NYC struggles to recover after Omicron case spike

As the pandemic drags into its third year, the Omicron variant has added another boost to New York City’s road back to normal, injecting new uncertainty into the economic outlook and threatening exacerbated the city’s already derailed recovery.

Office staff have sent home againreverse steady increase in subway riders and hurt small businesses in central business districts. ONE survey of large companies of Partnership for New York City, a business advocacy group, found that 75% of employers have delayed their plans to return to the office.

The last two months are supposed to flourish, with the arrival of foreign tourists offers a glimmer of hope to hundreds of thousands of workers whose jobs rely on tourists.

Instead, hotel occupancy rates plummeted. The temporary closure sign is filled restaurant window, bank branches and public libraries crippled by ailing employees. Broadway show suddenly turned offsome permanent.

For now, the increase in Omicrons is easing, with the average daily number of recorded cases down more than 80 percent from the peak in early January. But its effects linger, especially on blue-collar workers.

Like other coronavirus waves, this one has caused disproportionate pain to employees who have to show up in person, deepening the stark economic divides that have defined job resilience. fragility of New York City, the slowest of any major American city.

In December, service area employees in the New York City area worked an average of 22.9 hours per week, lower than in December 2020, when the average was 25.4 hours, according to the data. by Gusto, an aggregate payroll platform. Working hours fell even more in the first two weeks of January, though sharp drop in new virus cases.

“It’s clear that Omicron is doing some meaningful damage here,” said Mark Zandi, chief economist at Moody’s Analytics. “New York City will bounce back, but it won’t recover for a long time.”

However, parts of the city’s economy are thriving. Wall Street firms like JPMorgan Chase, the city’s largest privately held company, blockbuster profit report in 2021, with significant pay increases for bankers. This has helped boost overall personal incomes in New York to higher levels than they were in 2019, putting the city and state’s finances in a healthier shape than economists had expected. .

In a report released this month, the city’s Independent Budget Office described a “significantly stable” fiscal outlook for New York, based on late November conditions. dollars in federal pandemic aid, including stimulus checks and expanded unemployment benefits, helped replenish the city’s lost tax revenue.

But given the uncertain impact of the Omicron variant, budget office economists now warn that their outlook is likely to be too optimistic. (And the stock market has also started a year wild and volatile ridewith the S&P 500 Index down 8.7% this month, after rising 26.9% in 2021.)

The latest wave of the virus has wreaked havoc on small businesses like Land to Sea, a cafe and event space that opened in the Williamsburg neighborhood of Brooklyn in October.

On December 16, the cafe kicked customers out in broad daylight because an employee had been exposed to the virus. The rest of the employees took so long to receive their test results that the cafe closed for two days, then switched to takeout only for 17 days. (Everybody ended up testing negative.)

When an employee tested positive this month, Emily Shum and Eva Zhou, co-owners, struggled with confusion and federal guidance transfer around the quarantine period. They decided to ask the employee to show a negative test before returning. “We are still being really cautious,” Ms. Shum said.

One economic indicator that is particularly worrisome is the city’s labor market, where consistently lags behind the nationwide recovery. New York City had an unemployment rate of 8.8% in December, according to a jobs report released last week, compared with 3.9% nationally.

The budget office projects that until the end of 2025, New York City will not recoup all of the jobs lost during the pandemic, while the national economy is expected to surpass the pre-pandemic this year.

Compared to other large cities, a disproportionate share of New York City’s workforce consists of low-wage jobs that rely on tourism and full office buildings.

“The risk is that there is a longer-term polarized society between haves and have-nots,” said James Parrott, economist with the Center for New York City Affairs. “We had a chasm between them before, but the longer this goes on, the wider it becomes. It has serious impacts on the quality of life in New York City.”

The abyss can be bigger with The recent recovery in the residential property marketThis has raised concerns about the city’s affordability.

According to listing website StreetEasy, although rents did drop in the early months of the pandemic, according to listing website StreetEasy, rents have now surpassed pre-pandemic levels in neighborhoods like the Financial District. in Manhattan and downtown Brooklyn, where many white-collar employees work remotely. The median rent in SoHo, where rents increased the most last year, is now $6,002.

