There’s an old saying that the best way to predict the future is to build it. It is my fervent hope that by the time this column is in your hands, New Jersey will have already begun building a better future by phasing in a COVID-19 economic recovery plan that allows for the safe reopening of our businesses.
In addition to the terrible loss of life, the COVID-19 pandemic has devastated the national economy, which is expected to contract 37% in the second quarter of 2020. In New Jersey, 1.2 million people – 26% of our workforce – have filed for unemployment. Thousands of businesses were forced to close when the pandemic hit, and billions of dollars in state tax revenues have been lost since March.
At press time, the New Jersey Business Coalition, which includes NJBIA and 80 business and nonprofit groups, had already given the governor and leaders of the Legislature detailed recommendations for gradually reopening New Jersey businesses. It is our hope that state leaders incorporate this framework into a responsible roadmap forward that is driven by health data and remains focused on business recovery.
The coalition has proposed a four-prong approach between the business community and state, county and local governments that focuses on vertical industry sectors and geographic regions. We recognize that a one-size-fits-all approach may not be appropriate given the potential for regional coronavirus hotspots and uneven healthcare capacity.
Industries and regions that can quickly stimulate the economy and put more people back to work safely should be prioritized during the reopening process. There also must be recognition that regions such as the Jersey Shore, which drives $5 billion in state and local tax revenue annually and provides nearly 10% of all jobs in the state, deserve special consideration.
Businesses that have been shuttered for weeks will incur new operational expenses before there are revenues to support them. Most will have new costs, such as personal protective equipment for workers and the expense of retrofitting workplaces to accommodate social distancing guidelines. Businesses will need access to “restart funds” for their reopening phase.
Federal CARES Act appropriations to New Jersey can be used by the state for necessary expenditures related to the COVID-19 response. Therefore, a portion should be directed to the Economic Development Authority to provide direct relief to small businesses to help them recover from the shutdown and reopen operations in a safe and responsible manner.
It goes without saying that flattening the curve of new COVID-19 cases is essential so that businesses, their employees, and their customers, vendors and suppliers feel confident about returning to work. Some areas of the state are already seeing a decline in new cases as I write this, and so I am hopeful that by the time you read this New Jersey businesses will at least be on the path to a partial reopening.
Clearly, most businesses are ready. NJBIA recently asked its members how a soft reopening might affect their business models and over 70% told us they could operate safely under the social distancing guidelines established by the Centers for Disease Control and Prevention to stop the spread of COVID-19 illnesses. However, 65% said they would need to have at least half their workforce on site in order to operate.
As companies implement new business models in response to COVID-19, New Jersey must be focused on their successful economic recovery. That will make the difference between seeing our businesses reopen and seeing our businesses survive.
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