepers are out of work.”
Each of us has a role to play not only in limiting the spread of the virus but also in practicing empathy for those who may be hardest hit financially.
If You’re A Public Company Or Large Business Owner:
- Please do everything you can to pay your workers, even if you have to reduce operations. Many retail companies, including Nike, Urban Outfitters, Apple, and Patagonia, have announced store closures coupled with policies that ensure hourly employees continue to receive their regular pay. And if you are a well-compensated CEO, consider bearing some of the financial hit yourself. Delta’s CEO, Ed Bastian, is forgoing his entire salary for six months to avoid layoffs.
- Don’t forget about hourly and temporary works as well as any subcontractors. From security staff to janitors, the myriad of temporary workers who keep offices running smoothly are often forgotten. Please include them in your contingency plans. Google serves as one example, setting up a fund that enables temporary staff and vendors to continue getting paid even if they cannot come into work because of a quarantine.
- Institute, expand, and highlight paid sick leave. With health experts rightly encouraging those who are sick to self-isolate, it is imperative that we create the right support systems, both short- and long-term, for workers to stay home. However, more than forty percent of U.S. workers in service jobs do not have access to paid sick leave. As gig worker Mariah Mitchell wrote poignantly in a recent New York Times opinion piece, not having paid sick leave means “I can’t self-quarantine because not working is not an option. If I don’t make enough money, I can’t feed my children for the next six weeks.”
- Don’t forget about the downstream implications of your decisions. Coronavirus has highlighted the digital divide, with an estimated 21 million Americans lacking access to high-speed internet, according to the Federal Communications Commission (FCC). Sending your employees to work from home is prudent, but remember that not everyone may be equipped to work from home if they do not have access to company-funded computers or internet access. It behooves companies to think inclusively when implementing work from home policies. In response, some companies, like Shopify, have offered their workers extra money to furnish work-from-home setups.
If You’re An Individual:
Please realize that you interact with many people who may be struggling financially and could use your help and kindness, especially during this volatile time.
- Tip even better. A large number of us may rely on gig-economy workers for car rides, food delivery, and other services. Many of these individuals are working during the pandemic, making it easier for the rest of us to comply with restrictions and social distancing. If you are utilizing these services, please don’t forget to tip and, if you can afford to, tip more generously than usual.
- Shop local and small businesses. The large chains of the world will survive, but many small- and medium-sized businesses have less working capital and operate on thinner margins, making them much more susceptible to the economic shocks due to COVID-19. If you are shopping, deploy your financial capital to help them. If you need to shop in person, consider a locally owned store. Or, if you are stuck inside, consider buying a digital gift card to your favorite small business to help them through the next few months. Mark Cuban set an excellent example, announcing on Twitter, that he would reimburse his employees who “buy [lunch or coffee[ from small local, independent” stores.
- Help those who work for you . If you are privileged to have help at home, whether it is a babysitter, dog walker, housekeeper, etc., consider how you can assist them during the next few weeks and months. Perhaps you can give them the option to take a week or two off with full pay or offer to help them avoid public transportation to decrease exposure to COVID-19 for them (and you!).
- Be generous and kind : Empathy doesn’t have to be financial. Saying “thank you” to the many workers on the front line – doctors, healthcare workers, police officers – doesn’t cost anything; neither does acknowledging grocery store workers and public transport operators who are staying on the job to help with essential services for the rest of us. But there are also opportunities to practice financial empathy. Many folks are also experiencing disruptions to life events (for example, birthday celebrations, weddings, and graduations). While this is undoubtedly disappointing, some parents are using this as an opportunity to teach their children and others important lessons about financial empathy. One Twitter user shared an anecdote about a family who, after cancelling their son’s Bar Mitzvah, kept the contract with the caterer, in order to lend a helping hand to a small, family-owned business. As the tweet’s author wrote, “Grateful for stories like this and for community in a bleak time.”
- Perform random acts of kindness: Others are simply practicing random acts of kindness, like Shea Serrano, who offered to help unknown Twitter users pay their bills during the pandemic. People were inspired by Serrano’s kindness and began offering to help strangers with their bills as well. Now that’s the type of contagion we can all get behind.