A Third of NYC Small Businesses May Never Reopen, Say CEOs
A third of the city’s 230,000 small businesses may never open their doors again due to losses from the coronavirus pandemic.That’s the worrying conclusion from a report written by the Partnership for New York City. The group’s July 19 post-pandemic response plan singles out accommodation, food service, and retail establishments as particularly vulnerable, with most lacking three months of cash reserves.“That means that funds to restart, pay back rent, and buy inventory are exhausted, leaving tens of thousands of entrepreneurs at risk, particularly business owners of color,” the report says.
Partnership for New York City is a nonprofit advisory group consisting of 300 New York-based CEOs. The group was founded in 1979 by David Rockefeller.
The group’s report was created with the help of 12 global consulting firms. It concludes that COVID-19 has changed the value proposition for New York businesses, since previous advantages such as foot traffic and easy access to customers’ offices have diminished during the pandemic, leaving small-business owners with nowhere to turn in the face of high rents, regulatory burdens, and taxes.
“Over the past decade, political forces have created a much more expensive and litigious environment for business that is no longer sustainable for those whose margins were narrow before the pandemic,” the report says.
The CEOs believe getting out of the crisis will require wide adoption of rigorous health and testing protocols as well as expanding the capacity of the healthcare system.
"This is not just a matter of spending more money," the report says. "New York spends nearly 80% more than the national average per capita on health care. What is required is greater attention to a better integrated system of community-centered patient care, driven by policy and funding guidelines that ensure equitable health outcomes for all communities."
The study, “A Call For Action And Collaboration,” calls for public-private partnerships and other efforts to help businesses and save jobs. These measures include raising taxes on the top 1% of earners as well as federal incentives and community-based child-care programs for certain neighborhoods.
Other highlights and recommendations:
- The state and city of New York stand to lose a combined $37 billion in tax revenue, setting the stage for potential tax increases and cuts in government services.
- Only 40% of Manhattan office workers are likely to return to work by year’s end.
- Hotels should be converted into affordable housing for the poor and supportive housing for the homeless.
- The affordable housing system will see a shortage of units rise from 650,000 to 760,000.
- As many as 520,000 jobs have vanished from the small-business sector.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
More from blog
Your email address will not be published.