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Running tally on Collateral Damage from NY Executive Order 202
June 11, 2020

New York State on PAUSE

Business Closures

  • More than 100,000 small businesses have closed forever, resulting in millions of job losses.[1]
  • Facebook survey of 86,000 small and medium size business reported that 33% of the businesses will not be able to reopen and 55% won’t hire the same workers. [2]
  • Western New York insurance companies are refusing to cover business losses due to COVID shutdowns. [3]

Bankruptcies  

  • Hertz, a company that reported $9.5 billion in revenue in 2019 and has more than 38,000 active employees, filed for bankruptcy on May 22, 2020. [4]
  • JCPenny, a 118 year old company with 846 stores and 90,000 employees, filed for bankruptcy on May 15th, 2020. [5]
  • Diamond Offshore, a company that reported $981 million in revenue in 2019 and employed 25,000 workers filed for bankruptcy on April 26, 2020. [6]
  • Frontier Communications, a company that reported $8.1 billion revenue in 2019, filed for bankruptcy on April 14, 2020. [7]
  • Gold’s Gym, a fitness chain that operates 700 gyms around the world, filed for bankruptcy on May 4, 2020. [8]
  • Crew, an apparel giant that employed 10,000 workers, filed for bankruptcy on May 4, 2020. [9]
  • Neiman Marcus, an apparel company that employed 14,000 workers, filed for bankruptcy on May 7, 2020. [10]

Layoffs

  • Airbnb is laying off 25% of its workforce. [11]
  • Hertz is laying off 26% of its workforce. [12]
  • United Airlines expects to lay off at least 30% of its workforce. [13]
  • IBM will eliminate 2,000+ jobs. [14]
  • Uber is laying off 14% of its workforce [15]
  • Lyft is laying off 17% of its workforce. [16]
  • Boeing is laying off 10% of its workforce. [17]
  • Cirque du Soleil is laying off 95% of its workforce. [18]

GDP

  • Fed reserve Bank of Atlanta is projecting GDP down 42.8 % in Q2.

Sales

  • Retail sales down 16.4 % in April.
  • New real estate listings down 47% in April[19]
  • New car sales down 10%-20%. [20]

               

Production

  • Factory output down 13.7% in April - worst output decrease in history.
  • US industrial production fell 11.2% in April - worse number in 101 years.

Unemployment

National:             

  • 5 million Americans have filed for unemployment as of May 15th - Great Depression peaked at 15 million.
  • According to the Federal Reserve of Chicago - real rate of unemployment in the US is 30.7 %.
  • Official unemployment rates in April and May 2020: 14.7% and 13.3%. [21]
  • 42% of jobs lost during the pandemic will end up being permanent.
  • 40% of households with income of 40K or less say they have lost a job during the shutdown.
  • According to the University of Chicago- 68% of the unemployed are eligible for unemployment. Wages greater than what their lost earnings - average is 134% of previous wage.
  • Supplemental $600 per week relief is set to expire in July.

New York State:               

  • 8 Million unemployment claims.
  • 4 billion in payment for first 7 weeks of the lock-down – roughly 6 times the number of claims during the 2008 financial crisis.

Erie County:

  • 6%+ unemployment rate as of June 3, 2020.[22] 

Homelessness

  • A Study by Columbia University suggests a 45% rise in the US homeless population.

               

Commercial Real Estate

  • Many are predicting a commercial real estate implosion.
  • Median list prices are at their slowest growth in seven years. [23]
  • Nearly half of commercial retail rents were not paid in April and May. [24]

Residential real estate

  • 80% of would-be-buyers have either delayed their housing search or stopped it altogether. [25]

NYS Budget

               

  • Andrew Cuomo said that New York will report a $13.3 billion shortfall in revenue compared with its original forecast — representing a 14% decline in the state’s projected receipts – April 24.
  • The Empire State, which has been hit harder by the coronavirus pandemic than anywhere else in the U.S., currently forecasts a fall in revenues of $61 billion between fiscal years 2021 and 2024
  • An assessment done by the Boston Consulting Group predicts the state’s economy will lose a staggering $243 billion over the course of the pandemic and the economic recovery, or 14% of the state’s gross domestic product.  The recovery will be longer than the Great Recession of over a decade ago.
  • The financial report also predicts that the state will have to slash $10.1 billion from the current budget, leading to over $8 billion in cuts to schools, health care providers, and local governments.