In the second half of 2021, more apartments sold more in Manhattan than at any time in the past three decades, driven by demand for luxury buildings, according to brokerage Douglas Elliman. In Brooklyn, the median sale price was nearly $1.2 million, up 21% from pre-pandemic.

Nancy Wu, chief economist at StreetEasy, said: “Rent increases mean people are coming back to the city, more taxes, more jobs. However, she added, “It will make it harder for renters to find an affordable place.”

The rise of Omicron only adds financial instability to workers like Erik Owusu, who was sent home early during the pandemic due to his partying work at the Crowne Plaza Times Square hotel.

Last month, he became an Uber driver, despite concerns about contracting the virus. He hopes to get enough tourists back by spring for Crowne Plaza to reopen and call him back.

“This pandemic really messed up everyone’s plans,” Mr. Owusu said.

By mid-December, 74 percent of the city’s available hotel rooms were filled. But that number dropped to about 40% by the second week of January, according to STR, an industry research firm.

Pedestrian traffic at the three main airports serving New York City also reversed their gains. In November, airports handled more than nine million passengers, down about 15% from pre-pandemic levels.

But in the first week of January, passenger numbers were down about 34 percent from the same week in 2019, according to the Port Authority of New York and New Jersey.

Even if international tourists return in large numbers, economists predict there will be a permanent drop in business travel.

Gabriele Marinello, who is based in London and runs a scientific research publishing platform, flew to New York shortly after travel restrictions were lifted in November, hoping to meet the funders in person. support and potential customers. He was traveling with three of his employees and booked a three-month stay at an Airbnb in Brooklyn.

But as Omicron tore through the city, most of his meetings became Zoom calls.

“I value face-to-face meetings,” Mr. Marinello said. “It’s a bit of a pity that this is the time we live in.”

During his first days in office, Mayor Eric Adams repeatedly urged companies to call their employees back to the office, suggesting that companies start with three days a week and slowly increase it to five. day.

“It’s time to get back to work,” Mr. Adams told CNBC in an interview this month.

By mid-January, 22% of employees in the New York City area had entered their offices, according to Kastle Systems, a security company that tracks card swipes in office buildings – a drop from with last year’s high of 37% in early December.

Even financial firms like Goldman Sachs, which have been among the most active in returning to the office, said in the Omicron wave that employees could work from home until February.

Business leaders say safety concerns have added to employees’ reluctance to return to the office. After a series of violent attacks this month, including the death of a woman who was shoved into an oncoming subway train in Times Square, Mr. Adams revealed. an ambitious public safety planincluding calling for changes to state bail laws.

The future of office buildings, which contribute the most to the city’s property tax base, is particularly uncertain. Despite an increase in office leasing activity in the final months of 2021, the vacancy rate continued to rise, ending the year at 20.4%, nearly double the pre-pandemic rate, according to Cushman & Wakefield, a company real estate company.

In the area around Grand Central Terminal, 30% of ground-floor retail space is vacant or remains closed, according to the Grand Central Partnership, a group that promotes the area’s business.

Just a few months ago, San Cheng thought his all-you-can-eat seafood restaurant, Crab House in Midtown Manhattan, had finally weathered the worst of the pandemic.

The rise from the Delta variant has dwindled, and daily cases have dropped to some of the lowest levels of the pandemic. Office workers have filled Midtown again, and foreign visitors are expected to start returning.

With that optimism, at the end of September, Mr. Cheng decided to expand the Crab House, building an outdoor dining area mainly to serve unvaccinated diners and It is forbidden to eat in the house. But the structure was only used a few times before cold weather and the Omicron variant spooked diners.

Even now, more than 60% of bookings at Crab House are being canceled in an average day, Mr. Cheng said.

Through it all, he still hopes that his business will last.

“We still feel good about our future,” he said. “Otherwise, we wouldn’t make it, you know?”

Lananh Nguyen contribution report. NYC struggles to recover after Omicron case spike

Fry Electronics Team

Fry is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button