With the scaling back of state lockdown mandates, businesses are working to operate under new safety protocols designed to curtail any possible spike in COVID-19 cases.
Gov. Gavin Newsom outlined details of the state’s new measures during news conferences Thursday and Friday that focused on ensuring public health continues to take priority as businesses embark on Phase 2 reopening.
The process is being undertaken slowly and incrementally.
“We are encouraged and excited to know the state is slowly starting to pivot toward reopening,” John Kabateck, state director for the National Federation of Independent Business (NFIB) in California, told the Northern California Record. “Obviously we would like to see all small businesses and entrepreneurs thriving and opening their doors as soon as possible. We also respect that our governor and other leaders are getting the best information from health experts of when it’s safe for each sector to do so.”
Some residents took to protesting at beaches and some businesses chose to reopen before Friday, showing that for some the process is taking too long.
“The reopening steps Governor Newsom announced for this Friday are largely symbolic and will have only a limited benefit for the California economy,” Marc Joffe, senior policy analyst with Reason Foundation, told The Record by email. “For example, the state will begin permitting curbside pickup of books pre-ordered from a bookstore, but, with the option of ordering online from Amazon, it is hard to imagine many Californians using this new option.”
California could benefit from doing what some European countries have, Joffe said.
“California’s reopening strategy is too slow and is harmful to both small businesses and their employees. Since service industry employees are disproportionately young, female and immigrants, extended lockdowns are highly inequitable,” Joffe said. “We should be looking to Denmark and other European countries that have progressive values but are reopening their economies much faster than we are.”
As businesses navigate this new territory, the process will take time, Aaron Strong, an economist at the RAND Corporation, said in an email response to the Record.
“There are important legal and public policy decisions that need to be reconciled for business to feel safer as they open up. First, if an employee becomes infected as a likely result of being at work, does workers' compensation apply? Second, if a former employee is receiving unemployment insurance and they refuse to come back to work due to an underlying risk or preference, will they lose those unemployment benefits? Third, are there likely to be customers, and are the business’s suppliers available?
“We have tended to focus on the distinction between essential and non-essential. As we open up, we can change that discussion from low-risk to high-risk occupations,” Strong said.
“The only way to have a successful reopening is to simultaneously control the spread of the virus,” Strong added. “That means testing in the form of both infection and antibody tests. Contact tracing for those that test positive so that we can further control the spread from those that are more likely infected. Quarantine for those that are infected. Subsidizing business to test their employees.”
As businesses apply the new reopening guidelines, and more sales taxes are collected, the revenues will provide a much-needed boost to the public sector and the economy as a whole, Kabateck of the NFIB said.
“Our public sector needs to have fuel to succeed, and thriving Main Street business is one of the best ways to do that. The tax dollars that small businesses pay every day go toward public services – schools, hospitals, public safety and more. When that money is not coming in, it’s not making it to vital hubs that need that money, especially at this time,” Kabateck said.
Strong of the RAND Corp. also said that the economic recovery could take much longer than anticipated.
“We are hopeful that the closure was short enough that there will not be long-term disruptions to the supply chains.There is likely to be a ‘new normal’ going forward,” Strong said. “Our estimates for California suggest that the economy in Q2 likely contracted by at least 14% in annualized terms and may be as high as 21%. We have recently released a tool that will better equip state and local decision makers see the epidemiological and economic consequences of alternative actions."
Businesses are eager to put the closures behind them and begin the recovery process.
“It’s about getting our struggling businesses a chance at hope and survival,” said Kabateck, who was recently asked to serve on the small business working subgroup of the state’s Task Force on Business and Job Recovery. “This phase is encouraging to us,” he added. ”It pivots us toward hope of putting people back on the payroll.”