Health

  • Up to 154,037 Americans impacted by the Government’s response to COVID response are projected to die from drugs, alcohol, and suicide.[26]
  • Two of the three main factors in increasing deaths of despair during COVID-19 are economic failure with massive unemployment and mandated social isolation for months and possible residual isolation for years.[27]
  • Pronged use of face masks during work leads to discomfort that interferes with employees’ [28]

[1] https://www.washingtonpost.com/business/2020/05/12/small-business-used-define-americas-economy-pandemic-could-end-that-forever/

[2] https://www.washingtonpost.com/business/2020/05/12/small-business-used-define-americas-economy-pandemic-could-end-that-forever/; https://www.cnbc.com/2020/05/18/facebook-survey-details-coronavirus-small-business-devastation.html

[3] https://www.wivb.com/news/local-news/buffalo/insurance-companies-claim-losses-due-to-covid-19-shutdown-are-not-covered/

[4] https://www.nbcnews.com/business/consumer/which-major-retail-companies-have-filed-bankruptcy-coronavirus-pandemic-hit-n1207866

[5] https://www.cnbc.com/2020/05/15/these-companies-have-filed-for-bankruptcy-since-the-coronavirus-pandemic.html

[6] https://www.cnbc.com/2020/05/15/these-companies-have-filed-for-bankruptcy-since-the-coronavirus-pandemic.html

[7] https://www.cnbc.com/2020/04/15/frontier-communications-files-for-bankruptcy-protection.html?&qsearchterm=frontier%20communications

[8] https://www.goldsgym.com/blog/restructure-official-company-statement/

[9] https://www.cnbc.com/2020/05/15/these-companies-have-filed-for-bankruptcy-since-the-coronavirus-pandemic.html

[10] https://www.cnbc.com/2020/05/15/these-companies-have-filed-for-bankruptcy-since-the-coronavirus-pandemic.html

[11] https://www.businessinsider.com/airbnb-layoffs-generous-severance-package-2020-5

[12] https://www.reuters.com/article/us-hertz-layoffs/us-car-rental-company-hertz-to-lay-off-10000-staff-on-coronavirus-hit-idUSKBN2222XD

[13] https://www.chicagotribune.com/coronavirus/ct-coronavirus-chicago-united-airlines-job-cuts-20200505-542kkmykdfbvjdefti6d3tbb7i-story.html

[14] https://www.businessinsider.com/coronavirus-layoffs-furloughs-hospitality-service-travel-unemployment-2020#boeing-said-it-would-lay-off-nearly-7000-employees-on-may-27-the-company-initially-announced-that-it-would-cut-about-10-of-its-workforce-on-april-29-the-company-had-143000-workers-at-the-beginning-of-the-year-2

[15] https://www.businessinsider.com/uber-announces-layoffs-3700-job-cuts-14-percent-employees-coronavirus-2020-5

[16] https://www.businessinsider.com/lyft-layoffs-17-percent-staff-furlough-hundreds-more-coronavirus-2020-4

[17] https://www.businessinsider.com/boeing-earnings-loss-layoffs-job-cuts-coronavirus-2020-4

[18] https://www.prnewswire.co.uk/news-releases/cirque-du-soleil-entertainment-group-announces-company-wide-temporary-layoffs-as-a-result-of-coronavirus-pandemic-804374245.html

[19] https://www.cnbc.com/2020/04/20/these-markets-could-see-the-sharpest-drop-in-home-prices-during-coronavirus-pandemic.html

[20] https://www.cnn.com/2020/04/01/business/car-sales-coronavirus/index.html

[21] https://www.statista.com/statistics/273909/seasonally-adjusted-monthly-unemployment-rate-in-the-us/

[22] https://fred.stlouisfed.org/series/NYERIE9URN

[23] https://www.cnbc.com/2020/04/20/these-markets-could-see-the-sharpest-drop-in-home-prices-during-coronavirus-pandemic.html

[24] https://www.washingtonpost.com/business/2020/06/03/next-big-problem-businesses-cant-or-wont-pay-their-rent-its-setting-off-dangerous-chain-reaction/

[25] https://www.forbes.com/sites/taramastroeni/2020/05/18/new-study-explores-how-coronavirus-has-impacted-buyers-in-the-real-estate-market/#25e613a82119

[26] https://wellbeingtrust.org/wp-content/uploads/2020/05/WBT_Deaths-of-Despair_COVID-19-FINAL-FINAL.pdf

[27] Id.

[28] https://pubmed.ncbi.nlm.nih.gov/22168256/

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