00:00: Panelist introductions & scope of responsibilities
7min: YOY parking demand data across the U.S.
9min: U.S. GDP before and after COVID-19, the cost of the shutdown
19min: The economic impact across various industries such as restaurant and hotel
36min: Given the profound impact, what does it take to restore the businesses, consumer demand, and the economy overall?
44min: The Workplace Recovery Alliance, what's in the bill and how to take action
Current state of the industry in the U.S. and the impact of COVID-19
Current state of parking
25% of commuter parking volume compared to this time last year
5-10% of volume compared to last year for visitor, off-street parking
Parking data can be used as a barometer of recovery by reflecting the demand at businesses and the return to the workplace
US GDP Pre-COVID: $22T
Private sector: 65%
Public sector: 35%
US GDP Post-COVID, 2nd Quarter, down 38%
Shut down cost $600B per month = $7T
40% of employees that make less than $40,000 a year lost their job in March
Brad Cameron: The majority of companies in this country are not doing well. Especially as we know restaurants and tourism. Hotels have lost 90-95% of revenues. And generally, as an industry, they tend to make money when occupancy is over 65%. If you're at 75%, you're doing really really well but by the same token, anything after 65% is a disaster.
There's a business in Texas called, Shady Grove, that during the shutdown, had to furlough 60 employees. Now that they're starting to re-open businesses, they called their employees and only 8 returned, because it doesn't make economic sense for them. There won't be enough demand to generate the tips that they rely on. As a result, after 50 years, they're shutting down. This is an example of the structural issues that we're taking into consideration with the Workplace Recovery Alliance.
William Clay: The impact I'm seeing aligns with what you covered Wen, parking demand is down. And in the parking business, it's not up to us when we can reopen, business is down across the board and parking is dependent on consumer demand. In March, in only a matter of days, all of our revenue generators disappeared: events, concerts, conferences, sporting, office buildings, everything disappeared. It went from 2020 being a growth year to being down 97% in a matter of days.
What will happen when the shutdown ends?
Tim Dunn: There are really 3 different estimates on what will happen. The first, is that some people think that when businesses re-open, that the economy will just bounce back. But at the other end of the spectrum, there would be a pretty aggressive effort to crowd out private sector with public, so the pie chart would flip to 65% public sector GDP and 35% private sector GDP because of the deficit spending. We're a third perspective, where we feel that the government focus should be on rebuilding the private sector, which would in turn, fix the public sector and would restore this pie chart.
Who's paying for the 1.2T shutdown cost?
Workers, pay with unemployment/reduced waged
Businesses, pay by shrinking, closing or borrowing
Debt markets, pay with credit losses or increased credit risk
Government pays with a shrunken tax base and deficit spending
If they pay with deficit spending that builds the public sector, it would go on indefinitely and we would continue to bear that burden. But if its' used to rebuild the private sector, that spending stops and restores the tax base and you get a return on investment.
Given the profound impact, what does it take to restore consumer demand and bring the economy back?
William Clay: To a large degree, I agree with what Tim mentioned about the self governance approach, and making our decisions on when it's right to re-open with the consideration of protecting the at-risk community. Businesses need capital to re-open, period.
Brad Cameron: The cost of the shutdown have already has already incurred, the question now is how we're going to pay it. That's why we have the initiative, Workplace Recovery Alliance, and what we need is for companies to get onboard to help pass this in Congress. We want to keep companies informed and give them a voice in the process. We need a comprehensive approach that touches all aspects of the supply chain that has been impacted. I'll let Tim detail the aspects of the bill we're proposing.
Right now, as William said, there are a lot of decisions that are being taken away from citizens. So the first thing that has to happen is that we regain the autonomy to choose for ourselves. The goal of the Workplace Recovery Act is to provide the cash and the confidence to re-open and re-hire in the private sector. If you bleed cash, you can't start back up.
This isn't a liquidity crisis, it's a demand crisis. The constitution requires just compensation for businesses, so what is just? What we think is just, is the following.
The Workplace Recovery Act
12 month coverage of cash operating losses, which covers shutdown and reopening of cash bleed
Allows workers to retain $600 of added unemployment benefit, and get their job back. This helps address the incentive issue of getting people back to work
Based on good faith representations and true up after the fact, like the IRS system
Includes succeeding month projections
Businesses can choose coverage period of any consecutive months, and can retain a positive cash flow. This incentives business to get off the program, and get back on your feet without government help
For more information, please visit: www.workplacerecoveryalliance.com