Here comes the next recession as nearly one-third of small businesses in New York and New Jersey remain closed since the virus pandemic began earlier this year.
The NYPost outlines small business data from Opportunity Insights and New Jersey Business & Industry Association paint a troubling outlook for the rest of 2020 into 2021.
Opportunity Insights' TrackingTheRecovery.Org, a Harvard database that monitors economic activity for the US, currently says 27.8% of small businesses in New York remain closed. The same goes for New Jersey, where 31.2% of small businesses had not reopened.
The New Jersey Business & Industry Association reports similar figures with 28% of New Jersey's small businesses have closed up shop this year.
With top federal health officials on Sunday warning about a post-Thanksgiving spike in COVID-19, the reemergence of the virus in New York and New Jersey, along with stricter social distancing measures, means that more small businesses may be decimated in the months ahead.
"It's really bad," Eileen Kean, New Jersey state director of the National Federation of Independent Businesses, told the Star-Ledger.
"And without federal dollars coming into New Jersey, the Main Street stores and other establishments are not gonna make it through the winter," Kean said.
"It's devastating how many restaurants have shuttered and jobs have been lost," said Andrew Rigie, executive director of NYC Hospitality Alliances.
"And with the infection rate rising and the looming threat of indoor dining closing again, many more will close unless the government provides adequate support to these small businesses," Rigie said.
On top of the small business closures in both states, 300,000 New Yorkers have filed a formal change of address notices with the U.S. Postal Service from March 1 to October 31. The rapid population decline suggests consumption at small businesses will continue to suffer well into 2021.
This all means that New York City's economic recovery will lag the rest of the country. As explained by Mark Zandi, the chief economist for Moody's Analytics, the city's recovery might not be seen until 2025:
"This is an event that struck right at the heart of New York's comparative advantages," Zandi said. "Being globally oriented, being stacked up in skyscrapers and packed together in stadiums: the very thing that made New York the pandemic undermined New York, was upended by it."