Even if you’re someone who can work remotely, owns your own home and has plenty of money socked away in a savings account, you’re likely discovering that the coronavirus still found a way to make your life difficult. The indirect impacts of the virus are proving to be profound.
So what other falling dominoes can be attributed to COVID-19? Here’s a look at some of the many ways that coronavirus is impacting the economy — here and abroad — that you might not have realized.
<div class="gallery-item"> <h2>1. Utility Shutoffs</h2>Many Americans might not have recognized the amount they saved on utilities when they were out of the house and in the workplace — and how much higher the bills would be while doing their jobs from home or while stuck in the house because of the coronavirus. For millions of Americans, the higher utility bills could be coming at a time when they have less disposable income than they did at this time last year, making it tough to find the money to pay what they owe. And if that weren’t bad enough, record high temperatures in many places this summer left people dependent on their energy-consuming air conditioners to survive the stifling heat. </div> <div class="gallery-item"> <h2>What's Happening</h2>About 1 in 3 American households reported struggling to pay utility bills in 2015, long before things were made worse by the COVID-19 crisis, and NPR reports that a national survey conducted this May found that nearly 1 in 4 people had to reduce spending on other basic needs to afford their power bill. With unpaid bills piling up — and the moratoriums on power shutoffs beginning to expire — millions of Americans could be in danger of losing electricity on top of everything else in the coming months. </div> <div class="gallery-item"> <h2>2. Office Space</h2>It’s possible that, in the near future, colleagues chatting at the water cooler will become a thing of the past. That’s because office space — long a cornerstone of American business — is suddenly having a day of reckoning. All estimates of how quickly companies eventually would transition toward remote work were smashed by the coronavirus. Now, companies that only had started to think about allowing employees to work from home — before the virus forced them to — are seeing how having staff based remotely translates into a drastically lower overhead. </div> <div class="gallery-item"> <h2>What's Happening</h2>Pinterest recently opted to make a permanent shift to remote work, and by doing so, it paid a nearly $90 million penalty to get out of its lease for 490,000 square feet of space in a swanky San Francisco office building. And it’s been joined by other major corporate players such as JPMorgan Chase, Ford, Twitter and, perhaps fittingly, outdoors recreation company REI. With a sharp drop in demand, plenty of people who own expensive downtown real estate likely are worrying about whether tenants will renew their leases — and if there are companies willing to replace them if they don’t.
Damage Report: Coronavirus’ Effect on Employment in Every State
<div class="gallery-item"> <h2>3. Business Districts</h2>Of course, it’s not just the office space itself that’s impacted by employees no longer going in to work. There’s an entire economy that supports — and is supported by — office centers. The owners of hordes of fast-casual restaurants and coffee shops that chose locations based on proximity to offices and their workers have seen their customer base dwindle. Instead, those employees stay home, brew their own morning coffee and make a sandwich for lunch. </div> <div class="gallery-item"> <h2>What's Happening</h2>Starbucks already announced that a $2 billion drop in profits year over year as of July largely could be attributed to urban office space no longer being filled with workers. Xerox, likewise, saw revenue plunge by more than one-third as businesses scrambled to pause or cancel equipment purchases for now-vacant offices, though even that seems rosy compared to what happened to catering company Aramark. Revenues at Aramark, which provides food at offices, schools and stadiums, plunged 45%, the company said in its last quarterly report. </div> <div class="gallery-item"> <h2>4. City Budgets</h2>In one more instance where a lack of commuters is hitting the economy, city budgets have taken a sharp hit. The rise of the American suburb over the past several decades left cities in a tough spot as they lost tax revenues when highly paid workers moved out of the cities. Now, even the sales taxes those suburbanites paid when they grabbed a coffee, shopped on their lunch hour or bought gas on their way home has dried up as office towers remain largely unoccupied month after month. And of course, this is coming at a time when the demand for city services is at an all-time high, as the neediest residents have been thrown into severe turmoil by the economic effects of the coronavirus. </div> <div class="gallery-item"> <h2>What's Happening</h2>A report from the National League of Cities revealed that some 90% of 485 American communities polled are anticipating next year’s financial situation will look even worse as their traditional sources of revenue continue to plunge. They also reported an expected drop in general fund revenues of an average of 13% in the 2021 fiscal year compared to 2020. That’s due to an average drop in sales tax earnings of 11% and a reduction of income taxes — hammered by unemployment — of 3.4%.