The US economy has come a long way. That was only 18 months ago when the coronavirus pandemic hit full force, triggering a devastating recession . Mais like the recent Wave of infections and hospitalizations of the highly contagious Delta variant of the virus clearly shows that the pandemic is not over. Neither will the economic fallout.
This is evident in the performance of the country's largest cities, which have been hit hardest by the pandemic. New York City's health care system was overwhelmed early on as the virus ravaged its densely populated neighborhoods. To contain the virus, businesses were closed immediately one-fifth of idle workers in the city. Major cities that have lost at least a sixth of their jobs virtually overnight are Boston, Chicago, Detroit, Los Angeles, Miami, Philadelphia and San Francisco.
These cities have been working hard to replenish their economies, and earlier this year, as vaccines were rolled out, there were was very optimistic that, like the rest of the nation, they would quickly recover. In New York, the lights of Broadway are back, restaurants and museums have reopened, the Yankees played the Red Sox , and the city has regained nearly half of the jobs it lost. welcome them to their skyscraper office towers. For a brilliant few weeks, it looked like the country's major cities were going to make a quick comeback to the early fall.
Unfortunately, this will not happen.ariante Delta, which is highly contagious, has emerged quickly this summer and is causing substantial economic damage. She has crushed plans by many employers to bring workers back to the office . Instead of coming back after Labor Day, companies are now hoping for next month or the following month. Some are eyeing the start of 2022. Many city centers across the country will remain eerily quiet, dashing any hope for restaurants, retailers, and other small service businesses reaching out to these commuters to hang on.
Tourists and business travelers who typically fill hotel rooms in big cities and convention centers have suddenly become more cautious and fearful to get sick. The number of people passing through TSA checkpoints had been steadily recovering but are dwindling again. Hotel and rental car bookings have plummeted in recent weeks. Online restaurant reservations are also disabled. Google , which tracks people's movements through their cell phones, says there are fewer of us to frequent retail and leisure activities.
Delta wreaks even more havoc abroad, havoc that reverberatesent hard on American cities closely linked to the rest of the world. There won't be many British, Brazilian or Chinese tourists until travel bans and quarantine restrictions are lifted, but it's unlikely to happen anytime soon. Scrambled Global Supply Chains are now even more crowded , especially in the emerging world, where most supply chains begin. This is causing shortages and soaring prices. (China recently closed a terminal at a large seaport following the discovery of the Delta variant among dockworkers. The cost of shipping goods to New York from Shanghai in anticipation of the Christmas shopping season has increased. quadrupled.)
Cities are alsostruggling with a lack of foreign immigrants , who were unable to make it here during the pandemic. Without more immigration, businesses won't be close to completing the record the number of open positions . Endemic labor shortages were Problem No. 1 before the pandemic. It's even more serious now because a lot of baby boomers have stopped working . Until the end of the pandemic and the resumption of immigration of skilled and unskilled workers, businesses, especially in large cities, cannotwill not get the help they need.
The most economically pernicious for large cities is the " work from anywhere ". The pandemic has triggered an exit of workers from urban areas. They have the power to work wherever they want. More than three quarters of a million more people have left major cities than they have settled there since the start of the pandemic, according to calculations by Moody 's Analytics based on changes in address in their credit records.
This is three times more than a similar period just before the pandemic. The city of New York alone is responsible for more than a third of the increase in the net outflow of people from urban areas to suburbs, suburbs, small towns and rural areas. Los Angeles and the California Bay Area are not far away, followed by Chicago, Boston, Miami, Washington, Seattle and Philadelphia.
Some white-collar workers will give up the lifestyle of work anywhere when office buildings will welcome workers back in earnest, but for the most part, it's here to stay. Human resources departments will take care of insignificant obstacles. For example, if an employee moves from New York to Jacksonville, Florida, sho Could they still be paid based on the higher salary structure in New York and cost of living higher or more in line with Florida? ? Employers and employees will naturally have different points of view on this matter.subject, which will slow down the speed with which these negotiations come to an end. For many, the shorter journeys, cheaper housing and living costs , lower taxes and an easier way of life in many southern states and the center will be a huge draw.
The Delta variant is a reminder, if one was needed, that the pandemic is not over and that the economic recovery is closely linked to its ebbs and flows. It will not be a straight line back to full force for the economy, especially for the country's largest cities. They have a few adjustments to make: find ways to moderate house prices, rent, and other costs of living, and lower tax rates. Cities have faced economic challenges from taille in the past, but they still get by. When they do, and only then, our economy will really get back on track.
Mark Zandi is the Chief Economist at Moody 's Analytics, a company that carries out economic research and risk analysis.
The Times agrees to publish a to the editor. We would love to hear what you think of this article or any of our articles. Here are some tips . And here is our email: lettresHfrance.fr .
Follow the Opinion section of Hfrance.fr on Facebook , Twitter (@NYTopinion) and Instagram .