By Belinda Román, For the Express-News
Perhaps this year, COVID-19 will be in our collective rearview mirror but not quite out of sight. Maybe it will be just far enough behind us that we turn to our “new post-pandemic normal.”
We don’t need many reminders of what has transpired in Bexar County, affecting in dire ways the health of our neighbors and the regional economy.
The Dallas Federal Reserve’s Mobility and Engagement Index, which tracks the movement of GPS-enabled devices, such as cellphones, tells a clear story. We stayed home and economic activity declined significantly; that is, the economic activity as measured by gross domestic product and its local equivalent, gross regional product, fell.
The good news is this number rebounded quickly. The U.S. Bureau of Economic Analysis estimates that in the second quarter of 2020, GDP dropped 33 percent and then rebounded by 31 percent in the third quarter. Some of this rebound was from bars, restaurants and retail establishments reopening to foot traffic and employees. The last quarter of the calendar year remains a toss-up, pending results of the vaccines and changes to local guidance.
But the sad truth is that jobs will be lost, never to return. The flip side of the Mobility and Engagement Index is the extent to which our buying habits will change. The Gap at the Shops at La Cantera is closed, with locks and notices on its doors. According to court documents filed in Chicago, the mall leasing company and the Gap are in a legal dispute over rent payments.
These rent payments are significant because in-store sales generate store revenue, which leads to rent payments in addition to covering payroll. With full shutdowns and intermediate measures such as limited capacity, the opportunities for foot traffic decreases. Hence, businesses centered on in-person customers are facing significant difficulties generating revenues to cover rent and wages.
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If the predictions made by the National Retail Federation hold true, most aspects of retail life will become highly digital and touch-free. The federation predicts that changing rooms will give way to virtual fitting rooms. Cosmetics counters will use technology to analyze your skin. Shoe departments in stores will be replaced by vending machines. In other words, these retail services will not need workers.
Local vendors need consumers to walk into their stores, where their employees — who are our friends, family and students, like those who attend my classes at St. Mary’s University — are trying to earn a living. If we remain home once it’s safe to return to our pre-pandemic habits, we may not be acting in support of our local economy.
ADP’s latest national employment report shows that businesses with one to nine employees — the most typical size in San Antonio — that produce or sell products declined by 0.23 percent while the largest companies of 1,000 or more employees gained 0.21 percent.
ADP publishes monthly employment payment processing data, used by many to gauge the conditions of the labor market. The bottom line is that companies that produce tangible output are losing out to the service sector — but we can’t sleep on, wear or eat a service.
For every aspect of our shopping experience that deploys technology as a purchasing option, we will lose jobs — many jobs.
Our community and economy need us to support local small businesses with our purchases and businesses to add a pick-up component so we can don masks, maintain social distancing and help employ a person, too. And let’s hope these establishments don’t decide to replace humans with robots for your pick-up order.
Belinda Román is assistant professor of economics and lead investigator on the Women in the Economy project of the SABÉR Research Institute at St. Mary’s University.