As the COVID-19 pandemic continues to impact our economy, economists, researchers, and legislators are paying very close attention to the housing market. As unemployment rises and the stock market continues to be volatile, there is fear that COVID-19 “will spur a full-blown recession that takes the country months, or even years, to recover from,” according to Maurie Backman, USA Today. The housing market is currently seeing positive and negative changes in response to the COVID-19 pandemic.
Disney has furloughed 100,000 theme park and hotel workers, including popular cast members. Disney is widely considered the largest employer in the nation and this furlough is expected to save the company a reported $500 million a month. The furlough is centralized in Florida where over 70,000 workers have been furloughed. An employee furlough is when staff members are required to take an unpaid leave of absence. According to an NBC News article, “Some 26,000 of those workers are members of UNITE and thanks to an agreement worked out with Disney before the layoffs, they will be automatically be enrolled in the unemployment program, the union said in a statement.” UNITE is a labor union representing workers throughout the U.S. and Canada who work in the hotel, gaming, food service, airport, textile, manufacturing, distribution, laundry, and transportation industries.
Liam Elkind is the founder of Invisible Hands, a group of thousands of volunteers that are bringing groceries to people at high risk of contracting coronavirus. This organization is connecting “young, able-body people with those most in need during this time of crisis.” People who are 65 and older or have pre-existing conditions have a higher risk for contracting coronavirus. The founders stated that they felt inspired by our healthcare professionals who are on the front lines fighting COVID-19. Through the Invisible Hand initiative, those at a higher risk can request a delivery of groceries, medicine, and/or supplies online. The Invisible Hand volunteer will then pick up the items and deliver them for free.
College campuses all over the world have closed and have sent students home for the rest of the school year. As people practice social distancing and quarantining methods, economic activity is declining. Similarly, as students vacate campuses and head home, economic activity in college towns significantly decreases. Stephen Gavazzi, writing for Forbes, notes that when students leave campus, “gone with them is the purchasing power they had poured into the local economy.” College towns are regions whose revenues rely heavily on demand from the student population, and “until recently, college towns were thought to have a distinct economic advantage over municipalities that did not host an institution of higher learning.”
According to the US Department of Labor, over 16.8 million American workers have lost their jobs and filed initial claims for unemployment benefits. This current calculation does not include those workers who have yet to file for unemployment benefits and does not include undocumented workers. Layoffs, furloughs, and pay cuts have swept our nation. Amid such a crisis, Amazon is seeing surges in demand. Amazon has solidified itself as an e-commerce giant and its current business model easily aligned with the COVID-19 social distancing orders. Amazon has already filled the 100,000 positions they posted last month and now they are hiring another 75,000.
Apple and Google are among the top technology companies in the United States, alongside Microsoft, Amazon, and Facebook. Google and Apple have released an announcement that they will work together to assist government and healthcare agencies in reducing the spread of COVID-19. Through usage of Bluetooth technologies, “the companies will work together to notify users if they have come in contact with someone who has tested positive for COVID-19.” Patients who have tested positive for COVID-19 are expected to be removed from the database once they test negative. Security and privacy are of high priority to both companies, they have stated “personal information and location data” will not be collected. Both companies are committed to full transparency.
The restaurant and service industries in our nation have been severely impacted by COVID-19. The Food Action Policy released a detailed blog regarding ways Congress can assist the restaurant industry during this time. The FPA states that the restaurant industry is crucial to our economy, contributing “$1 trillion to our economy and representing 4% of our gross domestic product.” Restaurants all over the nation are closed due to COVD-19. “Up to seven million people have been laid off, and millions of farmers, beverage suppliers, delivery people, manufacturers, launderers, and other small businesses will have their bills go unpaid, creating an unprecedented trickle-down effect of damage to these local restaurants and their communities.” The FPA estimates a $225 Billion loss in revenue over the next 3 months.
NASA finds that COVD-19 has drastically reduced China’s air pollution. Through usage of the Ozone Monitoring Instrument (OMI) on NASA’s Aura satellite, NASA measured NO2 (nitrogen dioxide) levels in Wuhan, China. Nitrogen dioxide is emitted from the burning of fuel, primarily from transportation vessels and power plants. Every year, celebrations of the Lunar New Year normally result in business closures from late January to early February. During this time, NO2 levels drop and then eventually rise again. However, during January and February of 2020, China saw a reduction in NO2 levels of 10% to 30% below averages and expectations. Additionally, NO2 levels have not rebounded since the conclusion of the Lunar New Year Celebration.
Don’t call it a comeback! Amid the COVID-19 pandemic, certain markets will see expansions and others will see contractions. We already see contraction and a reduction in economic activity in our service industries. One unique market that is seeing an expansion, or increase in economic activity, are Drive-In Movie Theaters. The Los Angeles Times reports, some of the 305 drive-in movie theaters in the United States are seeing a surge in sales. The Paramount Drive-in (in Paramount, CA) reported that their sales have at least doubled, and demand is at an all-time high.
